West Texas Intermediate Crude WTIC is challenging its 200 week Moving Average. The widely watched 200 weekly MA is $58.27. As noted above the price is just under that at $57.80.

Crude prices got a boost Friday morning after the Organization of the Petroleum Exporting Countries and other big producers including Russia agreed Thursday to keep limiting their output through the end of 2018, writes The Wall Street Journal’s David Hodari.

Brent crude oil, the global benchmark, was up 1.07 percent at $63.30 a barrel in mid-morning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.7 percent at $57.80 a barrel.

WSJ Energy Report December 1, 2017

West Texas Intermediate Crude WTIC is challenging its 200 week Moving Average. The widely watched 200 weekly MA is $58.27. As noted above the price is just under that at $57.80.

So, now what? In 2015 crude rallied from $45 to just over $60 as it is doing now. Indicators suggest this will be an important challenge of those highs. But just looking, the market is flashing signals it is at least trying to break out of its three year sideways move. That has seen the February 2016 low of $25 and now the recent break above $55.

Heating oil has rallied right into the start of the winter months and now is pulling back a bit. Gasoline prices are falling, no lack of supply there. Gasoline rallied from $1.55 to $1.83. At $1.73 it should be finding some support.

Our bell weather for mid-sized producers is Apache APA. It jumped a whopping $1.53 today trading at $43.36. It really needs a weekly close over $47 to break out of its pattern going back to August. Anadarko APC is also up eighty cents today.

The real bell weather for the Permian Basin is the Energy Service sector represented by the XES ETF. It jumped 1.64 percent today. That is very encouraging. WE look for a weekly close over $17 to break this stock out of its range.

Another encouraging sector is the Master Limited Partnerships representing liquid pipelines. The ETF for this group is Alerian MLP symbol AMLP. This issue topped around $12.40 last February. It bottomed this week at $9.80.But it too is up 3.25 percent just today Weekly indicators have not turned up. Daily measures just hit new lows and are turning up at least.

Natural gas is still struggling. But the growing LNG market should eventually take raise the prices.

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Our bottom line for now is that the energy and other commodity sectors are gearing up for a larger bull market in 2018.

Follow Dennis Elam at http://www.themarketperspective.com