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Crude Oil Up 120% in 1 Year: What Happened to Those Lasting Pandemic Scars?

Last year, mainstream experts said falling oil prices were unavoidable. Here's why they soared instead

by Nico Isaac
Updated: October 13, 2021

As far as the 12 calendar months, October tops the list as the most superstitious for investors. Historically, it's been the month when "October Shocks" occur in the form of unforeseen stock market crashes felt around the world.

But this October, one of the biggest surprises thus far has come from the energy sector. It wasn't a crash... but rather, a positive uptrend in crude oil that has pushed prices 120% higher in one year to a 7-year high. And, according to an October 4 Forbes, crude's surge has derailed the environmental initiatives of the leader of the free world. From the Forbes article:

"Biden Caught Flat Footed by Sky-Rocketing Oil Prices

"The Biden administration has failed to square its long-term climate ambitions, which call for a 50 percent reduction in greenhouse gas emissions by 2030, with the short-term needs of the American economy.

"Oil demand will continue to grow through at least 2030, even if the world implements aggressive climate policies."

I can't imagine how many highly qualified people were hired under the Biden administration with the sole responsibility of predicting energy price trends. And still, the President was caught off guard by oil's comeback.

How could that happen?

Well, it has to do with the fact that mainstream energy analysts were unanimously bearish about crude oil's prospects last October and November. This was smack dab in the middle of the global pandemic, as OPEC+ went all Freddy Kreuger slashing production, and demand for crude plunged to record lows.

Here, these news headlines from that time set the bearish black gold scene:

  • "Oil market outlook: Lasting scars from the pandemic (WorldBank.org)
  • "Oil Prices Likely to Continue to Struggle in Q4 as Demand Lags" (Oct. 2 CNBC)
  • "Oil Prices Are Only Going in One Direction" (November 9 Washington Post)

That one direction, by the way, was down. Said the Washington Post:

"Two things have conspired against the Organization of Petroleum Exporting Countries. The coronavirus outbreak is threatening to put an already stalling recovery in oil demand into reverse. At the same time, supply is rising from a variety of sources over which it has no control."

bloombergoildemand

Which leaves one glaring question mark: If it isn't POTUS, and it isn't OPEC +, then who is in control of oil's price trends?

We believe the answer is investor psychology, which unfolds as visible, trackable Elliott wave patterns on price charts. In fact, it was on November 11, 2020, our Energy Pro Service oil watchers of a long-term reversal in oil's trend; one that pointed prices in ONE DIRECTION, up.

There, Energy Pro Service analyst Steve Craig presented this labeled price chart of crude, along with this bullish expectation of how far and high the third wave rally would travel:

"...It's way too early to get a read on a potential shape for Supercycle wave (b), but it should last for years and potentially retrace as much as 90%-105% of the wave (a) decline."

11920EPScrudethirdwave

The 120% surge in oil prices since that low speaks for itself.

In the end, there is no form of market analysis that can claim accuracy 100% of the time. Elliott wave analysis is no exception.

The difference is, our analysis forecasts, even when it means taking the opposite side of where the crowd is looking. And we identify critical price levels that show when our forecasts are right -- AND, more importantly, when they are wrong to help minimize risk.

Be Ready for Trend Changes in the World's Top Energy Markets

The list of news events supposedly driving oil prices are endless: the pandemic, the US-China trade war, hurricanes, and on.

But oil and gas prices ignored all of these "bearish" factors!

The recent rallies are consistent with the still-unfolding Elliott wave pattern. See how far it should extend, plus get objectives insight into near-term ups and downs with our intraday, daily, and weekly Energy Pro Service updates.

See below for instant access.

4 ways EWI's Energy Pro Service lets you trade with more confidence

If it's a major energy market, we'll help you stay on top of it.

1. You Get Timely Intraday and Daily Forecasts

Your Energy Pro Service subscription puts a veteran energy market expert in your corner. His goal is to make sure that day-by-day, hour-by-hour, you see the very latest Elliott wave picture. You get intensive intraday coverage to help you catch near-term opportunities and daily forecasts that let you get in front of longer-term waves.

Markets covered: NYMEX: crude oil, natgas, unleaded, heating oil; ICE Brent; energy ETFs (XLE, etc.)

2. You’re Ready for All Probabilities with Video Overviews

Three times a week, editor Steve Craig records new videos to walk you through ALL Elliott wave counts for the Energy complex. You see his outlook in detail – plus, any strong alternatives that may enter the picture. Result: You’re prepared to act on all probabilities.

3. You Get Essential Weekly Perspective

Context is key. Your Energy Pro Service subscription gives you big-picture analysis to help you ride major trends – trends that can last years. This essential perspective puts the near-term moves into context. Together, you get a comprehensive Elliott wave picture for the energy markets at every degree of trend.

4. You Become Part of an Exclusive Community of Savvy Elliott Wave Traders

We're on your side and working for you. If you have a question about the Wave Principle or our analysis, just send us an email. We'll update the next post or video so you and your fellow subscribers get the clarity you need.

Or, if you're having a hard time grasping an Elliott wave concept, often we can suggest a resource for you to read or watch.

We know we're successful when you understand the Wave Principle and our analysis. We'll do what we can to make sure that happens.

Note that we do not provide individualized services, assistance or advice concerning investing or trading in any way.


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