On the heels of disappointing inventory data by the EIA, showing a build of 3.3m barrels of oil and gasoline, crude is being destroyed — now off by more than 4%.
The cynic in me says this has nothing to do with inventories, more with punishing the evil bastards in Qatar/Iran. There are happenings ongoing in the middled east, with all sort of wanton depravity taking place. We only glean into the window for a moment or two before the shutters are slammed on our long noses.
That being said, this is an abomination for stocks and will bleed into the indices.
Well, let me rephrase that. Under normal circumstances, a 4% pullback in crude, in a heavily indebted sector like oil, would have a deleterious affect on stocks. But since stocks no longer correlate to reason or economics, they’ll likely trade up a bit on the news. Crude stocks will continue to be punished. Debt to equity levels will soar. Oil credit will get smashed. But the indices will trade up, because AAPL, AMZN, NFLX, GOOGL, MSFT, FB.
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Perfect time for Trump to sell SPR. /s
He’s from the “Buy high, sell low” school? Explains a lot.
Banks likely got enough debt payments secured till Oct 17 – 04/18 when they made suppliers hedge during the spring.
There is currently no reason for oil to trade in the 50s or the 40s for that matter until Sept w/the ceremonial small bump just before July 4th.
The only response should be to buy the dip as one cannot lose buying stocks.
This market is rigged. No reason for stocks to come up like this after oil data and the Comey news.
Yes, the market is rigged and the bull will not end until the Fed gets serious about raising rates aggressively to put a stop to the stock market bubble. How can they be serious when they raise rates 1/4 point and then sit back, wringing their hands, wondering if it’s ok to raise rates in 3 or 6 months based on the “data”? For now, it’s party time! I’ll sell out in honest when the Fed gets serious.
learly too many bulls on oil which = lower oil for much longer
If there’s a glut of oil (supply increase) in peak oil demand season (now), this commodity has a LONG way to drop. In the 20s next spring? I wouldn’t be surprised.
Drill, baby, drill.
That oil chart looks ugly.