Bulls Get Prizes As Crude Rises

Published on August 16, 2012 by in Energy

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It was a supply driven rally that moved crude over a dollar higher on Thursday. Part of this was follow through buying from the surprising DOE stats released Wednesday. But the situation in Syria and nearby Lebanon continues to underpin the oil. The recent concern in Lebanon stems from the kidnapping of Saudi, Kuwaiti, and UAE citizens. The overriding thought is that the situation in Syria will break down into sectarian violence. Crude bulls rationalize that this can spill over and infect the entire Mid-Eastern region.

We have been consistently saying that the target for our pattern was 95.80; we missed that target by 5 cents (our pencil will be sharpened next time).

On Thursday, the White House began floating a trial balloon by releasing SPR crude. This is not without precedent. Although we don’t have the exact date, we believe it was done around 2010 as well. This knocked the prices down, but the decrease did not last long. However, energies are higher on the hope of stimulus, and this has kept the funds pumping on the long side of the market.

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