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Crude Oil Plummets Most Since February, Nears 16 Year Support Line: Tap On The Shoulder Time?
Earlier today we commented that while stock markets across the globe, heavily influenced by central bank intervention from the PBOC to the SNB, are doing everything in the central planners' power to telegraph just how irrelevant Greece is, other indicators are far less sanguine. One example was copper, which plunged to a level not seen since February, and was in danger of breaching its 15 year support level.
The commodity weakness today has persisted and is now crushing both WTI crude and Brent, both of which are in freefall, and WTI is now down over $3 on the session, or 6%, to a $53 handle, the biggest one day plunge since February (and the third largest in years) to a level last seen in early April when there was much hope that the dramatic plunge in December and January was finally over. Turns out it wasn't.
And, just like in the case of copper, should the drop in Brent persist it too, like coper, would be in danger of breaching a very long-term support line starting with a base in 1999 and continuing all the way through the the plunges of booth 2008 and early this year. SocGen with more:
As previously highlighted, last May price action in Brent formed a monthly Spinning top pattern at the key resistance of $70/72, the interception of the upward channel upper limit and 2010 levels. A Spinning Top is a bearish pattern, rarely a reversal one though, which usually happens after an extended rally/a new high which indicates a pause in upside momentum.
After peaking at $70/72 levels, Brent has been correcting lower within a down sloping channel ($64.37-$58.30) and the down move suddenly accelerated after the up sloping channel in force since last January finally gave way (i.e. $62.00/62.30 levels, blue dash).
Brent is approaching near a key support region at $58.30/57.50, with $57.50 being the ultimate retracement (at 76.4%) of the recovery which took place from January lows to last May highs. In other words, a break below $58.30/57.50 would mean the extension of the down trend and a retest of the 15-year trend line support (at $52/50) with intermittent supports at $56.45 and $53.19. Near term resistance is placed at $60.60.
Daily Stochastic indicator is probing the same levels as in January and March and therefore underlines key supports are near.
However far more relevant than what some lines and squiggles suggest is the trajectory of this most traded commodity on earth, is the question: why is crude (and copper) suddenly crashing, and what is really going behind the scenes for crude to suffer such a dramatic one day move and whether, as some are suggesting, this is a margin-call related liquidation as some, still unknown, hedge fund got a tap on the shoulder (or alternatively someone big in China got an equity margin call and is taking it out on commodities).
Should the collapse persist perhaps this time, unlike the last tumble in early 2015 when many were expecting at least one commodity hedge fund to be carted out, there will finally be named "casualties."
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Yeah, i just saw that! -$3.16
Phuktard domestic E&P companies drilling unabated like a bad Ron Jeremy movie. We need to clean up these over-levered companies and let the conservative ones survive. Rig discipline needed.
What choice do they have with billions in junk rated debt on their balance sheets? If they don't keep drilling they default. The truly stupid ones are the bankers that keep the lines of credit open and keep increasing them.
If Greece and all the hundreds of Trillions of credit default swaps and massively levereged collaterallized debt obligations don't matter then the banksters shouldn't have to interfere.
Everything they're doing is only going to make the end of it all magnitudes worse than anyone is even prepared for.
And somewhere all alone in his jail cell Bernie Madoff still can't fucking believe he's the only guy in jail for running a Ponzi scheme.
Gold and silver just spiked. Guess they are as good as money.
Copper is having a rough day too. Oh and stocks. So it looks like it's gold and silver FTW.
I look at the chart and I see the club painting $60 until they could exit their positions then bombs away. It's a big club and you're not in it.
Would Ron Jeremy best be compared to an ultradeep water, a jack-up, or an onshore horizontal driller?
-$3.45
-$3.51
Here ya go...
WTI interactive chart
http://www.marketwatch.com/investing/Future/WTI%20CRUDE/charts?CountryCo...
Thanks.
Was looking at Bloomberg. http://www.bloomberg.com/energy
But the Market Watch interactive chart looks fun.
