This page has been archived and commenting is disabled.
Crude Crashing: Brent Is Most. Oversold. EVER
Yesterday we lamented the ridiculously oversold levels in West Texas Intermediate, which as BofA calculated, has hit "oversold" levels for only the third time in six years. We assumed that this could be the basis for a short-term rebound. We were wrong, because we clearly had no idea just how determined the Saudis are to crush Putin into the ground courtesy of plunging oil prices.
As of moments ago, WTI has tumbled nearly $4, some 5%, to just over $81...
... which just goes to show how idiotic any reliance on charts is in a centrally-planned world, in which commodities are nothing but political weapons. Bottom line: based on its weekly RSI chart, WTI has just hit the most oversold levels since Lehman.
But to our rather great dismay, what is gong on with Brent turned out to be far worse, and as the weekly RSI indicator shows the selloff in Brent is now the worst, well, ever!
In other news: Andrew Hall, our condolences.
»
- 85857 reads
- Printer-friendly version
- Send to friend
- advertisements -
Most overbought?
I'm saying Snapchat - valued at around 10 billo, it is, along with the price of "gold" some of the best extant proof that the market is mired in epistemic entropy.
What is snapchat?
i know what a snapper is. i guess it's liking talking with a snapper. vagina monologues anyone?
"We were wrong, because we clearly had no idea just how determined the Saudis are to crush Putin into the ground courtesy of plunging oil prices."
puh-leaze
this might have a bit to do with it ... talk about a "miss"
The International Energy Agency (IEA) trimmed 2014 oil demand growth forecast to its slowest in five years on Tuesday.
In its monthly oil market report, the IEA cut its forecast for the amount of expected oil demand this year by 200,000 barrels per day to only 700,000 barrels per day.
http://www.icn.com/en/commodities/2014/10/14/oil-demand-growth-forecast-...
because their forecasts are so accurate.
Gold stocks up on cheap oil. Fuel is a major expense for miners.
What makes you think gold miners buy oil? They buy gasoline and diesel, when those prices drop, maybe they do better but don't count on gold not coming right down too.
because oil is made from the finite amount of old dinosaurs, plants, and stuff. /Sarc
lol.
"No oil company has ever successfully found a well using the theory and it is generally considered pseudoscience on the order of global warming denialism."
That makes it true in my opinion.
Sounds like you're describing the elected government. Looks like there will be a never ending supply of dinosaurs and vegetable matter.
What if...
... this oil price manipulation is not to upset Russia but to cause a tiny little bit of deflation in the US to have a good reason to print more money??
This will,
Not hurt the Russians that much and just turn them further east
Not stimulate the world economy, as the problems run deeper and most people won't see any difference in prices.
Kill fracking, which is a good thing.
Destabilize Saudi more..
Create more waiste.
Not last very long, because it can't
Lead to a super spike after things get too far from market fundamentals, like metals prices mine costs.
Oil should cost a lot, there is a cost to burning it. The USA's cost seems to be dealing with terrorists.
market funda-what-als???
;-)
Hello 2008, Hello Lehman?
thank you
sometimes it is just that simple
recession near at hand
I thought the $4 a gallon deal pushed us over the edge. My memory be foggy now from the whipsawing and QEing and such.
I wonder is this THE TRUE SIGN of eurozone breakup (as seen by the insiders) as all that euro like conduit transport activites in a extremely scarce money system goes the way of the dodo.
Once that happens european demand goes puff.
Is the US willing to trade a resurgence of gasoline wastage just to bust chops on Putin?
At the same time, is it willing to force the close down of the fracking boom and return to a dependency on the whims of the Saudi monarchy?
Just in time for mid-term elections.
See this, this is my surprised face...
+1
Why do the trolls come out everytime oil drops and ask about pump prices? It takes a little while for the price at the pump to fall, and it IS FALLING, you dumb shits!
Because the oil companies don't want to keep the trolls on payroll when times are good, or they have other things for them to do like cleaning the rest rooms.
