This is the second forecast so far. the previous forecast is still profitable. I have to remember that the forecasts are at most for two months in the future. Even so, in two months, a lot of things can change.

Forecast Factors

1. Oil industry news
   • Political Plays?
     • Iranian Sanctions are in full effect now. ^
       • Putting sanctions on Iran means the US gets to export/sell more of their oil at higher prices to more countries: Countries who comply with the sanctions have to buy their oil from somewhere else. And that that somewhere else could just so happen to be the US.
     • Saudi Arabia cut their production in July apparently because they could not find buyers. This could signal that there is a potential oversupply issue with all the major producers stopping their production cuts. At the same time, the fact that they cut their production to match the demand shows that countries will act in the way that best serves themselves. Their act of cutting production for now at least pushes the prices slightly higher. In the future, if demand is not as robust, they will possibly cut production again. ^
     • Venezuela is imploding on its own. ^
     • US-China trade war still going on.
   • Level of uncertainty?
     • It would seem that the feel of the market is still pretty uncertain. With news pushing the price up one day, then down the next. ^v
   • Upcoming events/meetings?
     • Nothing in particular, though there is an OPEC meeting on 3 Dec 2018.
   • Oil discoveries or disruptions?
     • There was word of a new field in Pakistan, it won’t matter much in the short term.
2. Check the status of economies
   • Oil demand
     • If Saudi Arabia cannot find buyers for oil in July, I would think that demand isn’t growing as much as people expect it to. Or at least, it’s not a big enough factor to push the prices up. ^
3. Check other charts for movement
   • USD
     • USD is flat-ish in the short term but still have a longer-term uptrend despite the trade wars and such. It would seem that trade wars which are bad in the long run have not been priced in by the market. v
   • Gold
     • Price of gold has been steadily dropping. v
       1. These other charts show that the oil price should be going down, but it isn’t. It might be that oil has other bull factors that are stronger so that it will go up for now. However, these bearish factors need to be kept in mind.
4. Technical analysis
   • TTM_LRC ranges
   • • Shows a long-term uptrend TTM_LRC. ^
     • Recent candlesticks are within the lower 1SD range. ^
   • Support/Resistance
     • There seems to be a support line for oil at around $84. ^
5. Check Chart discrepancies
   • Quarterly expiry of futures and next futures chart
     • There is about a dollar difference downward in the next futures chart. But this difference is small.
   • The gap between WTI and Brent
     • Gap still exists, but nothing noteworthy here.

Other Things of Note

My perspective on Trump is that he has business interests (not necessarily his own, but those of businesses in the US) in this political moves. The best example I have is the first day he was in office, Trump approved the Keystone XL pipeline. This pipeline was controversial, to say the least. After months of lobbying and campaigning, Obama finally decided to stop the project. Then trump gets elected and 4 days after his first day as president, he approves the building of the pipeline. Of all the things to approve immediately after becoming the president, he chooses this. I smell a rat somewhere. A lot of oil-related businesses would benefit from this, and I think, were pulling the strings to get this pipeline approved as soon as possible.

The Forecast

I still have a bullish view of the situation for now. Or at least an “oil isn’t going to go below $X for now” type of view.

• • I am 80% confident that the price of WTI oil will not be below $63.5 on the 18/09/2018.