Much better:
http://www.investing.com/commodities/crude-oil-streaming-chart
Put the cursosr on the chart area and use the mouse scroll wheel to zoom in/out
Also click on "Interactive Chart" next to "Streaming Chart"
Then click on the "Detach Chart" button at lower right of top of chart
Then use scroll wheel to zoom in/out there.
suggest you overlay the 10yr Treasury to show how oversold the 10yr is. In January when WTI was this low, the 10yr was 1.7 to 1.8%.
NoVa
Poof - Canada's economy
Time to lower interest rates boys.
Tyler - has there been a newer version of this article (Feb) posted ???
"This Is The Biggest Problem Facing The World Today: 9 Countries Have Debt-To-GDP Over 300%"
It may become go-to guide for "Watching Domino's Fall for Dummies"
Thx :o)
-$4.06
-$4.47
$2.48
You know gas consumption is in a serious decline when the finance ministers begin sharing motorcycles.
http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/...
> -$3.16
Guys, we will see that a the pump soon.
Uh Oh ! Oklahoma Supreme Court rules people affected by fracking induced earthquakes can sue frackers.
http://www.resilience.org/stories/2015-07-03/citizens-can-sue-fracking-c...
Add to this that the oil hedge is coming to an end by year's end. Popcorn at the ready.
But. but. but we have no where else to store our crude! No empty tankers. No empty filling stations. etc. What are we to do?
WHAT? but, but, but, O said we are in our 5th year of recovery! Demand should be awesome!
DAMN, we were almost there, lift off was about to take off but the obstructionists here at ZH and other conservatives derailed the QE pumping. Things were goign great until they stopped and listented the crazies. THat's ok now we know who to blame and these CB's can really get us going again. WE JUST NEED TO PRINT MORE and things will be fixed, we were almost there.
Just like negative interest rates, let us pay the public for filling their tanks!!!
BTFD
Yeah Be The Fucking Douchebag.
The fucking dip buyers will need a douchebag soon to get their ugly sensation comforted.
In oil????? You got the wrong trading instrument buddy.
Deflation is always good for the price of crude........as long as you're a consumer.
$11 trillion printed by Central banksters since the last financial crisis of 2008 and yet commodities keep falling despite massive inflation:
Chapwood Index shows real inflation in US.
In 2014, it was 9.7% - 1212% of official US inflation (0.8%)
http://www.chapwoodindex.com/
The Chapwood Index reflects the true cost-of-living increase in America. Updated and released twice a year, it reports the unadjusted actual cost and price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the 50 largest cities in the nation.
All markets are manipulated and fake to give the illusion that fiat has value.
Did Goldman Sachs rig commodities markets?http://money.cnn.com/2014/11/20/investing/goldman-commodity-manipulation...
Does goldman serve baal?
'Serve'? Or, 'Are'...?
Very good question(s).
I guess we shall see very soon.
Oil is worth the same as gold. 35 dollars.
Edit: Sorry that should be oil is worth 2 dollars, gold is worth 35 dollars, and my labour is worth 12 dollars a day.
Edit: I'm well over-paid.
A forewarning of bad times ahead. Economies everywhere are grinding to a halt and the bond market will be hit hard. The FED's next round of QE won't be called QE and will be aimed at preventing a complete collapse. The problem is going to be the huge side bets like derivatives and shit will happen.....
... and then Peter Schiff's 9 year running prediction of hyper inflation might finally start playing out ...
The only thing that's prevented it so far is the fact that all that magic money went into the pockets of the mega-banks and the super-rich. If any portion actually escapes into the real world, bad things will happen. No worries though, it'll go to the same places as last time......
They can't just give the banks and super-rich money. That would be illegal. They'd have to lend it to them at interest. Maybe even negative interest.
The FED doesn't create money, they extend credit to the mega-banks, who then create money, a large part of which immediately goes back to the FED as "capital reserves". So you see it's all fair and above board, so move along, nothing to see here.....
Sounds great but the US better hope to heck it holds on to reserve currency status or continual printing could make Mr Schiff finally right after all these years.
Humans have been roaming around planet earth for what?...one hundred thousand years or so? 9 years is a grain of sand in a sahara desert of time.
