Price Of Crude Oil Has Major Implications For The Stock Markets

By Nadeem Walayat of marketoracle.co.uk

My forecast conclusions are for the oil price bear market to have made its final bottom BY early February 2016 and embark on a bull market that will target a trend towards a late year high of $60…This oil price trend and the stock market’s oversold state are also converging towards a stock market bottom…for 2016 in a time window that probably runs for another 2-3 weeks. [Here are the specifics.]

My forecast conclusion is for the crude oil price to trade within three distinct trading ranges for 2016:

Furthermore the trend pattern imposed onto the trading ranges implies that:

The bottom line is that the current oil price collapse is a wake up call to all major oil producers that crude oil as an energy source is running out of time so, whilst there may be future oil price spikes, the long-term trend given the likes of climate change, is for the oil age to go the way of previous ages such as the Stone Age and Bronze age…[That’s why nations such as Saudi Arabia, regardless of price, understand they need to get as much of their oil out of the ground as possible and sold off before they run out of customers!

Crude Oil Implications for the Stock Market

…A falling oil price is definitely a net economic boom for most major western economies given the fact that their level of oil consumption tends to be far greater than production and thus a falling oil price acts to cut import bills and boost consumer spending… Against this we have the negative impact of oil sector companies in distress that ripples out to other sectors that act to destabilize the financial markets i.e. precisely what we have been witnessing so far this year.