The illustration suggests that whenever WTI/BRN breaks the zero barrier and becomes negative, it falls atelast to a level of - 2.
Monday, September 20, 2010
WTI_Brent Spread
The illustration suggests that whenever WTI/BRN breaks the zero barrier and becomes negative, it falls atelast to a level of - 2.
Saturday, May 29, 2010
The Week That Was
The markets opened on weak note with issues plaguing the market like
o Bank of Spain's takeover of a savings bank called Cajasur and potential merge of 4 other banks unveiled problems in the country's banking system
o Tension between North Korea and South Korea after North korea sunk a South Korean vessel killing its crew
o US dollar, Japanese yen and gold surged while stocks, euro and energies slumped.
But things changed when
o OECD upgraded its GDP growth forecasts for 2010 and 2011
o China’s commitment to Euro zone holdings
Though on Friday markets were weak as S & P downgraded Spain from its AAA rating
CRUDE OIL
After rallying to a 2-week high at 75.72, crude oil price retreated more than -$1/bbl. The front-month WTI contract ended settled at 73.97, down -0.78%, on Friday. On weekly basis, the contract surged +5.61%, halting the severe selloff since May 3. In May, WTI futures slumped -14.1%.
Crude surged on OECD GDP revision and most importantly the much awaited drawdown in Cushing stockpiles. As driving season approaches and refinery utilization inches up, it can give a fillip to Crude and WTI – Brent
Crude oil fell more than 20 % from its high. Technically if any asset class fall more than 20 % from its highs enters a Bear Market. I believe crude oil also has entered a short term bear market or the upside looks limited for the time being. So any retracement to Fibonacci levels can be a good shorts
WTI BRENT
Finally WTI- Brent spreads managed to see the positive territory
the three primary reasons were
1. Driving season which pushes the demand for gasoline in US
2. Refinery Utilization going up after their maintenance is over
3. As Euorope Crisis deepens the demand for Brent Crude may be affected which will keep it at a discount as compared to WTI crude
An illustration of cushing levels and Wti Brent Spreads
The Gasoline Demand is also looking strong for this year
o Bank of Spain's takeover of a savings bank called Cajasur and potential merge of 4 other banks unveiled problems in the country's banking system
o Tension between North Korea and South Korea after North korea sunk a South Korean vessel killing its crew
o US dollar, Japanese yen and gold surged while stocks, euro and energies slumped.
But things changed when
o OECD upgraded its GDP growth forecasts for 2010 and 2011
o China’s commitment to Euro zone holdings
Though on Friday markets were weak as S & P downgraded Spain from its AAA rating
CRUDE OIL
After rallying to a 2-week high at 75.72, crude oil price retreated more than -$1/bbl. The front-month WTI contract ended settled at 73.97, down -0.78%, on Friday. On weekly basis, the contract surged +5.61%, halting the severe selloff since May 3. In May, WTI futures slumped -14.1%.
Crude surged on OECD GDP revision and most importantly the much awaited drawdown in Cushing stockpiles. As driving season approaches and refinery utilization inches up, it can give a fillip to Crude and WTI – Brent
Crude oil fell more than 20 % from its high. Technically if any asset class fall more than 20 % from its highs enters a Bear Market. I believe crude oil also has entered a short term bear market or the upside looks limited for the time being. So any retracement to Fibonacci levels can be a good shorts
WTI BRENT
Finally WTI- Brent spreads managed to see the positive territory
the three primary reasons were
1. Driving season which pushes the demand for gasoline in US
2. Refinery Utilization going up after their maintenance is over
3. As Euorope Crisis deepens the demand for Brent Crude may be affected which will keep it at a discount as compared to WTI crude
An illustration of cushing levels and Wti Brent Spreads
The Gasoline Demand is also looking strong for this year
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