Unbeknownst to you legions of stock jockeys, contango has narrowed on crude. In addition, on a technical basis it appears that the 5, 10 and 20 DMAs are in the process of being breached by current crude oil prices, which is a major development towards breaking the long term downtrend in crude oil. Those two conditions, contango narrowing and a break of the long term trend line, would set the stage for getting bullish on oil.
This, of course, flies in the face of the recent inventory numbers, that showed that supplies of crude oil rose 6.1 million barrels to 332.7 million last week, the highest since August 2007. When you add in distillate inventories rising 800k and gasoline inventories up 6.5 million barrels, inventories rose by 13.4 million barrels. Also, DOE reported that refinery operating rates declined from 85.5% to 83.3%. So, where is the bullish case, here?
However, look at oil prices today. How do you explain the rise, other than that the OPEC asshats are cutting production like a scimatar going through blocks of tofu. (Bad example, but you get the point).
That is all. I’m busy today messing around with my stupid hedges, and gold.
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