Poor old Big Oil needs your support. They're doing everything they can to give us plentiful energy supplies (bridge for sale too).
It's called hysteresis. And yes it is systemic.
Did Ireland just pull the plug?
http://www.dailytech.com/Ireland+to+Close+Loophole+Apple+and+Google+Used...
Good catch
Let's see if Luxemburg does the same.
Somehow doubt it.
Machines pushing the against 2.20 10YR level, looking for a breach. The question of the last hour will be: is it just a fake-out to trap variious longs/shorts in the bond/equity markets then scream back to the highs, or will this end up resembling yesterday's "thud" ending?
Down you go you bastards! I'm biding my time, waiting to fill up the tank of my 72 buick skylark
Excuse me but doesn't a sub $80 price mean fracking shuts down in the US?
We already lost money on the corn-to-fuel gambit, with wall-to-wall refineries in the Midwest. Now we are going to lose our shirts on fracking.
It's all good though. We don't mind committing seppuku as long as Putin feels a sting.
Not to worry. As long as Goldman keeps making money, everything will be hunky dory.
Could probably put them corn distelleries to a better use anyway, just buy some oak barrels and wait a bit.
Not to speak of Canadian tar sands. Watch Alberta lead Canada into full blown recession.
Did that housing bubble pop yet?
Deflation is good for consumers. Why is ZH crying about price being lower?
Deflation like inflation helps only those who come into contact with the money first, which is nobody around here...
How would one use the word "manipulation" in a complete sentence?
Wall Street is a street in NYC!
I love waterfalls
it will lower plane ticket prices for Liberians needing an economical flight out
good thing we have secure borders !!!
WOOT deflationary collapse bitches!!!
Look at Dow last 15 mins! And Oil!
Too bad it will never *actually* happen cause they still have a few more high-speed settings on the printer they havent tried yet.
Enjoy it while it lasts!
lower oil prices means more sales of quite high tech weapons, especially fighters, by Russia to China.
it also means more oil and gas being bought/sold without the use of FRNs as BRICS efforts to de-dollarize continue apace.
But it will also surely help with the holiday shopping and travel season - oh think, just think, of the temporary part time jobs that will be created!!!
You beat me by ...... that much!
US gasoline consuption has declined by over 50% since 2007.
+
US oil production has doubled in the same time period
+
The global economy is collapsing
=
Oil will go back and test the lows at less than $10.
actually no
Oil hits 10 USD I SWEAR TO GOD I am going to buy an entire tanker! (Tanker Truck not Panamax lol)
Talk about buying some physical!
US gasoline consuption has declined by over 50% since 2007.
Utter bullshit. US per capita consumption peaked way back in 1990(!) at 1.32 gallons per person per day. As of July 2012, that value is 1.12, which is a 15% drop, not 50%. The drop from 2007 is even less.
US oil production has doubled in the same time period
More bullshit. US crude production in 2007 was roughly 5 million bbl/day; today it's about 7.5 million, a rise of 50% not 100%
The global economy is collapsing
Well, you got one right. But I doubt your conclusion, though.. it might get back to $60, but not $10.
Facts matter. All that growth in production must be continuously replenished. And, its CASH FLOW breakeven is north of $80 per barrel.
Madcow,
Don't use that link; it's misleading, because retailers are getting out of selling gasoline.
Without boring you too much; and because I have posted this before:
US gasoline 2007
Produced: 3.3 billion barrels
Imported: 173 million barrels
Exported: 1.5 million barrels
US gasoline 2013
Produced: 3.2 billion barrels
Imported: 16.1 million barrels
Exported: 4.4 million barrels
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mgfupus1&f=a
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFIMUS1&f=A
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFEXUS2&f=M
Conventional Oil
Consumption 2006: 21.7 million barrels a day
Consumption 2014: 18.4 million barrels a day
http://www.eia.gov/countries/country-data.cfm?fips=US
http://www.eia.gov/countries/index.cfm?view=consumption
Produced 2006: 5.1 million barrels a day
Produced 2014: 7.4 million barrels a day
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A
Unconventional Oil
Shale 2014: 3.3 million barrels a day
http://peakoilbarrel.com/eia-petroleum-supply-monthly/
Other Liquids
Palm oil, ethanol and other biofuels came to 2,354,000 barrels per day
Note: These are mostly produced outside of the USA
http://peakoilbarrel.com/eia-update-march-production-numbers/comment-page-1/#comment-45269
Okay - thanks Escrava!
