- America Is On Sale
- Warren Buffett and the Crisis: 'Brilliant Moves Interspersed with Some Surprising Errors'
- Schork Oil Outlook: More Strength in Crude
- Chrysler Makes Smart Call Staying Unplugged—For Now
- Your Next Move: Thriving and Managing in Limbo
- Yankees Team Signed Ball Selling For $3,500
- Pociask: In The Electronics War Does The Consumer Really Win?
- Why are Options Bullish on This Smartphone Maker?
- Is 10% Unemployment Good for Stocks?
- Jobless Rate to Hit 10.5%, Keeping Fed in Box: Poll
- New Lows for Stocks Next Year: Equities Bear
- AIG Moving Toward Repaying Bailout: Moody's
- Peak Oil Closer Than IEA Forecasts Show: Report
- JPMorgan Is Latest Firm to Reinstate 401k Matches
- Buffett and the Crisis: 'Brilliant Moves...Surprising Errors'
- Stocks Keep on Ticking as Dollar Takes a Licking
- News Corp. May Pull Content From Google Searches
- Your Next Move: Thriving and Managing in Limbo
MOST SHARED
- Pociask: In The Electronics War Does The Consumer Really Win?
- Israel: Leader of Business Innovation
- Mad Mail: Buy the Berkshire Hathaway Split?
- AIG Moving Toward Repaying Bailout: Moody's
- Justices Poke Fun at Patents for the Abstract
- Can Apple Top Microsoft as Most Valuable Tech Firm?
- Obama Sees Strains Unless US, China Balance Growth
- Jobless Rate to Hit 10.5%, Keeping Fed in Box: Poll
Text Size 
 |
Gas station in San Francisco. |
Just when the market might have thought everything, including the kitchen sink, was priced into this market, the front page of the Wall Street Journal blares the following headline: Energy Watchdog Warns of Oil Production Crunch.
In an ill-timed interview, the head of the IEA foreshadowed the likely of outcome of a new study underway of the future of oil supplies, and the results do not look good.
IEA head, Fatih Birol, states that “the oil investments required may be much, much higher than what people assume." The study is at its mid-point, and will not be released until November. Mr. Birol's comments have served to embolden the bullish sentiment, with crude oil topping $135 per barrel last evening, on the initial release of the story.
Heating oil has also topped $4.00 per gallon in early trading. The protagonist in yesterday's rally was the weekly inventory report: a sharp decline in U.S. oil imports ran headlong into a sharp uptick in refinery utilization rates causing an unexpected drop in supplies of 5 million barrels.
Implied gasoline demand showed a slight uptick, despite the daily records being set at the retail pump. This data is neither consistent with our research nor the relatively new analysis being circulated by MasterCard, which is showing retail demand down nearly 6%.
Despite all the factors that lie before us, in terms of supply issues, the China diesel demand spike, and the dollar's renewed decline, we are sticking with our $138 price target as a near-term top.
Yesterday, crude oil's prices action went parabolic. The bar on the bar-chart looks like the long robot arm on the space shuttle. In reviewing the daily bars on the chart going back to 2001, we could not find a similar instance of such an exaggerated move at a new price record.
These factors indicate the possibility of a "blow-off" top being put in place. In addition, prices are clearly at a level that represents a full blown energy crisis, and the stock market sell-off, yesterday, evidenced the sentiment that the economic outlook and energy demand are likely to deteriorate at a rapid pace.
Questions? Comments? energysource@cnbc.com
- From politicians to CEOs to companies, here's your chance to vote for the winners and losers of 2009.
- With prices well below peak, gems could add some sparkle to your investments.
- On the anniversary of the fall of the Berlin Wall, many in the former Eastern Bloc recall communism fondly.
- Do free market libertarians really believe what they say about ethics and shareholder value? The Big Money takes a look.
- Cramer did the research and found eight stocks that lead the pack. Read on to get his top picks.
- The health care reform bill that passed the House on Saturday will have a much harder time in the Senate.
Data is a real-time snapshot *Data is delayed at least 15 minutes