Oil: New investment product
The raw materials have become financial speculation which today represents nearly half of transactions. The meteoric rise of oil has been driven as a 'flight to quality' to guard the fall of the shares. This fall history hundred dollars could be explained by the collapse in demand for energy needs, resulting in abrupt economic slowdown and exacerbated by the massive positions of pension funds to cope with 'décollectes. Specifically, consumption of oil has dropped by only 5% since January.
OPEC cut off the taps to curb falling prices:
Volatility in oil will continue with a likely revival of geopolitical tension, the entry into winter, speculation and profit-hungry expectations of reduced production. Although the Algerian Minister OPEC president, Chakib Khelil, do not favor before the meeting on 17 December in his own country, the DFM index falls in Dubai and the DSM index of Qatar, currently worse Could influence it. Since Russia and Venezuela, they will be tempted to defend these revenues. Even if OPEC represents only 40% of world production, a further reduction in deliveries for its next meeting in Cairo next Saturday will have an impact on crude prices. That would be the third reduction since September to try to raise the price of crude.
Investment mast will drive a new round of increase:
The Light Crude Oil on the level now close to $ 48 could halt investment and to nurture a new term until the bubble solutions one after oil had emerged. Some deposits, including oil sands of Canada, require a barrel higher at $ 80 for a profitable operation. Investments in the immediate seem frozen and also reduces the pressure on other drilling projects. Europe should invest about one trillion euros the next twenty years to insure against the impairment of electrical installations and gas and thus guarantee the production capacity. After this period, demand would be about Protected content barrels per day against a production capée by experts at Protected content .
Oil: a fossil energy excellence
Access to fossil energy arises as an inevitable and growing problem.
The shock of demand inherent in anticipation of a strong recession should not overshadow the power of OPEC which has retained the mistakes of the past as the opening of floodgates in Protected content . Our scenario calls for a new access fever crude accompanying the economic recovery despite a favorable short-term supply with a production capacity in Protected content the increased demand of about 400K barrels day.
Cylindrical Analysis: rebound in the short and medium term:
The oil has increased the level of $ 148.35 in plenary on 11 July Protected content that of $ 48.25 last Friday November 24. The oil has reached our support prsque barrel on the level of $ 47.50, near the bottom of May Protected content . Trace technical Bulls would be located on levels of $ 73, $ 86 and $ 100.
The limits of our strategy:
Conversely, breaking the Fibonacci ratio on the level of 44.20 calculated on the historical pace since November Protected content scenario would rebound in danger, or even invalidate definitively by breaking the key support level on the $ 40.
Louis-Serge Real del Sarte
Europe Director at Global Equities
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