I honestly think if it comes to it, they'll do a controlled demolition of stocks just like WTC7. Interest rates must be kept low above everything else. Wall Street fat fucks can still make money on crashes.
Gold is popping upwards now...
gold is up less than 1% on the day ... not sure I'd exactly call that "popping" ...
Gold will be popping if it "POPS" above $2000, this year. Otherwise it's just Ground Hog day, over and over and over, ad nauseam...$1220...$1160...$1205...$1184...
Come on buddy where are you.
The author's guess that Chinese speculators are liquidating oil positions to meet margin calls in stocks is probably correct. There may also be liquidations by Greek oil traders to raise emergancy liquidity.
Everything is a lot more boring today than i expected..
anybody want to buy a case of Popcorn.. just sitting here going to waste..
WTF?..(FRAK),the "fracking" ETF,which carries a hefty 82 forward P/E,down only 2% today,on low volume..So the underlying commodity crashes,but the stocks in it's sector hardly budge..
The only way to believe these hucksters is when you see a 50 cent drop at the gas pump. Then you know this shit's real. Otherwise, it's all bloviation and meeting newspaper deadlines.
KIA is offering the first 3 months payment free. Let's see if Toyota Prius counters with 6 months. Fucking stooges
BMW M5, The Power Of Ten http://m.youtube.com/watch?v=QL1k8USiO9oBe sure to take a geiger counter with you to the Toyota dealer if you go that route.
And derivatives start to blow.
uh what is so hard to see. money is being vaporized by defaulting loans. business is shit and buybacks don't help anyone. the swirling would be easier to see if it were not for all the fecal matter coming out of wall street and of course an election cycle heating up. I think it might turn out to be a crisis election you know keep the course steady on... straight down.
uh what is so hard to see. money is being vaporized by defaulting loans. business is shit and buybacks don't help anyone. the swirling would be easier to see if it were not for all the fecal matter coming out of wall street and of course an election cycle heating up. I think it might turn out to be a crisis election you know keep the course steady on... straight down.
Trend line support currently near 44.00-45.00 for the WTI crude oil contract will not be broken.
This is a multi-year buying opportunity in the crude oil market.
Jump Bankster Jump
and yet gasoline is $3 almost everywhere. I saw $3.39 in New York yesterday.
More proof that oil trading is purely speculative. The real world doesn't exist based on fucking lines drawn on a chart.
Hey look oil just hit the line I drew on a chart for a perfect 76.4% retracement, so now it is free to test previous highs just so it can then retest the previous retracement to confirm the bottom price so it can then confirm the previous high in order to breakout to new record highs.
If drawing a line on a chart tells you where the price of something should be in an uncertain future, anyone using that chart to set prices should be shot in the head.
It is insanity, but when something does not and will not trade based on fundamentals all you have left is bullshit insanity to trade with. The algos also love the bullshit because computer programs can't recognize the real world.
America is not a experiment, the 1913 Federal Reserve Bank Act was.
Kaboom.
Brent crude $57.45 and U.S. crude $53.33 A Barrel Right Now http://www.bloomberg.com/energy/
WTI will spike crude price magic by using secret currency FX basket. How do you keep your money laundry so clean? Answer.
Calgon Detergent's Ancient Chinese Secret - YouTube
The Fed needs stimulus, $40 dollar gets votes as well.
Hah, i was just thinking mark dice should do a "man on the street" video offering people money for their vote. I wonder what value the average Joe puts on his vote, my guess is much less than 40$. Point is popular democracy is bullshit.
US Media was happy to do lots of news stories about Boom Times in North Dakota and other Shale Oil patches. You know, the 21 year old chick drining a water truck for 75K a year! I wonder, what is happening in the oil patches now? I know operating capital still exists, but the hedges are now ending over the coming months. Once hedges are used up and juk bond payments come due, it all shuts down.
Now it is a waiting game for idiots who invest in tops to fold. Patience is the game now. This is when major players come in and buy a shit load of real assets for pennies on the dollar. It is the same play over and over again.
