For the week of June 27, 2011
Crude Oil had a huge week as President Obama ordered millions of barrels unleashed into the open market sending the price of WTI below $89 at one point. The news happened very suddenly and very fast as crude dropped from $95 to $94 in afterhours trading, then dipped below $90 that same day as the oil markets are whipping around. The huge news has been the drop in the Brent flatprice as Aug Brent now trades below $105 looking to test $100. The arbs have really rallied of late with the Aug arb now above $14 after being as low as $21. The Brent spreads have also played a major role in the liquidation as they have moved significantly lower in the last few trading days. The Z/Z Brent, which had been +225 just last week, has fallen more than -$3 to now trades at -100. This move has been colossal and the whole market has had a tough time reacting to this. It’s been like the flood gates have opened up and everyone is selling Brent spreads. Look for the selling to continue on this week as boxes get stronger coming back from their lows. Crude has now seen a low of $89.70 twice now. This is a very huge support level and if this gets broken the market could see lower lows as the sell off continues. I will look for $89.70 to be pivotal price in the coming week ahead.
***chart courtesy
Gecko Software’s Track n’ Trade ProPast performance is not necessarily indicative of future results.
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