WTI War Party

Saudi-led OPEC and its allies agreed to a larger-than-expected increase in oil production, potentially allowing Riyadh to pump more crude. Simultaneously, Saudi Arabia agreed to extend a two-month-old cease-fire in Yemen with Iran-backed Houthi fighters.

ノート

Aramco is the world's largest corporation, and they want lower crude prices.

ノート

Pro Tip: Central banks all over the world are aiming for inflation with unlimited ammunition under the guise of national security.

ノート

Crude demand is suffocated by higher interest rates.

ノート

Food for thought: The initial drop in oil prices from mid-2014 to early 2015 was primarily due to supply factors such as booming US oil production, fading geopolitical concerns, and shifting OPEC policies. However, deteriorating demand prospects also played a role, particularly between mid-2015 and early 2016. This helps to explain why the drop in oil prices did not result in an immediate boost to global activity.

ノート

For inventories to "finally normalize by late 2023," global oil prices would need to average $135 per barrel for a year beginning in July.
- the analysts

ノート

Something must happen to cause a 500,000 b/d drop in global crude demand to rebalance the market.

ノート

hourly evening star candlestick pattern on 6/14

ノート

weekly evening star candlestick pattern on 6/18

トレード稼働中

6/17 WTI entered into a downtrend on the daily supertrend indicator

ノート

According to CFTC data, retail traders are now the most net-long since December 22, when WTI was trading near $73 per barrel. We usually take a contrarian approach to crowd sentiment, and the fact that traders are net-long suggests that WTI prices will continue to fall.

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hourly evening star candlestick pattern on 6/29

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Crossing the monthly belkhayte timing zero line into negative territory.
HYG correlation with crude is as negative as in 2019-2020.

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Higher prices will always encourage additional production. In a contracting market, this will drive down prices, and any deliberate attempts to cut production in order to raise prices will simply backfire.

ノート

Iran is lowering its crude prices in order to gain market share.

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long positions are increasing

トレード稼働中

U.S. commercial crude-oil inventories surprisingly increased last week, while gasoline stockpiles also rose.

ノート

"If you have a milkshake and I have a milkshake and my straw reaches across the room, I'll end up drinking your milkshake."
-Senator Albert Fall

トレード稼働中

Any cut to crude output will prolong depression. Cutting production cuts growth. Checkmate for the Autocrats.

ノート

Saudi's need money.