While it may not feel like it, crude is in the early phases of a new oil "super cycle." In fact, in the early stages of a super cycle it never feels like it but that is because we are laying the groundwork for supply tightness in the future.
Demand worries overshadowed a drop in crude stocks after the Energy Information Administration (EIA) seemed to suggest refiners going into maintenance and a weakening demand for gasoline helped send the market higher.
Crude oil prices led stocks lower yesterday, but today are rebounding. There’s talk of lower U.S. output, stronger than expected demand in Asia and short covering ahead of the weekly inventory reports.
Crude oil prices were under pressure after Mario Draghi magic seemed too eased off. Oh, sure, after Mario Draghi said he was disappointed with growth and the lack of inflation, oil got a bounce. Yet, when Asian and European stocks gave up the gains, oil prices falter until a headline came out about those Chinese Military ships that are moving off of the coast of Alaska.
Crude oil posted its biggest 3-day rally since 1990 and put futures back in bull market territory based on a report that U.S. oil production may be falling faster than previously reported, and OPEC is willing to talk with non-Opec oil producers to try to establish a "fair price for oil."
Catch a falling knife, put it in your pocket and save it for a rainy day. One day after commodities started the month of August getting crushed, today it seems that at least someone is willing to catch a falling knife.
Crude oil prices ended their worst month since the 2008 financial crisis after 3 events in a row knocked oil and other commodities for a loop. Those three events in order are Greece, Iran and China; and while I guess you can't call them "black swan" events, the timing of all three colliding at the same time led to the oil markets July swan song.
The Federal Reserve takes out its reference to "stabilizing oil prices" and the Saudi's are dropping hints of an oil production cut. This comes as U.S. oil production sputters and inventories falls. We may have just hit a bottom as crude oil companies quickly react and probably overreact regarding July's oil price crash.
After gold's midnight massacre it seems that the selloff is acting like a cancer across the commodity complex. The market is fearing that the person or government that sold massive quantities of gold in the middle of the night may know something the rest of us does not.