My pleasure!
This is a “tax cut” for the masses.
Just in time for the holidays.
Watch for increased expectations for the holidays shopping estimates.
This is overall positive for the US economy.
Things are getting better all the time.
Just look at the price of oil.
You just have to read the oil leaves at the bottom of the barrel.
So oil is manipulated too? [sarcasm supreme, hold the OPEC, add cheese]
eyesofpelosi,
US financial system has most of the world, most of Europe, and all world’s commodities, by their balls.
Where's my cheap gas?
Never confuse gasoline with oil. They are not the same. Gasoline is a useless by-product of oil refining and if we all didn't drive trucks they couldn't give it away. Plus the govt will increase taxes to fill any void in the price of gas.
what will this do to Glencore's stock ???
I don't own any so I would love to see it fall !
Like all those other scammers of hi-finance.
"...BofA calculated, has hit "oversold" levels..." Well, if the BofA says so, then it must be true!
"...BofA calculated, has hit "oversold" levels..." Well, if the BofA says so, then it must be true!
If, as Kopits suggests, the oil market is actually supply-constrained rather than demand-constrained, the only reason for a sharp falloff in oil prices would be a precipitous drop in demand, which seems to make sense to me.
I haven't looked into it yet, but I would conjecture that Putin may have sold forward a huge amount of oil contracts to China at a discount, and consequently China has stopped importing Saudi crude. That may help to explain why the Saudis are suddenly going for broke. But like I said, I'm just surmising at this point.
You may have something there.
GooseShtepping Moron,
Great point.
Let me quick add these:
a) What you’re seeing it’s 1980’s play (in steroids). It’s to undermine the BRIC’s, because BRIC’s alliance CAN NOT succeed.
b) While strengthen the dollar (minimize inflation because of the need of endless QE in the US).
The BRIC’s is fighting for their survival; and the US to stay alive.
China has $4T in USD and $1.1T in UST. It can ensure that the BRICS survive. All these games do is to raise China's stature and diminish our own. Japan is done (wasted all of its surpluses on UST and financial assets destined to lose value) and Europe isn't far behind. However, both are much better off from a CA perspective and Net International Investment Position than we are. We are massively overplaying our hand.
arrogant empires do that
pride goeth before the fall
Interesting and would be good strategy. If he's smart, he would have done it in CNY, which is certain to strengthen in time.... $500 CNY would be a good price.... In a few years, $300 CNY will likely fetch the same.... While oil in USD will be $150....
they did recently cement the largest natural gas contract in human history, so the other deal is very possible
Holy shit Batman! A popular indicator from 1978 says crude is oversold!
BUY BUY BUY!
Now if we can get the rest of the market to crash as fast as oil has, but oil is being purposely driven down by Saudi price cuts and over production.
How do I buy brent using a fidelity account?
It happened the last time there was a U.S. election in 2012 and it is happening again. This time the drop is also hurting Mr Obama's nemesis, Vladmir Putin.
Well what ever the Democrats giveth to retain seats the market can take away with an Ebola scare or war in the mideast.
Just found out what Ebola did to my Hershey chocolate price today. 6 pack bars always $3 at Walmart was $4.27 today.
m.o.t.h.e.r.fu.c.k.e.r.s, now they are messing with chocolate!?!? They have gone too far, I suspect guillotines in 3...2...1...
Almost bought a TESLA glad I waited.
RSI Useless and Random
RSI Useless and Random
Ol Yeller stops QE and diverts the funds into crude shorts. Tax cuts for the little guy!
Great news I think I'll stop on the way home and buy a few fuel swilling Hemi's and SUV's, hell at this rate gas will be free by next week!
