To have a more complete picture of the current situation in the oil market, we take a look at the charts from different time perspectives. Additionally, we explore how it relates to oil stocks and the oil-gold link.
While Ben Bernanke is still talking about tapering, he made it clear that his plans on tapering are not on a preset course. Oil as well is not on a preset course but at some point soon we should see oil drop about $10.
The oil complex is drifting lower after a mixed API inventory report and ahead of the more widely followed EIA inventory report as participants also await U.S. Fed Chairman Bernanke’s comments before Congress today.
The overall fundamental picture has not changed this week with oil stocks in the U.S. at the highest level in more than 25 years. Simply put, oil is well supplied with supply still outstripping demand.
Why all this interest in the long side of natural gas? Because the hedge funds realize that we are crossing that historic turning point in this market where demand growth expectations will start to outstrip production increases.