The Cryptocurrency craze that has swept the world is now being looked at by Venezuelan President Nicolas Maduro as a savior to its economy. The President helped run the Venezuelan economy in into the ground by squandering their oil revenue and now wants to mortgage his people’s future by taking its last asset, its oil reserves, the largest in the world, to back a new Venezuelan cryptocurrency. Cryptocurrencies agave has also been called the currency for murderers and drug dealers, I am just saying.
Of course, while they say it is backed by Venezuela reserves, just how does that work? Do you get a barrel of undeveloped oil every time you buy a currency? I know that you can’t base it on real production because Maduro and his cronies bankrupted the state-owned oil company and their production is taking along with their current currency the bolivar. I know that when it comes to other cryptocurrencies it is really backed by nothing but maybe that would be better than being back on fraud and deceit.
Crude is starting off getting a bit of a technical correction. A stronger dollar along with another increase in U.S. rig counts is allowing the market to pullback from resistance. Crude oil longs start the week at a 9-month high as the bullish fundamentals are very clear. Hedge funds raised their WTI net-long position—the difference between bets on a price increase and wagers on a drop—by 15% to 396,484 futures and options in the week ended Nov. 28, according to data from the U.S. Commodity Futures Trading Commission. Shorts dropped by 39%, while longs advanced 6.5% according to Bloomberg.
Our ULTRA sell number on our trade levels was one tick from the high on Friday and while we may see some early downside the trend is still strong. U.S. drillers added 2 oil rigs to 749 according to Baker Hughes bringing the total to 749. That puts oil rigs back to summer of 2015 levels, but we may not see as much oil from those rigs because many of them are drilling on less productive parcels of land.
Natural gas is higher. Winter makes an appearance and the above normal temperatures should get back to normal. Still, U.S. production is very strong.