This can't happen to gold.
Short Oil. Long Nestle Quick.
Oil was/is one of the biggest bubbles. It went bonkers during the real estate bubble... As did gold and silver.
We might possibly see commodities come down reality...
Oversold my ass. All the data from anybody is manipulated and anybody using charts and not insider info for guidance, doesn't have enough money to trade this shit.
Demand is down due to: transportation efficiencies, 10's of millions out of work, USA oil glut, sanctions and counter sanctions, manufacturing efficientcies, and Ebola.
Where there is no demand there is no price. Looking more like the economy is collapsing.
+100. This has more to do with sub 2% growth world wide (some places even contraction), than it does with Saudi, Putin, and whatever other political hoohaa one wants to believe to explain the drubbing.
Sometimes....it really is about supply and demand and I am disappointed ZH has elected to posit some political bullshit story that is simply impossible to actually demonstrate. The simplest answer.....is like always....probably the right answer.
"The FED can change what things look like, but, the FED can never change what things really are." Brent, WTIC, just another piece of collateral diminishing in price- next up....housing?
Deleveraging is a bitch. It brings things back to where and what they really are.
I hope I never pissed anybody off here, and I mean no disrespect, but fuck, let's get off the political crap and look at it for what it really is.
Cheers
The Sauds are targeting shale oil in an effort to keep us dependent upon them.
Hmm...Could be. To be profitable shale oil needs prices to be higher than traditional means.
It will also hurt tar sands production and deep water drilling.
The Sauds are targeting shale (russian) oil in an effort to keep us dependent upon them.
there fixed it for yah,.
So much for "peak" oil.
Could easily be peak oil. In fact it predicts exactly this kind of behavior. High oil prices caused by inability to meet demand crushes the demand side of the supply/demand equation, then falling demand cause producers to panic and drop their prices while imposing conditions on customers. This is exactly what you'd expect to see if oil were hitting hard production limits.
Further, dropping prices causes future projects to be canceled/delayed which will cause a shortage in the future. Lastly, if and when the economy picks up due to low oil prices, they will immediately shoot up again with increased demand, causing another recessionary cycle. All part of peak oil.
Oil is abiotic. Google Joe Vials Peak Oil.
But Peak Oil works great when your big oil and you need an excuse to rig the price super high.
Flux is important asshat. How fast are we consuming oil versus how fast it gets replaced/regenerated.
America is still consuming damn near 18 million barrels per day (even with a decrease in demand), 60% of that is still imported.
Get out of the basement kid, it'sa big world. If you don't get out of the basement and engage the real world, conscription will make sure that you do. We have been here before.
Safeway Canada now accepts Canadian Tire money. That's how far the Canadian dollar has fallen.
Oil is blood
Oil MAY go down...it will ALWAYS go up unless MANY productive souls are removed from this earth
Even the price of oil now is politics - by minds with no bulbs, only stomachs!
Jesus Christo!
This is a good thing, why the worries?
SELL SELL SELL.
Let that suma bitch crash so I can take out the V8 for fun again lol
Sorry to ruin it - that cheap fuel has a small cost the Obolator wants a third and fourth and then an indefinite term of power, he wants to get elected a third term.
Oil is coming in from the sidelines.
Alternatively, a real Zombie Apocalypse is being priced in.
I think the US and Europe are in life support at the moment and they are in desperate need of quick revenues, so they pulled some strings in the middle east and negotiated this take down and a cheaper oil for some time so they can cash in fuel taxes revenues and overtake the shortfall.
Remember that 70% or more of fuel prices are taxes, fuel taxes is a blood line and used to fund the government, that is why you never see any alternative fuel solution than petrol getting main stream.
If this is really the case, it shows how this whole thing is hanging by a thread.
Wrong. This is all about punishing Putin and Russia. It's on like Donkey Kong.
For what I know Putin is making record deals in NG, and not only that the West is getting things working their way in Ukraine and Syria, why hammer oil? there is more into it...
