It appears the underlying fundamentals have hit equilibrium. The supply/demand imbalance continues to get worse as more countries post econ data supporting slowing trade. My favorite number so far this week is from Korea. The 11th largest economy in the world reported a 10% decline in exports from the previous year. Here in the US we are expecting inventories to pick up (possibly posting net gains for the first time in weeks) as production gets back to peak capacity after tropical storm Barry disruptions last week. Despite the increasingly bad news for crude bulls, geo-political tensions continue to escalate in the gulf as Iran seized a UK affiliated tanker and its crew. The UK is said to be looking at sanctions against Iran but I doubt sanctions would be enough to see prices rise. If we get another tank seizure or drone incident that could change. I'm still bearish long term and net bearish in the short term but I think this could be a "choppy" week for Oil as the bull and bears fundamental narratives vie for control of price action. Longs should be wary of bearish API and EIA numbers this week and Shorts will want to stay up to date on developments in the gulf.
Agree? Disagree? Let me know what you are thinking!
Agree? Disagree? Let me know what you are thinking!