What are the drivers of oil price?

Quote from trade4succes:

While I am waiting for the book on fundamentals to arrive, anyone has an idea why in the last 24 hours the price rose by $5, technical, fundamental? Bernanke? or some other data on oil storage etc?
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I'm a purely technical trader and from the technical view on the daily chart, price slightly overshot an upper channel on 7/19 then pulled back to the 20-day moving average, which is where a swing trader would look to get long. Then on 7/30 the 20-day MA broke down with some conviction, shaking out the bulls and attracting bears who were eying a pullback to at least 100.00 (previous resistance becomes support) and possibly even further to the lower trend line around 97.00.

However, yesterday's action, which I'm assuming was based on fundamentals (the EIA report), was very bullish and there's likely a lot of shorts getting squeezed, maybe even squished :eek:
 
Quote from NoDoji:

I believe there are so many speculators involved (big ones, like hedge funds, JPM, Goldman, etc) that a lot of what happens is more technical than fundamental. News events trigger overshoots of price because the algos of the big players force momentum and actual supply/demand seems to mean little from the "why oil prices did that" after-the-fact analyses.

I strictly trade it intraday using price action and totally ignoring any news.

If I was looking to swing trade it, I'd likely buy following a dip to a very major trend line or previous support level, or sell following a distant channel overshoot (on a daily or even weekly chart). Everything in between seems really sloppy, IMHO.
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Agreed. By the time we find out about it, the relevant news has already been priced into the market. Besides, prices usually set themselves up in a way indicating where a market is likely to go ahead of a fundamental report.
 
I use economic events and breaking news events (primary) that have caused changes in the supply/demand and then use technical analysis (secondary) to time my entry into Oil futures...works well for me for many years.
 
Over a long period of time, demand. That's why oil prices downright collapsed after breaking $150/barrel.

Over the short term, your guess is as good as mine, although the weekly reports on oil consumption/stockpiles is definitely a factor.
 
By the way, did you know that the price of gasoline at the pump is 151 times more expensive in Norway than in Venezuela?
 
Quote from xelite777:

By the way, did you know that the price of gasoline at the pump is 151 times more expensive in Norway than in Venezuela?
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did you know that An olive tree can live to 1500 years old. how about that one..
 
Quote from xelite777:

By the way, did you know that the price of gasoline at the pump is 151 times more expensive in Norway than in Venezuela?
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Yes, gasoline per gallon is more expensive abroad, such as Europe, but that fact alone is misleading.

This is because consumption is also significantly lower than in the United States, due to smaller roads and smaller and more fuel efficient cars, and shorter distances of travel. Visit London and Paris and you'll see what I mean. Owning a car in metropolitan European cities isn't as common as in a city like Los Angeles because these cities are much more compact and denser vs. L.A. County which is wide and spread out, also because of more accessible public transportation.

If you break down fuel costs abroad as a percentage of one's total budget, fuel probably accounts for less than what we are paying here. My guess is that in eastern European countries, home heating costs is the equivalent to them of what gasoline is to us.
 
WTI is primarily driven by fear of global or domestic supply disruption (Iran/Hormuz), supply bottlenecks in the system creating "stranded barrels", the availability (or lack thereof) of comparable light-sweet grades (LLS, Ekofisk, Es Sider), and refinery margins in the US system, primarily LA, NY, US Gulf Coast, and Group 3/Chicago are also hugely important drivers of WTI.

When the crude export ban finally gets lifted, Asian (Singapore/Tokyo) and European (Rotterdam/Med) refinery margins will also need to be considered when forming an opinion of WTI. At present, I believe the US can only export 50,000 bbl/day of raw crude, however there is no limit to the refined product exports. For the last 6-8 weeks there has been a glut of crude supply in the US which has caused WTS (West Texas Sour) to trade down relative to WTI; and LLS has been trending lower since April 2013, due to increasing supply. This has weighed on WTI.

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LLS = gray (left axis); WTS = white (right axis)
 
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