Crude crack spreads and calendar spread suggest more upside
Chart A: (this text magically disappears from the chart when publishing so I put it here)
Strength (higher high) shown in December crude =>
Likelihood that oil is headed higher
note: June contract has not put in a higher high at this point,
but December is taken to be more important since it's further
into the future and future price is what we're trying to predict.
Summary:
Gasoline and heating oil crack spreads suggest crude outperforming gasoline and heating oil in near future.
Gasoline and heating oil look strong and likely won't move or will head higher.
Crude oil will have to rise to outperform them while they stand still or rise.
December crude contract likely to outperform June contract while both are heading up.
Additional bullish notes on today's EIA report:
1. Crude oil stocks (Including SPR) are the lowest they've been since 2008
2. production is down for all products yoy except for jet fuel
Appendix: I’ve pasted all chart descriptions here in case there are problems with the chart textboxes which there likely will be because Tradingview chart textboxes don’t publish well.
Chart B:
1:1 gasoline crack spread
suggests narrowing of spread in near future =>
crude outperforming gasoline
Chart C:
Heating oil crack spread
suggests the same thing =>
crude outperforming heating oil
Chart D:
December gasoline strength (higher high) =>
likelihood that gasoline is headed higher
Chart E:
December heating oil strength (higher high) =>
likelihood that heating oil is headed higher
Chart F:
Narrowing spread between June and December crude =>
December outperforming June in near future
Strength (higher high) shown in December crude =>
Likelihood that oil is headed higher
note: June contract has not put in a higher high at this point,
but December is taken to be more important since it's further
into the future and future price is what we're trying to predict.
Summary:
Gasoline and heating oil crack spreads suggest crude outperforming gasoline and heating oil in near future.
Gasoline and heating oil look strong and likely won't move or will head higher.
Crude oil will have to rise to outperform them while they stand still or rise.
December crude contract likely to outperform June contract while both are heading up.
Additional bullish notes on today's EIA report:
1. Crude oil stocks (Including SPR) are the lowest they've been since 2008
2. production is down for all products yoy except for jet fuel
Appendix: I’ve pasted all chart descriptions here in case there are problems with the chart textboxes which there likely will be because Tradingview chart textboxes don’t publish well.
Chart B:
1:1 gasoline crack spread
suggests narrowing of spread in near future =>
crude outperforming gasoline
Chart C:
Heating oil crack spread
suggests the same thing =>
crude outperforming heating oil
Chart D:
December gasoline strength (higher high) =>
likelihood that gasoline is headed higher
Chart E:
December heating oil strength (higher high) =>
likelihood that heating oil is headed higher
Chart F:
Narrowing spread between June and December crude =>
December outperforming June in near future
Order cancelled:
I'm second guessing this analysis based on the production numbers that came out this week. Refinery products production is down year over year and crude production is up. The crack spreads may continue to increase rather than decrease back to more recent values. It was a good exercise but I probably bit off more than I could chew with this analysis. I've switched to bearish on crude in the short term due to technical reasons.