November 5, 2024

Global energy shortage pushes oil above $80

(13 October 2021) Financial markets have turned cautious as an emerging global energy shortage has driven the price of oil and natural gas to their highest levels since 2014. The energy shortages in China, India and several other countries are the partial result of post-pandemic supply chain bottlenecks and have produced regional brown-outs and significant industrial restrictions in power use.  The shortages are one reason why inflation has been on the rise as US crude oil prices topped $80 a barrel this week, with Brent surging past $83.

The rising price of oil is putting pressure on the stock market.  Higher oil prices create more inflation, which then forces bond yields higher as bond owners demand a higher premium in compensation for their loss of buying power.  Higher bond yields increase the cost of borrowing and thereby limit credit expansion and economic growth as debt servicing costs for both consumers and corporations becomes more expensive.

How much longer will the current rise in oil prices last?  The horoscope for oil offers some clues to this question. While there are several possible horoscopes which can be used to track the price of oil, let’s use the horoscope for Brent Crude oil (September 5, 2001).

The chart is highly activated at the moment as both Jupiter and Saturn are making important conjunctions.  A key factor behind the recent rally is that bullish Jupiter (28 Capricorn) is exactly conjunct Uranus.  Jupiter is currently retrograde and will station direct on Monday, October 18.  The periods near Jupiter stations are quite positive if it forms a close aspect with a planet in the natal chart as is the case here.  In addition, we can see that Jupiter also forms very close alignments with both the MC (10th house cusp) and the Ascendant.  These alignments have likely intensified the positive effects of this Jupiter-Uranus transit.

At the same time, however, Saturn (12 Capricorn) is exactly conjunct Neptune and therefore also in alignment with natal Mercury.  This should be a more bearish influence which may offset some of the bullish influence of the Jupiter-Uranus conjunction.  Like Jupiter, Saturn is also near the time of its direct station as it returned to normal direct motion this past Sunday, October 10.

Clearly, there isn’t any evidence of this more negative Saturn influence as the oil price has been rising for the past 8 weeks.  One possible explanation for the overshadowing of Saturn by Jupiter is that the Saturn-Neptune conjunction is a less negative influence.  Neptune is not as important here as it moves very slowly — just 2 or 3 degrees per year — so its placement is less unique to the horoscope.   If Saturn had been conjunct the natal Sun or the Moon in the Brent chart, then it might have had a greater impact on price.

Looking ahead, we can see that Jupiter will separate from its conjunction starting early next week, just as Saturn has done this week.  This should begin to diminish the bullish influence of Jupiter on the price of crude oil.  Therefore, the odds of a pullback in oil are increasing and will increase further next week as Jupiter resumes forward motion away from its conjunction with Uranus.

Weekly Market Forecast

Stocks have generally moved sideways over the past week as inflation fears and the prospect of Fed tapering have been mitigated by the expectations of stronger growth in corporate earnings.  The choppy trading is a probable consequence of last week’s Sun-Mars-Mercury conjunction, although the downside was fairly muted.

The rest of this week features a range of both bullish and bearish short term influences.  The Sun-Jupiter aspect is often bullish but the Mars-Neptune and Mercury-Chiron alignments look more bearish.  Next Wednesday’s Full Moon has a bearish bias due to its alignment with Mars.  While the twin stations of Jupiter and Mercury early in the week could offer some new bullish energy into the mix, the Full Moon suggests some volatility is still likely along the way.

For more details, check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.


Get notified whenever we post something new!

Continue reading

Bond yields tumble on recession fears

(5 July 2022) It seems we've entered in a good news, bad news economic situation for the moment.  The good news is that bond yields have finally started to fall amid early signs that inflation may have peaked. ...

Trump ‘s actions under scrutiny in new Jan 6 committee testimony

(28 June 2022) It's been a tough week for former President Donald J. Trump.  Today's Congressional testimony in the January 6 committee highlighted Trump's angry and agitated behavior that day in which he tried to take the wheel...

Powell reaffirms Fed’s commitment to fight inflation

(22 June 2022)  Jerome Powell was in the hot seat today as the beleaguered Fed Chair tried to defend his record in an appearance at the Senate Banking committee.  While the Fed has come under a lot of criticism...

Enjoy exclusive access to all of our content

Get an online subscription and you can unlock any article you come across.