The Energy Space

Energy Price Outlook

WTI finally broke out from its tired sideways direction yesterday and posted strong gains, although Brent still appears mired in its three-month consolidation. The higher trend in WTI could continue in the near-term, with support offered by improving economic data, bullish flows in the commitment of traders data, weakness in the dollar, accommodative Fed policy, and production declines in Saudi Arabia. Potential drags to the uptrend will come from questions regarding the possible forward pull of springtime economic activity into the warm winter, delayed effects of Hurricane Sandy, and the upcoming debates over the debt ceiling, sequestration, and continuing resolution. We still like WTI over Brent and favor holding the June WTI-Brent trade entered on Jan 4th at -$14.25 with a target at -$8.00 and a stop at -$14.00. We would also anticipate a shrinking of the WTI futures contango and a narrowing of Brent's backwardation....938 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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