With apologies to Sargent Joe Friday from the old Dragnet television series, this week I want to talk about the facts and only the facts, and one big rumor.
This past week can best be described using a quote by former United States Secretary of Defense Donald Rumsfeld, “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.”
We know that March Crude Oil futures are set to finish the week lower after posting several volatile sessions this week on the daily chart. If the high and low hold then it will also post the dreaded “inside move” which is typically a sign of investor indecision, but also an indicator of impending volatility. As a trader, you shouldn’t fear volatility, you should embrace. If you feel it is too much to handle then cut down your trading size.
We know that at the week-ended January 29, the U.S. was sitting on a huge stockpile of crude oil, a very strong indication that the global supply glut is getting worse. According to the latest data from the U.S. Energy Information Administration, another 7.8 million barrels of crude oil moved into storage. This was more than two times the estimate, putting current inventory at about 503 million barrels.
Some databases tell us that this is the biggest weekly total since recordkeeping…