According to a global energy industry forecast, oil growth will continue to soar until the 2030’s and climate-damaging emissions will keep climbing until at least 2040. The World Energy Outlook is not only closely watched by the oil industry but also the governments due to its relevance to climate policy. The International Energy Agency said that almost 20% of the growth in last year’s global energy use was “due to hotter summers pushing up demand for cooling and cold snaps leading to higher heating needs.” The Internation Energy Agency (IEA) forecast global oil demand to be 106.4 million barrels per day by 2040 (up from 96.9 million last year).
Big Corn and Big Oil have been dueling over the future of the Renewable Fuels Standard, which requires oil refiners to mix biofuels like corn-heavy ethanol into their fuel. The Renewable Fuel Standard requires refineries to blend increasing volumes of biofuels into their fuel each year. The proposed plan would include an increase to biofuels requirements for 2020 of 1 billion gallons (3.8 billion liters) and the agricultural industry wants the administration to force larger refineries to make up for the exempted gallons through reallocation. The proposed plan, discusses 500 million gallons for conventional biofuels and 500 million gallons for advanced biofuels (like biodiesel).
As we trudge through the era of micro-blogging and social networking intertwined with current global market volatility, we must rely on technical analysis now more than ever. Below is a sneak peek into a 1 year continuation chart of WTI crude oil with support and resistance levels that are at the fore in regard to potential near term price direction.
President Trump recently threatened to tax, nearly $300 billion dollars of Chinese products, by 10%. The already volatile oil market, seems to have room for some extra volatility. The volatility would largely cycle around China’s response to the U.S. tariffs. If China responds by purchasing oil from Iran, analysts speculate crude could rapidly approach $30 per barrel. Trump could impose the sanctions on the Chinese imports as soon as September 1st. Trump also threatened that he could raise the tariff, if no progress has been made towards a trade deal.