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Why Oil's Post-QE Plunge May Be Over

Tyler Durden's picture




 

A few days after the Fed launched QEternity we posted a roadmap for the post-QE track that Oil prices have mysteriously followed. We are now T+20 days from QEternity which corresponds to the post-QE trough based on the average of QE1 and QE2. What is fascinating about the following chart is just how closely the price of WTI crude has tracked the average path post-QE that we laid out three weeks ago. Is this the short-term lows? Who knows, but it seems that the divergence between WTI and Brent is narrowing with WTI playing catch up...

 

Post-QE performance of WTI...

 

and Brent-WTI is compressing today (lower pane) after over three days of straight line divergence...

 

Charts: Bloomberg

 

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Tue, 10/09/2012 - 14:53 | 2872020 ParkAveFlasher
ParkAveFlasher's picture

You mean, people really need oil? 

Tue, 10/09/2012 - 15:02 | 2872071 Ruffcut
Ruffcut's picture

I don't need it. I want it.  The amerkan way is to want first and need second.

The assholes that run(ruin) this country want 5 bucky gas. 

Tue, 10/09/2012 - 15:19 | 2872159 Ahmeexnal
Ahmeexnal's picture

"Spontaneous combustion" theory confirmed: Russian missiles spontaneously detonate causing huge mushroom:

http://english.ruvr.ru/2012_10_09/Blasts-rock-Orenburg-polygon/

 

According to preliminary data, the spontaneous missile explosion at the polygon near Orenburg has caused no casualties. The military were to dispose of several missiles, which spontaneously detonated resulting in a series of major blasts

A train loaded with missiles prepared for disposal has caught fire at a polygon outside Orenburg.

A series of blasts have reportedly shaken a local military polygon 40 kilometers off the Russian city of Orenburg.

Tue, 10/09/2012 - 15:22 | 2872180 NotApplicable
NotApplicable's picture

Burning trainload of missiles! Now there's something you don't see everyday.

Tue, 10/09/2012 - 23:13 | 2873421 markmotive
markmotive's picture

Get $6 gas and all of Amerika is going to look like Detroit.

50% unemployment, 7/10 murders unsolved, 95,000 abandoned homes...and so on:

http://www.planbeconomics.com/2012/10/07/unemployment-is-up-to-estimated...

Tue, 10/09/2012 - 15:35 | 2872266 moonman
moonman's picture

Just think we amassed the largest nuclear arsenal in the world at a cost of trillions of dollars to defend our country from missiles that explode when they move. 

Tue, 10/09/2012 - 18:16 | 2872773 edifice
edifice's picture

We have the Pentagon, and they have the Polygon? Wow. Like Colossus and Guardian.

ESTABLISH COMMUNCATION...
OR ACTION WILL BE TAKEN...

Tue, 10/09/2012 - 14:54 | 2872028 slaughterer
slaughterer's picture

Texas tea...

Tue, 10/09/2012 - 15:01 | 2872066 RSBriggs
RSBriggs's picture

Oil that is.  Black gold....

Tue, 10/09/2012 - 15:09 | 2872113 TheDarkKnight
TheDarkKnight's picture

texas tea party

Tue, 10/09/2012 - 15:19 | 2872157 RSBriggs
RSBriggs's picture

Bevery Hillbillies

Tue, 10/09/2012 - 14:55 | 2872030 LawsofPhysics
LawsofPhysics's picture

The post "QE to infinity" plunge for any assets of real fucking value is over.

But that's what the fed wants, with inflation being so low and all...

discuss...

Tue, 10/09/2012 - 14:56 | 2872033 malikai
malikai's picture

All I know is volatility is mental right now.

Thanks Ben.

Tue, 10/09/2012 - 14:59 | 2872058 Meesohaawnee
Meesohaawnee's picture

isnt this kinda "after the fact"?

Tue, 10/09/2012 - 15:20 | 2872165 NotApplicable
NotApplicable's picture

How else does hindsight work?

I like how oil ran up the five days prior as well. Why it's as if somebody knows something...

Tue, 10/09/2012 - 15:08 | 2872096 slaughterer
slaughterer's picture

While most institutional portfolio managers are hedging deflationary risks, oil sends 25 F-16s, $1 trillion in annual MBS purchases, and one good Iran-nuclear-missile-capable -in-2-months report to make them look like idiots.    That T-20 chart was very useful, thanks ZH.  

Tue, 10/09/2012 - 15:09 | 2872111 singsing
singsing's picture

I used to worry about oil depletion but I just don't have the energy anymore.

Tue, 10/09/2012 - 15:24 | 2872194 Spastica Rex
Spastica Rex's picture

LARF

Tue, 10/09/2012 - 16:39 | 2872506 RSloane
RSloane's picture

I read that as LARP and my first thought was *lightning bolt, lightning bolt!"

