Sunday, January 19, 2014

Gas prices fall: how low can they go?

(19 January 2014)  Gasoline prices are continuing to fall in most places as the market adjusts to a glut of oil on the market.   Although crude oil bounced a little higher last week closing at $94 for West Texas Intermediate, the price trend has been mostly down ever since the Syrian Crisis met with a negotiated conclusion in the fall.  This is one critical factor in the reduction of the usual Middle East geopolitical price premium.  Actually, there is a world surplus of oil now as the US has continuously increased its domestic production through the introduction of shale oil.  More recently, the emerging prospect of a nuclear treaty with Iran means that the US will likely lift the embargo on Iranian oil thus increasing the world's supply by up to five million barrels a day with the stroke of a pen.

Some analysts suggest that the price of crude could continue to fall to $80 or below in the near term as long as there are no sudden changes in the supply-demand balance.  But just how realistic is this forecast of $80 crude oil?  Based on my reading of the Crude Oil Futures horoscope, I would say that $80 is very possible over the next 1-2 months.  While it is often difficult to translate planetary positions into specific percentages of price movement, there does seem to be some significant planetary affliction in this chart which indicates lower prices ahead. 

As we can see in the chart, the main culprit here is Saturn. Transiting Saturn sits at 27 degrees of sidereal Libra deep in the 6th house of this chart.  This is usually a placement that is accompanied by difficulty, obstacles and setbacks.  In the world of financial markets, Saturn is the planet most associated with price declines.  The 6th house is a dussthana house, and is considered somewhat negative in its effects.  As Saturn moves closer to the equal cusp of the 6th house at 29 degrees of Libra, the burden of Saturn may even increase.  This is one reason why further declines are probably more likely than a sudden rally, for example. 

The other problem in the current transit picture is that transiting Rahu (North Lunar Node) at 9 Libra is exactly conjunct the Moon-Saturn conjunction in the natal chart.  Rahu is a natural malefic but it doesn't always produce negative outcomes.  In this case, however, it is somewhat more likely to coincide with difficult situations since it is conjoining another natural malefic planet -- Saturn.  Rahu usually coincides with unstable situations marked by confusion and distortion.  In this case, the Rahu influence also looks negative. 

Jupiter is one possible source of rising prices but it is not forming a close transit aspect to any planet at the moment.  It could give a partial lift to prices through minor square aspects to Mercury or the Sun.  But this would seem to be no match for the direct hits from both Saturn and Rahu on this chart.  

While the Rahu transit moves off Moon-Saturn quite soon, the Saturn transit will last all the way until early March.  Saturn will turn retrograde on March 2nd on the exact degree of the 6th house cusp.  This will likely be a burden on oil market sentiment and could depress prices until that time.   In addition, Mars will station on March 1st close to Rahu and both will be quite close to the natal Pluto in the Futures chart.  They will also form a close opposition to natal Mars.  This is probably another negative influence in the chart that will manifest in late February and early March.

As I said, it is difficult to correlate planetary motion with actual real world prices.  And yet given the strength of these two negative influences, it seems possible, at least, that crude oil could drop from its current $94 down to $80.  Therefore. it does look like gas prices at the pumps will continue to fall for a while yet.

In other financial markets, stocks were mixed again last week as positive earnings reports offset fears of a possible slowdown in the US economy. The Dow inched higher to 16,459.  In Mumbai, stocks climbed on data that showed slowing inflation and the possibility of an interest rate cut from the RBI.   The BSE Sensex once again finished above 21,000.  I had been fairly equivocal about markets last week given the mixture of astrological influences in play.  The midweek Mars-Venus aspect did not really translate into any clear pullback.  Meanwhile, the Mercury influence early in the week seemed to broadly coincide with gains across the board. 

This week sees Venus move a little closer to its opposition with Jupiter and conjunction with Pluto.  It is hard to see stocks reacting very negatively to this configuration.  Mostly, this is a positive alignment that should correspond with optimism, buying and higher prices.  Some tension may arise later in the week perhaps on the Mercury-Mars aspect and the Moon-Rahu conjunction.  As a result, we could see some modest declines later.  Whether or not they will be enough to offset the favorable effects of Venus and Jupiter remains to be seen.