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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.
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ZH,
That is a very good point. The Saudis (Sunni) would love to take out the three way oil alliance of Iran/China and Russia (which all support the Shia's) this is perfect example of "preclusive purchasing" in economic warfare. http://online.wsj.com/articles/inflation-racked-russia-considering-price... take out the Russian economy, kill the ruble, then take away oil revenue.
That and China is crashing...plus boarders/trade routes could shut down on Ebola going airborne.
Gas $1:20 USD per liter in canada
I don't think the Saudis have anything to do with it. I think it's Yellen, lowering inflation, temporarily suspending "QE", to benefit Democrats as best as possible in the upcoming election. Bernanke provided the same courtesy to Republians when inflation, reflected in gas prices, fell sharply in 2006 and 2008, just prior to the elections in those years. It didn't save Republicans and I don't think it will save Democrats. Watch those gas prices rise, once again, once the election is over.
Panic Pizza :
A thick burnt crust with embedded fingerprints , with a scorching Scoville 2 000 000 topping
http://en.wikipedia.org/wiki/Trinidad_Moruga_Scorpion , with http://deathwishcoffee.com/ to follow .
Then panic .
It is interesting that oil prices have gone down almost $13/barrel (13.4%) in the last month but my gas prices have dropped a whole 5 cents (1.4%)
$3.11 for regular unleaded self-serve, up from Sunday’s $3.08. Must be making up for the shoplifting.
China watched the games Europe. And USA played with Russia... they will look to be independent of that system.. including energy and finance.
Maybe. China can dump some of those usd and stockpile some cheaper oil.
This is why oil is crashing in my opinion:
http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-b...
and here:
http://www.sifferkoll.se/sifferkoll/?p=401
Current price is just about where it crashed to in mid-2012, but it immediately "recovered".
I wonder, lower oil price could be Yellen's ace in the hole for ending QE without crashing the economy, though I don't see how it affects short interest rates. Cheap oil, if it could hold even around $80, would be a tremendous boost to the economy. So sure, Fed has promised to print for SA and to use yet another secret mechanism to do it. Betcha.
Let the Arabians chew on their words and some below-production-cost prices for a while. Then we'll see. I write code too.
SA has lived on a gigundo welfare budget for decades. If their income falls it's hard to see how the government can survive or function for more than a year or two, living off handouts from the royals who have stolen a trillion or two over the last thirty years. I doubt they would hand over much more than one or two years' deficits before things would collapse there utterly.
Which I have no problem with, I'm just saying.
If you had a set, you'd load up on some ERX right about now. I would, except that I am already loaded up on NUGT.
Isn't it funny how everything under The New Normal is like the first time ever (aka abnormal).
Is that what an oilfall looks like?
Whatever it is, it sure is pretty.
The end is nigh! Oh wait that WTI chart looks to have some pretty sharp drops in 11, 12, 13. Pretty sure it was in the 70s twice then.
I'm sure we'll be back needing the push bike by Xmas.
This is about hedge funds not the Saudis.
MLP's got whacked. GZM GOF
Earlier I described how crude oil went from $100 a barrel in Dec 2007 to $147 a barrel in July 2008.
Here is the takeaway.
1) The rumor about oil had been $150 a barrel.
As you can see the manipulators never let the price hit $150 and the little tag-alongs never got out at the top and probably rode it back down to $100.
2) This manipulation took place in 2008. The government knew that a recession had started in December 2007, but kept it from the commodity trading public.
It's a good bet that Wall Street knew about the recession and that the syndicate that started the $150 oil rumor knew that they were moving oil up in a recession.
ANYBODY SURPRISED?
before manipulator let oil hit 150, they have to keep it under 110.
i let you seek by yourself why 110 is the roof.
double post
Dunno.
$150 was the price mentioned in the rumor in early 2008.
$110 is near a recent high of oil in 2014.
Are you conflating the earlier manipulation and my more recent gimcrackery?
looks like isis is leading the benchmark at 42 dollars a barrel.
get your halal oil at half price
"Margin call, Gentlemen"
Yep, and that's all it is.
It won't last long. Low prices puts the frackers out of business and they are important polluters to the water table.
Let's see...election coming...and Arab / traditional oil bent on bankrupting the shale oil industry. Move along...these aren't the derivatives we're looking for.
No comment on this gem
WASHINGTON, October 15 (RIA Novosti) - Europe will continue to rely on Russian oil and natural gas for a large part of its energy mix through 2030, barring unforeseen, drastic policy changes, said Tim Boersma, a researcher in the Brookings Institution's Energy Security Initiative (ESI).
“In sum, the analysis suggests that the transformation of fuel mix in Europe is not going to take place,” Boersma said on Tuesday, reviewing the conclusions of a new Brookings study entitled “European Gas Market Functioning in Times of Turmoil and Increasing Import Dependence”.
“We do believe that the share of Russia in Europe’s gas mix will be substantial and we also find in our analysis that for the larger part of Europe that’s not problematic.”
Over the past six months the crisis in Ukraine has led western policymakers to renew emphasis on decreasing Europe’s reliance on Russian energy imports.
According to the Energy Security Initiative’s research, it is unlikely that Central and Eastern Europe will take steps to more deeply integrate their energy systems, thus reducing the need for Russian oil and natural gas, despite security concerns raised by policymakers.
Moreover, ESI’s report notes that “Russian natural gas will be very competitive in Europe” well into 2030, with slight offsets expected for the projected increases in liquefied natural gas.
Boersma stressed that in spite of ESI’s projections, there is always a chance of major policy changes. “I think that in a market environment, economy dictates certain realities. [But] the market reality as of today is not the reality of tomorrow and unexpected events could trigger such policy interventions,” he told RIA Novosti.
Boersma further warned against dismissing political realities saying, “It may very well be that there is a mismatch between what one would... expect a market to do and what political realities are. Those can tend to be not aligned.”
One potential policy challenge explored in the report is the impact of shutting off gas transit through Ukraine. Under that scenario, the researchers noted that Europe as a whole would only suffer a six percent decrease in gas consumption.
However, the consequences would not be evenly distributed. Austria, Bulgaria, Bosnia and Herzegovina, Slovakia, and Serbia could see 50 to 100 percent reductions in gas consumption, while the Czech Republic, Romania, and Slovenia could see a reduction of 20 to 50 percent.