The funny money goes somewhere and it is not into jobs. It's into real assets. This is why it is damn near impossible to dethrone the top .01%. They have it all and are constantly accumulating real wealth. Which is why it will take some divine intervention and a pissed off populace who awakens from their slumber. We are talking rope and guillotines.
Look at this, a steady 12%. Insiders are demanding 18% (rolling average) spike. Watch this attempt blow up. FYI....
http://www.up.com/customers/surcharge/wti/prices/index.htm
We're going to have interesting times, just as soon as some of the CDS/CDOs start to explode. Today's market movement is but a small tremblor of what is coming. Ask yourself why Spain or Italy will not follow the Greek path . . . A lot of debt is going to have to get written down, which means banks take asset writedowns, which means banks go BK, whihc means T-R-O-U-B-L-E.
Watch crude take out the 16 year support line here, live. Expand the graph back to 1998:
http://www.investing.com/commodities/crude-oil-advanced-chart
Then look at Dr. Copper preparing to break its 12 year line here:
http://finviz.com/futures_charts.ashx?t=HG&p=m1
And then guess how far bank-boosted Basic Materials (XLB) have to fall:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=xlb&insttype=&freq=2&show=&time=20
Brent crude $57.05 and U.S. crude $52.92 A Barrel Right Now
Next I see Brent crude at $56.40 and U.S. crude at $52.46 A Barrel.Seems I called the bottom in oil with US crude round $52.46 A Barrel, at least for the moment … http://www.investing.com/commodities/crude-oil-streaming-chart
Brent crude $56.79 and U.S. crude $52.83 A Barrel Now http://www.bloomberg.com/energy
OAS and CLR puts!!!!
$40 is what my petrol engineer neighbor predicts. Low demand and excess supply.
And yet airfares remain ridiculously high! Such is the oligopoly that the airlines have become.
Piss on flying unless a loved one's life depends on it. I'm all for the airlines shutting down just to put those pervert TSA bottom feeders out of business.
Traveling by air would be a pleasure if instead of groping loosers they hire sky marshals and put a pair on every commercial aircraft. Think of the money saved and you just might be protected by someone with a possible degree of integrity.
I see that very few acknowledge the true reason for oil price collapse. The reason that was repeatedly stated by Saudis, Russians and Chinese.
All of them say this is the demand collapse stupid. And demand collapses because of rampant inequality in societies throughout the world since loosing income people, paying off the ever-increasing debt and cut the investments and expenses to the bone or desperately engage in gambling on stocks.
That's why Saudis are trying to suppress fracking not to completely lose influence on US market after they lost Chinese and Indian market to Russians and Iran as a part of trade dedollarization efforts. As far as fracking itself is concerned, the industry is extremely over-leveraged, massively loosing money as we speak regardless of any technological improvements.
We see this desperation with unsound mining practices technically maximizing production over existing rigs, shortening their longevity to pay bondholders and survive another day. As soon as interest rates normalize (if ever) or banks will not be able to sell their junk bonds, they all will go bankrupt if Saudis keep the price low and they will for their own survival. We are just waiting for all the $90 hedges to expire and that’s will be it or another massive FED bailout, this time it would be junk bond holders.
As a result of geopolitical tension between US and Russia Saudis are step by step moving towards accommodation with the eastern powers to balance Iran support by Russia and China.
Just recently number two sheik, defense minister of Saudi Arabia is in S. Petersburg, Russia talking about energy and military cooperation and perhaps purchasing weapons. It is clear political shift indicating much more independent new monarch who rebuked Obama just few weeks ago and without clearance from Washington attacked Iranian interests in Yemen. Saudis even substantially reduced purchasing of US treasuries, a historical development challenging of petrodollar.
One way or another with big oil companies abandonment of the projects, the future of the shale industry is bleak and probably will be with marginal importance in the US. Already fracking has been almost abandoned in Europe since nobody want to challenge Saudis.
Controversial but interesting take on so called shale revolution I found at:
https://sostratusworks.wordpress.com/2015/01/15/the-shale-game/
I saw a station where diesel was 3 cents cheaper than regular gas today.
I may start using the genset to air condition the house if this keeps up.