Correct me if I am wrong. But couldnt Russia and China just dump its USD and buy oil reserves with it? Then wouldnt that flood of USD into the market cause the price of petrol RISE due to the massive influx of dollars into the market? Then would Russia/China then be able to seel THEIR glut of oil to competing countries in exchange for Rubles for a profit?
Serious question, I really dont know.
@WAR
Ahh....I should of warned you guys....We leased a new Prius last week...
Shit, you had to lease it? Loser. But yes, next time a little head's up. I'll let you know the next time I buy physical, deal?
Leasing is a bit more expensive because the govt taxes the interest payment portion of the monthly payment if you have a sales tax but it is not a bad thing in and of itself. It's just another financing method and for some people it works to their benefit.
Yup, and you get to offload it before the battery needs to be replaced.
If you know a little chemistry, then you know there is still other "value" in that battery. Moreover, I don't see that replacement cost being all that bad, I will be able to by a brand new car by that time anyway. I'll get more in scrap.
Prepare for the next move northwards, quick and strong.
According to the Rabbi doing the antjhems at the Kings game we are "true north strong and cool".
Not just hurting Putin. Hurting Frackers too.
That will teach Obama for not getting Assad out of the way for the Qatar Saudi Syria Turkey pipeline
Wait - Obama hates fracking (in the US) too
Score one for Global Warmers
Obama doesn't just hate frackers, he hates Americans.
Obola - there fixed it for you,.
He must love Ebola most of all because he sure wants to make sure you can come to America if you have it..
This is all Geo-politics. This is being done to crash the ruble, and destabilize Russia internally. An insider will assassinate Putin should this happen. The stage is being set.
Does not compute. Will do more harm to America as the stock market tanks than it will to Russia with the rouble. Mid East oil must be pushed down to attack Russia yet up to save America, plus the royal families / warlords. Rock: meet hard place.
We will see soon if it "computes". This IS the reason crude is being sent lower, whether it will work to their expectations is another matter. It has been working so far. Herculean efforts have been undertaken by the Russians to prop up the ruble, and yet it continues to slide. The western powers want war ultimately, and this is their best way to get it.
No, it isn't. The real reason is that there's no demand to keep prices so high.
I hope you have a good supply of tinfoil.
Oil prices is just a major contributor to excess state funds. Their market will adjust. If you think they will aim so he can be killed off, is funny. Then the same thing will extend to Harper, Saudi King, etc. Because, Russia produces much more than just oil. You are aware they also produce...end goods, right? While Canada has lost that ability for the most part and Saudi never had that. Saudi Arabia relies 90% of their finances on oil, Russia relies 25% of its consolidated budget.
The Saudis have long backed ISIS. Maybe the House of Saud is pricing in increased flow of cheap ISIS oil ...
The are various possible contributors
Low demand
Weakening economies
Russia making supply agreements to China
Isis supply
My favorite image is putin putin the squeeze on obomber.
WTI oil was ready to tank last week
http://bullandbearmash.com/chart/wti-oil-daily-continues-tanking-support...
Mid 70s before we slow down.
I agree. +1. The reason the author gives for Wti's slip is in my opinion bullshit. Remember the EIA releasing consumption data showing world demand for oil not seen at these levels since the 1970's? And on this site no less?
Fact is, there is so much of it floating around in barges....there's no fucking place to put it....thanks to ZIRP and oil independence initiatives. So, on the contrary I think the charts were very indicative of the old days where trend lines and moving averages and bad news matters. It was telegraphed over a month ago! I say 70's for its first leg down......60's if you're thinking Fibonacci or just even a standard deviation past the mean to the downside.
ZH contradicting themselves on this one......in my opinion of course.
Cheers
Explain to me how that works when the very same oil companies that are getting fucked are the ones bankrolling the real R&D on all those "green" technologies?
Speaking of contradictions...
I see a whole lot of useless paper-pushing fucks that are about to become eunemployed. At the end of the day, I can see the real value in what the oil companies are actually doing.
my opinion of course...
