• 4 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 6 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 13 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 9 hours Wonders of Shale- Gas,bringing investments and jobs to the US
  • 12 mins Trump bogged down in Mideast quagmire. US spent $Trillions, lost Thousands of lives, and lost goodwill. FOR WHAT? US interests ? WHAT INTEREST ? . . . . China greatest threat next 50 years.
  • 6 hours Why is Strait of Hormuz the World's Most Important Oil Artery
  • 5 hours California's Oil Industry Collapses Despite Shale Boom
  • 3 hours North Dakota oil output totals 1.39 million b/d in March, up 4% on month: state
  • 1 hour Misunderstanding between USA and Iran the cause of current stand off, I call BS
  • 2 hours Rural and Conservative: Polish Towns Go 'LGBT free' Ahead Of Bitter European Election Campaign
  • 2 hours Global Warming Making The Rich Richer
  • 8 hours IMO2020 To scrub or not to scrub
  • 10 hours Knock-Knock: Aircraft Carrier Seen As Barometer Of Tensions With Iran
  • 14 hours Crude oil?
  • 7 hours Iceland Reducing Gas Stations By Half By 2025
  • 2 hours Compensation For A Trade War: Argentina’s Financial Crisis Creates An Opportunity For China
  • 10 hours "We cannot be relying on fossil fuels to burn as an energy source at all in our country" - Canadian NDP Political Leader

The Mini-Bear Market For Crude

Trading Screen

Markets have hit a rough patch – and oil is on the negative end of just about every indicator that appeared in the last week. Let’s go through them all and perhaps try to find where the light at the end of the tunnel might appear.

First to consider are the equity markets at large. No one can ignore the pressure that particularly EM and European markets have been under in recent weeks, and in the last weeks that pressure was transferred to the US markets through a small rise in interest rates from the Federal Reserve. Since then, equity markets have acted more bearishly, and this has created a general ‘risk off’ trade that has affected commodities as well. As we noted last week, indications of a hardening of the US/China trade war hasn’t helped matters either.

But on to energy specifically – here are the three biggest trends have negatively impacted oil.

1 – The withdrawal of hedge fund money from futures. We noted the historically high ratio of longs to shorts in futures in this column two weeks ago, and mentioned the likelihood of a sell-off in oil based solely on those positions being liquidated – below the ratio from September 25th:

(Click to enlarge)

And the contrasting chart on October 10th:

(Click to enlarge)

All indications are this withdrawal of money from oil positions will continue to pressure markets for a while yet, but on the positive side, sets up for a strong…




Oilprice - The No. 1 Source for Oil & Energy News