CRUDE OIL Short to Target $20.00 by Christmas 2020.
BRENT OIL 1 Week Chart, with Ichimoku Cloud.
So we all know from May this year that about $20.00 is the limit where OPEC & Russia will start holding hands and interfere with the oil price.
And you think about the below reasons, and look at the Weekly chart....
Reasons:
1. COVID - Economies around the world are NOT recovering to previous levels, LESS consumption by Industry.
2. COVID - More companies are adjusting to remote work, LESS driving, LESS gas consumption bu cars.
3. CHINA - China bought all the cheap available oil, latest prediction is that it would take 45 days just to use that stored oil
4. TANKERS - More tankers are available after they transported oil, More oil to go to floating tankers for storage
5. SAUDI ARABIA - Just had to lower its oil sale prices,
6. RUSSIA - Still eyeing a clash with Saudis
7. OPEC - Turns out UAE produced over its quotas, Iraq wants to be out of the limitations.
8. US SHALE - Some still have to produce, adding to the glut
9. AIRLINE INDUSTRY - Jet fuel consumption have never been this low, and doesn't seem it will be able to recover anytime soon.
Conclusion:
A SHORT position today ($41.35) with a STOP LOSS of $44.50, TARGET of $20.00...
And all in 15 Weeks before Christmas...
If the price breaks above $44.50, before Christmas, the trade is null.
*NOT an investment advice!*
So we all know from May this year that about $20.00 is the limit where OPEC & Russia will start holding hands and interfere with the oil price.
And you think about the below reasons, and look at the Weekly chart....
Reasons:
1. COVID - Economies around the world are NOT recovering to previous levels, LESS consumption by Industry.
2. COVID - More companies are adjusting to remote work, LESS driving, LESS gas consumption bu cars.
3. CHINA - China bought all the cheap available oil, latest prediction is that it would take 45 days just to use that stored oil
4. TANKERS - More tankers are available after they transported oil, More oil to go to floating tankers for storage
5. SAUDI ARABIA - Just had to lower its oil sale prices,
6. RUSSIA - Still eyeing a clash with Saudis
7. OPEC - Turns out UAE produced over its quotas, Iraq wants to be out of the limitations.
8. US SHALE - Some still have to produce, adding to the glut
9. AIRLINE INDUSTRY - Jet fuel consumption have never been this low, and doesn't seem it will be able to recover anytime soon.
Conclusion:
A SHORT position today ($41.35) with a STOP LOSS of $44.50, TARGET of $20.00...
And all in 15 Weeks before Christmas...
If the price breaks above $44.50, before Christmas, the trade is null.
*NOT an investment advice!*
Trade active
Trade active:
Brent Oil reached $44.17, but did not trigger our stop loss at $44.50. So we conti,nue with the trade...
Trade active:
Brent Oil is back where we started at $41.35. Assess the trade again. Lets seee what has changeds since Sep 8 when the trade was opened:
1. COVID - Economies around the world are NOT recovering to previous levels, LESS consumption by Industry. CHECK
2. COVID - More companies are adjusting to remote work, LESS driving, LESS gas consumption bu cars. CHECK
3. CHINA - China bought all the cheap available oil , latest prediction is that it would take 45 days just to use that stored oil CHECK
4. TANKERS - More tankers are available after they transported oil , More oil to go to floating tankers for storage CHECK
5. SAUDI ARABIA - Just had to lower its oil sale prices, CHECK
6. RUSSIA - Still eyeing a clash with Saudis CHECK
7. OPEC - Turns out UAE produced over its quotas, Iraq wants to be out of the limitations. CHECK
8. US SHALE - Some still have to produce, adding to the glut CHECK
9. AIRLINE INDUSTRY - Jet fuel consumption have never been this low, and doesn't seem it will be able to recover anytime soon. CHECK
So we keep the trade an Let it ride!
1. COVID - Economies around the world are NOT recovering to previous levels, LESS consumption by Industry. CHECK
2. COVID - More companies are adjusting to remote work, LESS driving, LESS gas consumption bu cars. CHECK
3. CHINA - China bought all the cheap available oil , latest prediction is that it would take 45 days just to use that stored oil CHECK
4. TANKERS - More tankers are available after they transported oil , More oil to go to floating tankers for storage CHECK
5. SAUDI ARABIA - Just had to lower its oil sale prices, CHECK
6. RUSSIA - Still eyeing a clash with Saudis CHECK
7. OPEC - Turns out UAE produced over its quotas, Iraq wants to be out of the limitations. CHECK
8. US SHALE - Some still have to produce, adding to the glut CHECK
9. AIRLINE INDUSTRY - Jet fuel consumption have never been this low, and doesn't seem it will be able to recover anytime soon. CHECK
So we keep the trade an Let it ride!
Trade closed: stop reached:
We have reached the stop-loss of $44.50 and the trade is closed.
So did anything change in our reasons:
1. COVID - Economies around the world are NOT recovering to previous levels, LESS consumption by Industry. XXXXX US Crude oil stocks actually decreased last 2 weeks
2. COVID - More companies are adjusting to remote work, LESS driving, LESS gas consumption bu cars. CHECK
3. CHINA - China bought all the cheap available oil , latest prediction is that it would take 45 days just to use that stored oil CHECK
4. TANKERS - More tankers are available after they transported oil , More oil to go to floating tankers for storage CHECK
5. SAUDI ARABIA - Just had to lower its oil sale prices, XXX SA actually increased some prices
6. RUSSIA - Still eyeing a clash with Saudis CHECK
7. OPEC - Turns out UAE produced over its quotas, Iraq wants to be out of the limitations. XXX OPEC went back to its own limits more or less
8. US SHALE - Some still have to produce, adding to the glut CHECK
9. AIRLINE INDUSTRY - Jet fuel consumption have never been this low, and doesn't seem it will be able to recover anytime soon. CHECK
So yes, and the discovery of the VACCINE and our prediction of another dip in OPEC is now invalid. Trade is closed.
So did anything change in our reasons:
1. COVID - Economies around the world are NOT recovering to previous levels, LESS consumption by Industry. XXXXX US Crude oil stocks actually decreased last 2 weeks
2. COVID - More companies are adjusting to remote work, LESS driving, LESS gas consumption bu cars. CHECK
3. CHINA - China bought all the cheap available oil , latest prediction is that it would take 45 days just to use that stored oil CHECK
4. TANKERS - More tankers are available after they transported oil , More oil to go to floating tankers for storage CHECK
5. SAUDI ARABIA - Just had to lower its oil sale prices, XXX SA actually increased some prices
6. RUSSIA - Still eyeing a clash with Saudis CHECK
7. OPEC - Turns out UAE produced over its quotas, Iraq wants to be out of the limitations. XXX OPEC went back to its own limits more or less
8. US SHALE - Some still have to produce, adding to the glut CHECK
9. AIRLINE INDUSTRY - Jet fuel consumption have never been this low, and doesn't seem it will be able to recover anytime soon. CHECK
So yes, and the discovery of the VACCINE and our prediction of another dip in OPEC is now invalid. Trade is closed.
Reasons that are given:
1. Hurricane Sally shut down 500k of US oil production in the Gulf
2. a large draw of US crude oil stockpiles (-4.4m actual vs +1.3m forecast)
Sally has oveblown so the production is starting to come online,
and although the US crude oil stockpiles were drawn, the distillate stockpiles rose (+3.5m actual vs +0.6m forcast) meaning the diesel and gas are being stockpiled and not used.
So this rise might be a temporary push by bulls. as long as price doesn't cross ove $44.50, we remain short till Christmas...