Not much has changed since last week's update. The market is still technically oversold, as indicated by the extreme MACD and RSI readings. All the SMAs are still moving lower, and the shorter SMAs are still below the longer SMAs. Prices are caught up with the 10 week SMA. In addition, we can also see the triangle consolidation pattern forming.
The main point with the daily chart is the triangle consolidation pattern and the tight price/SMA picture that is forming. This indicates traders aren't convinced of a move in either direction right now. My guess is we've seen the lowest oil prices we're going to see on this chart, especially considering the underlying supply situation:
3 comments:
I think it's remarkable that BP, in a presentation several years ago, projected the long-term (through 2010) price of crude was going to settle around $40. Turns out that they were right.
When I pointed this out to colleagues during the $120 oil period as evidence of speculative investing, they refused to believe me. They maintained that the long-term oil price just had to be in the $200 range.
COIL0309 44.59
WTI0309 34.38
The divergence is huge. Reading is correct, because Bloombers show almost the same:
Nymex Crude Future 34.98
Dated Brent Spot 44.68
WTI Cushing Spot 34.78
anyone know what the reason may be? also what we should do ? Short brent, long WTI ?
NMMM.NU:
Look at the deferred months -- the May09 contracts are only trading with a $1.60 spread.
My speculation is that for deferred months, there is still time to arb crude varieties (e.g. ship WTI to europe if brent is trading at a premium), but once a contract's delivery date approaches, there is not enough time for physical arb, so the price differences can get large.
At that point, the spread is likely to move to greater extremes, not to mean-revert.
Blank Reg
(Nick)
Post a Comment