Oil markets have seen a sharp rise in inflation over the years. Brent crude has been hovering near three-year highs since October 2018 at 77.25 / bbl, while WTI closed at $ 73.30 / bbl on Thursday.
The optimism behind the debt crisis is growing Chinese Evergrande Team (OTCPK: EGRNF) (OTCPK: EGRNY) can be caught at the Federal Reserve because there are no surprises. The federation recently announced its intentions, thus confirming its economic prospects. Thanks to OPEC + production discipline, oil supply is stable as supply demand continues to rise during the ongoing economic recovery.
Meanwhile, the increase in confidence is the latest in a series of EIA reports showing that US raw materials have fallen for the seventh consecutive week. According to the US Energy Information Administration, US raw materials fell from 3.5M barrels to 414M barrels last week, the lowest level since October 2018. The IAA report as a whole was very strong, and supplies will only get worse in the coming weeks due to the accumulated stocks. And filters are growing faster than oil supplies.
But another Wall Street bear warns oil bulls not to win.
as if Latest Twitter, According to Bloomberg Intelligence Senior Consumer Strategy Mike McGloney, many commodities, including crude oil, can reach high levels and be prepared for a “reversal”.
»Changes to sustainable commodities are growing, and the stock market may be the last pillar of support. The US Treasury bond is expected to bounce back in March. Copper, corn, and wood peaked in May. Crude oil is expected to recover to a record high in June, with crude oil reaching a record high in July, when crude oil cuts.»
Return to average
McGloon said commodity market pressures are important to determine which commodities are expected to be the most expensive and which are the cause of the slowdown.
Unfortunately, he says oil, copper, corn, and timber are the latter.
McGloney’s last two major defeats in the season (2018 and 2020) were the S&P 500. The relationship between 20 quarters Bloomberg Commodity Spot Directory And the S&P 500 It is currently set at 0.90, the highest reading since 1960. The top of the BI analysts’ parallel was back in 2013, after which Following the dramatic fall in oil prices in 2014, it spread to the rest of the stock market.
»Now, since 2014, there is a risk of WTI returning to normal, which means falling to $ 50 a barrel., ”Counts McGloon.
There is another mixed stimulus that McGloney is working on in oil prices – elasticity due to technological advances.
»Five years ago, a barrel cost about $ 50 a barrel, and now it costs about $ 30. As shown on our chart, the S&P 500 Ebit is on par with VV-19. If fair prices fall or revenues fall, the related commodity market is in danger of falling sharply. ” McGlon wrote.
Blueberg Intelligence is not the only technical analyst concerned about oil prices.
Last month, Standard Chartered Global Research described the current oil price cycle as “slippery” trading time.
The research design states that over the past three months, the broad design has been one of the sub-cycles for Brent to earn less than $ 68, and has since been reversed. Unfortunately for the bulls, the cycles are getting flatter and faster, and Stanford says the next move may be to the bottom.
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According to Stanford, the first sub-cycle of skiing began in late May, reaching a high of 77.84 bbl six weeks later. The next sub-cycle started on July 20 below 68 / bbl and two weeks later increased to a high of 76.38 / bbl.
On the charts, this design looks like each of the tallest and gradually declining stone slabs.
He predicted that the end of the stairwell would increase the movement of the lower part following a period of reinforcement.
According to Stanford, there is still a chance that oil markets will return to boundary conditions, and now that the rise in infrastructure, especially in the delta, will eventually break down.
Stanford researchers have strongly rejected Wall Street bullying sites that the WTI price could be 65 / bb or lower or 75 / bb or higher. According to Stanford, his courageous attitude is reflected in his knowledge.The balance is very narrow and approves of $ 80-100 / BBN.
Well, at this point we are more concerned about Fed policy.
As the federation begins to launch bond purchases as soon as November and raise interest rates in response to inflation, the dollar appears to have risen, which could be bad news for oil prices and other commodities.
By Alex Kimani to Oilprice.com
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