Overseas markets have continued to melt down unabated for weeks now. The Yen carry trade is dead and anyone caught in it has been trapped. And now numbers coming out of Europe continue to reinforce sustained recession with no exit strategy in sight.
The million barrel oil drawdown was confirmed by the Energy Department, which has so far kept crude prices elevated. But the summer demand will continue to slump shortly, reversing the pricing and exacerbating melancholy market sentiment into depression.
Oil futures are solidly in backwardation. Demand is slacking, as indicated by the ISM numbers and European country statistics. Throw on top of it all the energy revolution taking place in North America, and this summer sometime we’ll see a hemorrhage.
For the moment, I’m taking it two ways, as my long sell off and my “hedges” lose me money every single day. But EUO and SCO will prevail, into a summer selloff. I’ve been here before.
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