Oil’s 9 week streak comes to an end

For the past week, the price of West Texas Intermediate (WTI) Crude Oil fell 0.57%.

This ended a 9 week streak of higher weekly closing prices.

The unbroken advance saw the price of WTI Crude rise 48% from its August 2021 low.

What’s so relevant about a 9 week continuous streak in the price of Oil?

Well, it doesn’t happen that often.

So much so, there has never been a 10 week streak within the 32 years of price data that I searched through.

The time surrounding August 2002 was the only other moment when we saw a 9 week streak. 

That trend produced a 14% return.

8 week streaks have occurred four times.

The ~ December 1988 streak had a 37% return, the April 1999 streak saw a 35% advance, the February 2003 run climbed 25%, while the July 2004 trend rose 22%.

This recent streaks advance (of 48%) was indeed telling us that it was closer to concluding rather than starting. 

The next 2-3 weeks will tell us if its a pause or a reversal. 

Keep in mind, that observing and counting streaks is simply fun for statistical nerds and they don’t necessarily take into account the strength of a trend or its velocity.

Over there 32 year observation, we also saw 7 week streaks occur on 8 occasions. 

Those 7 streaks had an average performance of 18%. The highest being 33% and the lowest was a paltry 8% advance over the whole 7 week streak.

It’s wise to remember that streaks do come to an end but assessing such a ‘finale’ and whether the trend reverses or merely takes a pause involves analysing a host of different indicators.

November 1, 2021

by Rob Zdravevski

rob@karriasset.com.au

#oil