The ‘Skiming Stones’ pattern shows that Wall Street is wrong about oil

About a week ago, President Joe Biden arrived at the OPEC to take an unusual step, urging the cartel to increase its oil production. Although more so-called gas prices could have a major impact on American psychology and jeopardize the future political aspirations of Democrats, they feel that high oil prices will hinder economic recovery during a continuing pandemic. .

Well, thanks to OPEC’s unique “sliding stones” cycle in the oil markets, it seems to be able to deliver on its promise.

For the sixth day in a row on Thursday, WTI and Brent were down 63.23 / bbl and $ 66.19 / bbl, the lowest since May, due to an increase in COVID-19 delta variance due to fears of weakening demand and arrogant US dollar and U.S. oil. Sudden increase in generators.

Standard Chartered Global Research describes the current oil price cycle as “slippery” trading time.

The extensive design of the research uniform over the past three months is one of the sub-cycles for Brent below 68 / bbl.

Reverse. Unfortunately for the bulls, the cycles are getting flatter and faster, and Stanford says the next move may be to the bottom.

Skiing cycle

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 at a high of $ 76.38 / bbl.

The latest and most recent sub-cycle, which started on August 9, reached a maximum of $ 71.90, just three days later.

On the charts, this design looks like each of the tallest and gradually declining stone slabs.

He predicted that the end of the Stanchal sliding stone stage would include a time

Strengthen, then move to the lower side.

According to the research firm, Brent’s crude oil trade, which began on July 2, had no limits. The lowest day of the day is recorded as the lowest day of the day. In fact, only three such days were recorded in the previous 4-month stretch, which is in stark contrast to the more volatile trading period from late March to early April, when there were seven internal days in 17 trading days.

According to Stanchart, while oil markets are likely to return to boundary conditions, the current pressure on infrastructure, especially the delta, will eventually lead to a breakdown.

Wall Street is wrong

Recently, despite the epidemic and short-term interest, we have reported that oil prices continue to rise sharply on Wall Street.

Indeed, Goldman Sachs During the summer, oil prices dropped to $ 75 a barrel, compared to the previous estimate of $ 80. Bank of America Commodity strategist Francisco Blanch says the world will see a barrel of oil at $ 100 a barrel in 2022 as the world begins to experience oil shortages.

Related: JP Morgan: Don’t expect a ‘shocking’ transition in energy markets

However, Stanford researchers insist that Brent’s price could be $ 65 / bb or less, or $ 75 / bb or more. According to Stanford, his courageous attitude is reflected in his knowledge.He already has a large amount of money

He entered the market in the faith of Wall Street (they were mistaken in our opinion)

Analysis) The scales are very strict and approve $ 80-100 / BBN.

At this point, we recommend that the bulls be angered, not because of the fundamentals of the oil market, but because of the rising Brazilian dollar and this market is largely driven by binary risk trading. .

The dollar has recently reached an all-time high for oil prices, including oil, due to a sharp rise in demand. The strength of the dollar reaffirmed following the release of weak U.S. retail data, which won the deal. However, with the federal federation expected to launch its transformation program in September, the green is winning over its international peers, attracting support from China and the world economy, which has unimaginable implications for the world economy.

Source – Investing.com

By Alex Kimani to Oilprice.com

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