Where to with crude?

There are simply too many geopolitical balls for curde oil (NYMEX:CLN14) in the air right now for many to keep aloft.

While we may glance at some headlines and dig into a few stories, it is difficult for many of us to know, for example, if the Iraq/Syrian borders will be in ISIL hands tomorrow. Firms like Stratfor do a great job at geopolitical analysis and we are grateful for some of their feedback.

However, to understand enough of current situation to completely understand where oil might trade, we would need to give up our day job--analytic/brokerage. We may however find some useful information by looking at some charts.
 




On June 12 the nearest to expiry July 14 crude oil future contract (CLN4) rallied above $105, a level that had not been successfully breached since September ’13. On June 12th the $2.07 advance had been the largest single session open/close advance since early December ’13.

Further, aggregate volume for crude on June 12th was higher than any since March 12th, 3 months earlier. There has in fact only been 6 instances in the last 17 months where aggregate volume exceeded the 837,000 on June 12 ; four of those instances were centered in early July ’13 – almost a year ago. Finally, the latest CFTC Commitment of Traders report shows ‘non-commercial’ accounts reaching a new record net-long level of 479,000 contracts following the latest week’s 9% addition. All of the above is offered as evidence that the advance on June 12th was significant.

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