Contributed by Rohit Goel
Crude Oil prices have been on a wild ride over the last couple of years, dropping from $100+ in late-2014 to $26 in early-2016, then miraculously doubling over the next few months. As the Energy Information Administration (EIA) explains, there are several factors influencing oil markets, such as production, economic growth, geopolitical and economic events, supply disruptions, speculator and money manager positioning etc. In addition, US Dollar also has a significant inverse relationship to oil prices.
However, the major reason for oil’s plunge since late-2014 was Saudi Arabia blocking an OPEC output cut in November 2014, with the intent of pushing oil prices lower, inflicting serious pain on the US shale oil industry (which needs high oil prices to break even) and increasing their own market share – so essentially, increased supply. The best gauge of how this increased supply has caused an imbalance in the global oil market is the EIA inventory report, which is released every Wednesday morning and has a big impact on oil prices. So let’s compare the price of WTI with the EIA inventory, starting in Jan 2013 when the market was in a steady state and remained so for the next year and a half (the period highlighted in yellow denotes the peak summer driving season – more on this later):
(Note from Tim: there appeared at this point a very large table, which I’m going to leave out, since the information is expressed in graph form anyway). (more…)
As inclined as I am to short anything with a ticker symbol, there’s one I avoid like the plague: Amazon. One glance at a chart will show you why:
I have a “moment of truth” every morning when I grab my iPad, bleary-eyed, from the side of the bed, to see what the ES is doing. This particular morning, I was bracing myself for +30 on the ES considering the Clinton momentum, but, happily, it’s only up 3 measly points at the moment. More important to me, crude oil is getting its shiny black bottom spanked, down about 2.7%. Some ridiculous rumor should be along any moment now.
Well, that was embarrassing. Within about 4 minutes of the debate starting, I figured it was all over for Trump. By about the minute #20, I shut off the television. I just couldn’t take it anymore. If you want a quick rundown, here are top ten memorable moments. As for me, I think the last meaningful chance for a real sell-off in the market disappeared with this debate, and as the ES plainly shows, the market considers President Pantsuit the hands-down winner. Three cheers for the status quote and another term for Obama. She’s going to win.
Yikes. I think he’s toast at this point. I couldn’t watch it past the first twenty minutes. I was live-tweeting from my iPhone on my sofa, and this pretty much tells the tale:
The ES zoomed 8 points higher based on his performance so far (from a -5 deficit to over +3 now). It’s a shame. I guess Obama gets a third term after all. This debate – – at least the first 20 minutes that I could tolerate – – was just embarrassing.
Nothing more to say until after the debate, which I’ll be watching with rapt attention. See you there.