The Energy Space
Energy Price Outlook
The deja vu trade appears likely to remain in tact in the near-term, as recently attained bullish momentum was undercut in yesterday's trade. The resulting sideways trend will oscillate between moments of euphoria and doubt, which may essentially feel like a repeat of the decisive rallies and selloffs of the last few weeks which were believed to be the beginnings of new breakouts and breakdowns. Recent bullish momentum had been sparked by improved economic data in China and Europe, weakness in the dollar, accommodative Fed policy, and recent oil production declines by Saudi Arabia. Those were undercut yesterday by weak German GDP, a potential downgrade of the U.S. debt rating, and comments from EU's Juncker who said that the euro is dangerously high. The bottom line between these ups and downs is that the market has almost gone nowhere in Brent and slightly higher in WTI. Expecting that trend to continue may be the best assumption going forward. We favor holding our June WTI-Brent trade entered on Jan 4th at -$14.25 with a target at -$8.00. In the event of a selloff in WTI, we would look for a rebound after a test of the $91.50 level. We would also anticipate a shrinking of the WTI futures contango. APIs were a bit bullish yesterday afternoon....1943 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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