FxWirePro

Is crude’s bear run worse than 2009 recessionary cycle?

NYMEX:CL1!   LIGHT CRUDE OIL FUTURES
487 3 5
a year ago
After having a look upon long term charts, a suspicion arrives in our brains.

Can the prevailing bear run surpass the least prices ever in recent history...? this question would take us to absolutely 11.5 years back (which was before April fool's day in 2004 at 33.20 or below).

Answer is here, technically the conviction at $35 or below would be a deciding factor. Well again..we are not being stubborn, neither in love with number 35. We've observed the multi-year charts and coupled these outcomes with below significant fundamentals.

After reading we're pretty sure that you would certainly be able to answer correctly.

Briefing on what has been happened with bear run so far:

Commodities are experiencing what has already been the second-deepest and longest bear market of the past 45 years, with a decline from their peak of over 55% over the past 4.5 years.

Only the post-Lehman plunge was steeper (61% peak-to-trough), and only the 1981-86 one longer (5.5 years).

The bear market in commodity currencies has likewise been the second-worst of the post-Bretton Woods era, topped only by the early 1980s rout powered by the 1983-84 Fed tightening cycle.

From their 2011 peak, four commodities have depreciated at least 50% currencies (ARS, BRL             , RUB, ZAR             ), and five others are down about 30% ( NOK             , AUD, COP, CLP             , MYR             ).

Where is the stoppage supply glut: The global oil             supply growth of only 0.3 million barrels per day in 2016 as US crude output falls from a mid-2015 peak of 9.6mbd to 8.8mbd due to record declines in capex (about -25% in 2015 and in 2016). OPEC supply growth should slow from about +1.2mbd in 2015 to +0.8mbd.

The Brent forecast shows a gradual rise over the next four quarters -$48 in Q1, $52 in Q2, $57 in Q3, $62 in Q4 -to reflect tighter balances from slower output growth rather than meaningful demand increases.

Thanks to almighty, among the entire commodity baskets crude oil             is the only sector where sufficient supply adjustment is underway to lift prices in 2016.

Hence, our bearish stance likely to persist and $35 is pretty much certain, we want to play it safe and can only smell some bullish attributes after late December. But for now jumping the guns is absurd as the above fundamental developments are yet to factor in gradually in long run contemplating crystal clear confirmation.

We stand pat with our recent hedging stances given in below links, good luck:

http://www.econotimes.com/FxWirePro-WTI-crude-may-head-towards-deep-tunnel-Aggressive-bears-can-stay-hedged-with-ITM-delta-puts-128603

http://www.econotimes.com/FxWirePro-No-surprise-on-crudes-tumble-to-39-trajectories-OPEC-leads-to-price-war-ahead-%E2%80%93-stayed-hedged-with-32-spreads-127004
a year ago
Trade closed: target reached: Covering shorts and booking profits is what you have to do now, rest all is history now.!! Cheers
Excellent post, thank you
Reply
Victor.Y.F
a year ago
Thank you for your post. Can you add Iran’s products in 2016 which OPEC said they don’t have any limits already?
Reply
FxWirePro Victor.Y.F
a year ago
@ Victor Y.F: What if answer is yes.. We would perhaps account it but that is least likely impact dramatically but most likely to nullify with US shale/wti crisis..

Furthermore, other macro aspects cannot be disregarded like chinese recovery in 2016, the tenor of recessionary cycle and EMs demand for oil etc etc... What do you think did US lift off economic sanctions on Iran without any vested interest..? (who knows forecasts help to certain extent, but time is the deciding factor ultimately).
+1 Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out