Non Inspirational

Non inspirational. The lack of convictionn and breakout has led to few opportunities Oil directionaly. The range 75-80 seems to be holding very well recently. The usually disciplined sfot opted to go against his wiser option of not getting involved until a clearer trend and it has not paid off, as he suffered what he suspects many counterparts have in so many instances, buying the highs and selling the lows. An intraday chart like below doesn't help, especially if trading breakout is what you do.



2 things of note over the past few days. 1) Total open interest is approaching the highs, as pointed out by many research houses and individual traders. Large traders are long, which normally means proces can creep up slowly, very slowly, until there are no longer any buyers, and then a big drop will follow. Will we see a scenario like this soon that will take us back into the low 70s or even mid 60s? Perhaps. However, it will be led by DXY, or equities, as expressed by the VIX. Equities futures making new highs are certainly not going to help WTI lower in the near term. Intraday trading is yet another matter.

2) Within the barrel, API came out with a set of very bearish stats. A large build in crude, gasoline and perhaps more importantly, distillate stocks. This is not going to help refining margins going forward, and certainly not the contango in products that have weakened dramatically of late. Now that the hurricane is out of the way, and experts are pointing to damages being very limited, a beraish set of product stocks will send crack levels to another new low. This time round, there may not be any hurricanes to save these margins.