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Crude Oil

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crude oil strange movements last days symbolize something in the doorway

crude oil showing suspicious signs

oil behaving strangely this week – we see strange behavior – every time crude oil show strong move down it came back to higher number – in the begging  of this week crude oil opened lower gap almost 2 $ from last week close price at 74.30 to 72.50 and then recover again, yesterday we saw the crude made the same move – reached over 75 $ to 75.26 – from this area went down sharply  to 72.70 and recover again higher numbers

The last post was whether the price of oil has gone up or is it just a temporary halt before resuming a rally?

These movements symbolize something in the doorway! 

crude oil  prices technical analysis
crude oil analysis

according to EIA: " Oil markets are still adapting to the changes set in motion by the extended period of high prices that fostered the emergence of tight oil in the United States. How oil demand evolves from here, and the prospects of a peak in demand, will be determined by a variety of factors including oil prices, the economic transition underway in major demand centres (most notably China), the pace of fossil-fuel subsidy reform, the speed at which disruptive technology and business models emerge in the transport sector and prospects for the two most stubborn sources of oil demand growth: petrochemicals and road freight."

Last February I wrote on Rig Counts and crude oil behavior :
Baker Hughes Rig Counts are published by major newspapers and trade publications, are referred to frequently by journalists, economists, security analysts and government officials, and are included in many industry statistical reports. Because they have been compiled consistently for 70 years, Baker Hughes Rig Counts also are useful in the historical analysis of the industry.
Hughes initiated the monthly international rig count in 1975. The North American rig count is released weekly at noon central time on the last day of the work week. The international rig count is released on the fifth working day of each month.

i  checked and compare oil prices to their details  see below

crude oil Rig Counts
crude oil Rig Counts 

Based on the data presented, we can see interesting things:
The number of new wells and drillings added according to the price of oil
In the good years of oil in terms of the price of course mainly in 2014 before the big drop in oil prices, you can see that there were an average of 3578 wells
In 2015 the number of wells dropped to 2337 wells when at the peak of the slump in oil prices the quantity stood at 1969 wells when in 2016 the average quantity stood at 1593 wells and the price of oil played between $ 40-50
When the price returned to be firm and relatively stable over $ 50 then the quantity began to rise again gradually
The evidence shows that in 2017 there were 2089 wells
And already in 2018, the quantity continues to rise, suggesting that there is still time for a boom in the sum of well, and inflation in the sum of wells versus oil prices
Let's say that an average area of 2500 wells is an equilibrium point to address it against oil prices and check where the price is relative to the number of wells

Update on this information :

one last thing  is COT position :
pay attention to swap dealer side - when the spread will increase we will probably see strong move because as you can see short position higher side above 30 % - look on similar cases in the past to get some idea ......

crude oil  position
crude oil  position 
conclusion : swap dealer side - when the spread will increase above 30 %  +  crude oil prices settled below 69-70$ (with high vol)  = can lead to change direction in crude oil prices 

This review does not including any document and / or file attached to it as an advice or recommendation to buy / sell securities and / or other advice

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