Tue, 10/09/2012 - 15:12 | 2872125 Duke of Con Dao
Tue, 10/09/2012 - 18:51 | 2872878 hannah
hannah's picture

duke - you have what(?) 230 fricking videos...?! i tried to watch several but they are so lame....didnt someone tell you after like the 5th one to stop...god by the 115th one didnt you get a clue?.........230 fucking videos...?...all bad.

Tue, 10/09/2012 - 15:20 | 2872167 LongSoupLine
LongSoupLine's picture

ahhhh, the poetic ballet of derivatives.

Tue, 10/09/2012 - 15:22 | 2872181 DUNTHAT
Tue, 10/09/2012 - 15:26 | 2872202 CrashisOptimistic
CrashisOptimistic's picture

And again, the "price" of oil has not changed in 70 million years.

It is 5.6 million BTU's per barrel.  Spend more than that to get a barrel out of the ground and you have a loss.

The dirty little secret of the world is we're still spending less than 5.6 million BTUs to get a barrel out of the ground, but we're spending more, and more and more, and that, ladies and gentlemen, is the source of the world's upheaval.

News Flash: That's never going away.  It's never going to get better.  Tough luck for the young, but that's the way it is.

Tue, 10/09/2012 - 15:35 | 2872242 LawsofPhysics
LawsofPhysics's picture

Joules is a better unit of measure for energy because BTU changes depending on the substance in question, but yes, you don't get something for nothing, unless you are a banker with a mighty military.

If you spend 5000 Joules to recover 250 Joules, then yes you are only hastening your own demise.

Tue, 10/09/2012 - 18:53 | 2872884 hannah
hannah's picture

"If you spend 5000 Joules to recover 250 Joules, then yes you are only hastening your own demise."

 

i thought this is how green energy worked...?

Tue, 10/09/2012 - 16:54 | 2872551 tradebot
tradebot's picture

The answer is solar powered oil wells...duh

Tue, 10/09/2012 - 15:32 | 2872245 geotrader
geotrader's picture

XOM key resistance at 95.00.

Tue, 10/09/2012 - 15:36 | 2872264 iamse7en
iamse7en's picture

ZH. Please fix the RSS partial subscription issue. This makes it a PITA to have to click every single link. Move it back to FULL RSS please!

Tue, 10/09/2012 - 15:36 | 2872269 TooBearish
TooBearish's picture

opps so whats a few hundie mil in a payoff- just the cost of regular biz at the TBTFs...will b settled wif no court date...

Tue, 10/09/2012 - 15:40 | 2872295 Flakmeister
Flakmeister's picture

Where are the abiotic oil wing nuts when you need them?

Tue, 10/09/2012 - 15:40 | 2872296 dcb
dcb's picture

I trade uco and sco, wish I had focused onlyu on that the past few days, good volatility has made for good money. if you trade this be very careful and go back and forth on the charts, simple reasons is uco was a sell at todays high by trend, sco you would have covered your shorts. it's very frustrating, but the two charts do not have at all the same inverse charts at all. uco didn't break a weekly high, sco broke the weekly low. be very careful

Tue, 10/09/2012 - 15:42 | 2872306 CrashisOptimistic
CrashisOptimistic's picture

Or better yet, stop trading.  It's all bullshit and any money made is purely random.  You can do that in Vegas.

Or best of all, cash out and find some farmland.  It's the only thing that has meaning.

Tue, 10/09/2012 - 16:17 | 2872441 rayduh4life
rayduh4life's picture

Pretty much what I did.  Sometimes I miss the game and wax nostalgic but it only lasts a few seconds.

Tue, 10/09/2012 - 17:51 | 2872704 Randy Goodnight
Randy Goodnight's picture

Obummer is going to have to pull an unemployment like stunt and keep Oil prices down if he wants to get re-elected.  If prices get away from him, it's over.

 

Tue, 10/09/2012 - 18:55 | 2872889 hannah
hannah's picture

obama will just have the BLS issue a report that gas prices are DOWN and every fucking merican will believe it....

Tue, 10/09/2012 - 19:21 | 2872954 Venerability
Venerability's picture

Tyler: Spread "narrowing" all the way to $22?!!!

One thing is clear: Move in the energy stocks today was pretty silly, considering they should collectively have a better earnings season than many other sectors.

And as I have said elsewhere, the PM stocks are going to have an excellent quarter collectively compared to the past two or three quarters. They will get raised ratings and raised targets, which the Short side, of course, is worried about.

We all know what is going on now is largely pre-positioning and moving bets from some sectors to others. C'est Le Market.

   

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