WTI and Brent

Active Mo. Hourly

Following a choppy, overlapping move up to 89.19, WTI has had a clear impulse wave down off the highs, "i". This has now been corrected in a clear abc pattern up for a 50% retrace, "ii".
So most likely we are seeing the beginning of the next leg down; " iii of  (5) of -3- of  3 of C" .

Active Mo. Daily
 click to enlarge

On the Daily chart the recent move up had many characteristics of a corrective counter trend move,  a rough 50 % retrace of the preceding move down that ran into trouble around the 4th of lesser degree.
Note that it DID NOT overlap the termination of  -1-  at the 89.61 low.
It may be that the low labeled (3) of -3- will turn out to be simply the -3-, but for our intermediate term purpose it is  irrelevant. Both will be followed by lower lows as 5th waves are made to complete a count down. In fact, it may well be that the 5 waves we are seeing unfold to the downside, will end up being a sub wave of the C down, rather than it's entirety.

Again for the short and intermediate term that is less critical; bounces will be followed by  lower lows.

One thing of particular note this morning has been the strength in WTI despite the Libya news (or because of it actually).
WTI less Brent
click to enlarge
Friday the spread settle was 26.23, it is currently 24.65. Obviously the explosion in Brent premium was concurrent with the Middle East disturbances and the Libyan protests that began in mid Jan.
Plenty of room for the spread to come in,  considering austerity measures and other little problems for the Eurozone.  French gasoline demand for July was reportedly down 7.5% y on y. 
The unwind can create short term WTI buying.


Comments

Post a Comment

Popular posts from this blog

WTI Update- a 4 Handle Future?

Image
From my last post Dec 28, " Before we get into next year, short term the WTI has a good deal of upside risk to between $48 and $54, with $51.50 being my favorite cluster of resistance/ and a measured target for a 4th wave." Hourly click to enlarge As can be seen, WTI is in the high side of that range and evidencing some recent weakness. It does have a "look" that could produce a higher high at the top end of the range there, or even somewhat higher.  However the greater risk, short and medium term is to the downside from here.  It may turn out that a "b" wave chop down is in the cards with a subsequent "c" wave up,  but that kind of move can be deep and retest the lows . See above Fib retracements, particularly the .618 and .78  Longer Term Risk For Bulls AND Bears The Decline click to enlarge While the labeling of the subwaves above can be argued,  including whether the wave down is completed yet or not,   the $
Read more

Biden Climate Plan and Global GDP

Image
 KUDOS, and I mean it, to Biden. Real implementation will be incredibly difficult and failure will mean doom (don t think your grandchildren are going to survive in a world without plankton).  By next election cycle the path the world is on will be visible to all and most likely we will see spiking carbon emissions, devastating weather catastrophes, the need for even more investment, carbon taxes, and even more weaponizing of painful choices.  The pandemic definitely decreased global emissions. To stay under the limit on future emissions needed to keep climate temps under the 1.5 centigrade increase, that same decrease in emissions Y on Y has to be achieved every year until 2030. Reality No.1)  Co2 and other greenhouse gas emissions have a very high correlation w Global GDP, .87 to .93 Climate change is unfortunately global so don t bother with arguments based on regional data. In the United States some progress growing GDP while cutting emissions has been achieved in some locales. Mos
Read more

Gasoline a By-product of Distillate

From FT Energy... US petroleum stocks fit for bursting Posted by Izabella Kaminska on Jan 14 11:45. Weekly US energy inventory data release on Wednesday confirmed the unbelievable. US petroleum stocks rose in the week despite especially cold weather in the region during the period. Meanwhile, Dennis Gartman of the Gartman Letter draws attention to the fact that aggregate inventory rose by 8.9m barrels, amongst the largest weekly aggregate increase ever. More absurdly still, gasoline stocks are now at levels not seen in two years — some 10m barrels higher than they were last year....... The market responded to the disconnect between distillate and gasoline demand by storing the former offshore in floating storage. This is easily done for distillates. But now that we’ve seen a bit of a pickup in demand for distillates because of the weather, a potential surplus of gasoline has been produced. And, unlike distillates, gasoline is not easily stored offshore. Hence the probab
Read more