An Outlook For Oil
The Gold and Oil Guy Chris Vermeulen joined me today to discuss his outlook for oil. Since 2015 oil has been a depressed market but the recent life now makes us consider if this was all just a multi-year basing pattern. Chris shares some target levels and a potential of a major breakout. Overall though the oil market is being ignored thanks to the continued record highs in equity markets.
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Chris,
Age old question – surely when the conventionals correct we will see everything else hit – oil, base metals, precious metals – and they will all go down together as people sell whatever they can to raise cash?
Bob, Yes in most cases that is correct and it could happen again. Couple things, depending on what triggers the next bear market will have a direct impact on how safe havens perform (metals and bonds). War, currency crisis, something). Typically commodities and metals do well for fir the first 15-25% of a bear market, then the selling (cash raising you stated takes place and can pull it down).
Thanks Chris.
I see why you are bullish commodities now.
Can any one explain why Brent is so much higher than WTI?
Brent is better quality oil.
I don’t think it is true. WTI is thinner, lighter and sweeter. Before 2008, WTI price is always higher than Brent. After 2008, Brent passed WTI but only lead by $1-2. It is the last two weeks, the lead goes up to $5-6, a huge premium. It is quite abnormal considering the percentage since Crude price is much lower, say 2014.
Excerpt
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WTI is lighter and sweeter crude with lower sulfur content; it is cheaper to refine into gasoline. A heavier oil, Brent tends to be a better candidate for the production of distillate products. “
Brent smells of lavender and roses. WTI smells of old socks.
Have actually tasted the sweetness?
Off Topic:
Clear proof there was not just one gunman on the 32 nd floor in the Las Vegas shootings.
There is photographic evidence of another gunman on the 4th floor:
https://youtu.be/0Fp3xgmQgiA