Hey Laws. I agree with the paper pushing fucks part. I'm just pointing out the obvious is all. And a declining oil price in an economy that has more people not working than working (almost)...well that just seems pretty fucking obvious to me.
Those RSI parameters actually mean something. I think it's funny people never choose the values with purpose, just use at random what's default on their software / web page.
Certain technical indicators have a 80% accuracy rate, take various forms of MACD
However technical indicators are really junk the best is just learning to read the candles themselves.
Candles are junk as well.dont waste your time learn price action ie support and resistance
Only if you manually change the parameters, especially for MACD. Using the defaults they are 0% accurate.
To be expected .
The probability (95%+) is that the oil price will fluctuate between $36-$72 per barrel , with competition driving it to the lower levels ,
http://andreswhy.blogspot.com/2012/06/fracking-and-oil-price.html
Good. Get the fuck out of my county, you fracking assholes.
(I'm safe yelling this in a crowded place, they already left like three months ago. They must be privy to something.)
ya, no longer profitable at these prices...
You people have to understand what "price" means, how money is created, how money is destroyed, how reserves and debt are created and destroyed, .....before even getting into a discussion
Am I late to class? Sorry.
Hey Moe - he's an asshole. Where 's Larry?
I was out buyin' 300 shares of onaconaponasan, and shortin' Sodastream for all our margin. But all I got was these magic beans.
It is falling because the Ebola travel bans will be taking effect as soon as the are done selling all their stocks. If you thought demand was bad the last few years, just wait until Obama is finally allowed to close down air travel.
Disenbunch your knickers, boys!
It wasn't the end of the world.
oh, wait a minute
As far as the Saudis undercutting Russia and putting them out of business is concerned, don't make me laugh.
First, let me repeat this, Russia has a blank check from China.
Second, Russia could have a going out of business sale which would make the sand near Ghawar radioactive until Mohammed rides back down from Paradise on his white, winged horse, el Baraq, or Barack as we know him today.
Third, even the though the dollar has been strengthening lately and may not be the egregious piece of shit that it was at the begining of the year, it is still a festering turd and it beggars belief that the Saudis have accepted Obama's suggestion that they drop the price of their crude fall to $40 or $50 dollars a barrel AND THEN TAKE MORE WORTHLESS DOLLARS FOR THEIR VALUABLE OIL.
WHAT WE ARE SEEING IN THE OIL MARKET IS NOTHING BUT A GARDEN VARIETY COMMODITY MANIPULATION. WE HAVE SEEN THEM HUNDREDS OF TIMES.
definitivly.
Deflation and Inflation all at the same time. Ain't it great to dwell in a managed system ?
"oversold" is ridiculous terminology.
Whatever the underlying and whatever the last price, the next can be either higher, lower or the same.
Until everything goes to zero. Then it stays there.
ZERO would be "oversold" ....
The Price above,
the Kurds below.
I am no financial expert but surely as the US frackers are dealing in dollars they are the ones really getting hurt, whilst the Russians with a still depreciating Rouble are sitting pretty, at least in Rouble terms.
If it is oil that is driving the rouble down then they must be cheering Obama's oil strategy from the rooftops of the Kremlin. Their fighters/radars/tanks etc are now over 20% cheaper than this time last year. Not quite perhaps what the US planned?
Were it to be really hurting Russia it would surely be pushing them into hitting back at the dollar and US financial markets. This is the real problem the US has. It is trying to bully the world in so many ways but it is on a financial knifedge. Talk about the Emperor having no clothes!
BK the domestic Frack’in industry. After, government can offer choice, 100-year leases to the nice Chinese.
Hard landing, or soft?
I remember gas wars where my dad paid 11cents a gal. and got a free set of dishes. Bring back the good old days.
so it took a war with russia for our gas prices to fall. shows they could have done it at any time. saudis could have amped production and our prices would have dropped at any time.
Give credit where credit is do.
Our interminable recession had a little to do with it.
That escalated quickly
The rapidity of the falls make it certain that this Just another game aka gold a little to do with Saudi Arabia and more to do with some game the oligarchs just thought up.