For the oil market and the Russian ruble in 2015 it was extremely difficult. For 12 months, Brent crude fell $ 33.03, or 18.6%, to $ 37.70. Eight months the market closes lower, four - growth. At the beginning of 2016 the price of oil has already reached the level of 2004, dropping to $ 32.14.
In January last year, the "bulls" have successfully fought off a high of $ 45.17. Buyers are able to stop the seven-month fall in prices of black gold and four months to bring them to the level of $ 60.16 (33%). And everything would be fine, but the "bulls" failed to rise to around $ 89. Why is this mark was so important - it will become clear later.
Slowing economic growth in China, the devaluation of the yuan, a steady increase in oil inventories and gasoline in storage, the failure of OPEC to reduce production quotas, triggered another collapse in oil prices. Since May, the oil market moved to "bearish" phase.
Additional pressure on prices exerted by the oil companies themselves hedging - in the market for futures and options they were trying to capture for itself the price of oil, which will be produced in the future. In this case, when prices are obtained difference. It is worth noting that not all oil companies to hedge their risks through the options, because when you buy a put option to pay the premium.
Options are used by large companies. For example, Mexico annually hedge price risks from a possible drop in oil prices. Insurance costs range from $ 750 million to $ 1.2 billion. In this case, the banks sold them the put option had to hedge their risks in the market through the sale of futures on oil, pushing prices even lower.
On the monthly chart rendered all the important events in 1991. If you'd known quotation for Brent in 1980, it was possible to recover all of the events and 80s. This is important, as it was in 1980. Brent oil became the basis for the pricing of Russian export brands (Urals, Siberian Light and REBCO).
Comment each event does not make sense. Obviously, the footnotes will be placed on clear what events had an impact on the oil market. This graph can then be used as a cheat sheet for oil in the last 24 years. And now for the analysis.
Footnotes with a white background are fundamental events, with a gray background - a graphical analysis. The latter have an additional numbering.
In 2008, the price rebounded from the low of $ 36.20 and without setbacks recovered by 50%, to $ 89.55. That is the origin of an important level of $ 89, which said at the beginning of the review. By March 2012, a barrel of Brent rose to $ 128.37 amid rising demand for oil in emerging economies. Then the market within one year formed triangle of which the price went down (2). From that moment began a new drop in oil prices.
Note the marked ellipse downward wave in 2008 and 2014 (1). Between these years, a lot of interesting things when the price moves. Firstly, the relationship between them is 61.8% (Fibonacci number). In 2008, the decline amounted to $ 110.49 (-75.32%), to $ 36.20, in 2014 - at $ 70.51 (-60.95%), to $ 45.17. Now we find the relation between the waves - 100 * 70.51 / 110.49 = 63.8 (a value close to 61.8% Fibonacci number). Second, the decline in prices began in July. Third, oil became cheaper end of the year, and in January the following year came the rebound.
Among these factors there were grounds for a rebound in the past year. In 2015 it was registered a false breakdown. After forming pinbara (3) of the expected growth of oil prices, as well as in 2008. Pinbar worked great. The price rebounded to $ 60.16, from which then returned back to the trend line (4).
First, the price broke the trend line (4) after a failed attempt by her to fight back, and to implement the model of "double bottom" (3). Then there was rewritten at least December of 2008 - $ 36.20 (7).
After falling below the August low of $ 42.20 last week, it was broken Fibonacci level - 200% (5) of the descending wave $ 128.37, up $ 88.47 from the starting point of $ 115.68, and the support zone formed by peaks in 2000 and 2003 (6). Fibonacci extension tool is used when checking the waves at the consummation of the proportional analysis (the ratio of the Elliott wave).
And now attention: in 2015 opened lower on oil, and growth resumed until 14 January. In 2009, growth began with the opening of the market. Note that when the price of $ 36.20 in 2008, all the media were full of predictions of oil at around $ 20-25 per barrel, as it is now. As for all market participants is evident that oil futures for only need to sell, the market turns against the crowd.
2016 also opened with a decline, and sellers Holidays updated minimum. Oil fell against the backdrop of the collapse of the Chinese stock market. Since the analysis is performed on a monthly timeframe, then the signal to the upward correction is necessary to wait for the formation of pinbara ("hammer"), or candlestick formation "bullish" on the closure of the absorption of the month is a minimum.
On the right side of the chart, above, shows the statistics from the 2000 year. Many wonder whether there is a seasonal component in December and January. So, in 16 years in December, oil became cheaper and eight times as much growth closed. In January, oil prices closed eight times the increase and decrease of - seven times. If these values are grouped and check their alternation, it turns out that no laws on the influence of December to January there. Oil in January can either rebound sharply up and down to escape.
It now remains to determine the important technical levels. One level is $ 24. From 1991 to 1999 he was a resistance, and from 1999 to 2001 - the support (8).
OPEC does not want to reduce oil production quotas. In the oil market is dominated by "bearish" sentiment. US Federal Reserve began to raise rates. Like, now there is no signal to increase. But what would happen if the Chinese stock market all of a sudden stop falling and begin to show positive statistics? While statistical agencies are involved in the currency wars and manipulate markets constantly adjusting the previous values, unconditionally believe the statistics are not worth it.
Now the country's OPEC are fighting for their share of the market and crowd out competitors. What if suddenly the cartel will reduce oil production quotas? Few people know what is really being negotiated in the cabinets and what scenarios will be played in 2016. But we know how the market works. 5-10% of the players take the money from the rest of 90-95%. To turn over the big players, they have to sell all the crowd. To do this, you need to create the media background information that 90% believe that oil prices will fall to $ 10.
And here we should follow the open positions of major players on the report COT (Commitments of Traders). It is published once a week, on Fridays, the commission CFTC (US. Commodity Futures Trading Commission).
To compare two reports taken by WTI, because him more volume, than Brent. Ground for June 24, 2014, when the market began to fall, and the last of January 5, 2016. Then open interest was 2,317,000 contracts, is now 2.335 million (+ 0.77%). This structure has changed positions. During the period from 24 June 2014 to January 5, 2016 in the large speculators long positions decreased from 548,476 to 479,540 (-12.5%), short positions increased from 68 737 to 261 293 (+ 280%). Increased by 8%, and Loki, ie opposite positions of one trader, are not included in the columns of the long and short.
Hedgers have observed an inverse action. They have for this period increased long positions and short positions were reduced. In 2008, the build-up of long positions began in October, and the growth began in January 2009.
For example, the cycles on the monthly period beginning correction is obtained on January 25-28. Seasonal cycle (365 days) indicate a reversal of the market from 12 January. There is one more factor that points to a short-term rise of oil prices - a positive correlation between the annual 2015 to 1993 (93%) and 2008 (78.9%).When they rose in price of oil. Given all the above factors, there are to be two scenarios: the first - to rebound after forming pinbara to close in January, the second - to fall to $ 24, and the restoration of the trend line to 1999 (4). Click on the image that its increase.