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OPEC Band Breaks

  • November 15, 2001
  • Marc Dupee

The $22 to $28 “band” between which the
Organization of Petroleum Exporting Countries has managed to hold the price
of oil for most of the past two years is collapsing. Slackening world demand and the refusal by Russia, the
biggest non-OPEC producer, to cut production has resulted in the
acknowledgement by OPEC leaders that they have lost control of oil
prices. 

OPEC Secretary-General Ali Rodriguez said the cartel
no longer had a “floor” for prices, and this set up the
possibility of a price war with producer nations undercutting each other in
price to obtain or maintain market share in a deteriorating global economic
environment. 

From
Thursday’s Futures Setups, energies are imploding. December crude oil
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has sunk as much as 10%. Even though crude, heating oil
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and

unleaded gasoline
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straight day,
Off The Blocks
 are working out in these markets. 

T-bonds
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pressured below the 109 20/32 trigger suggested in Wednesday’s
Report. Bonds are testing their opening low print today at 107 20/32, an
area of support that is holding so far. 

Despite having come a long way, 50% off the November
low, December Nasdaq 100 futures’
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Volatility  reading is showing they could make a larger-than-normal
move. This contract has been on the Momentum-5
List all month, so here you have an indication of direction as well the
likelihood for an outsized move. New 10-Day Highs
in S&P
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suggests equities index futures, as a group, will continue higher. 

As mentioned in
Wednesday’s Setups, December

copper
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back and held at the low of today’s session, at 66.50. 

March cotton
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momentum market, is opening down and beginning its 90-minute session in
support. For the Dec. contract
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