Brent at stretched percentages

February 14, 2022 Leave a comment

I’m studying correlation, convergence & divergence activity across a cross selection of assets.

Oil is featuring heavily in my macro work.

Below is a chart of Brent Crude which shows it touching historic peak of the percentage it is trading above its 200 week moving average.

This also coincides with a visit to a longer term resistance line.

I’ll also watch currency crosses such as AUD/JPY to help me stay on the correct side of the move.

Fundamentally, sustained higher oil prices will crimp corporate earnings and stifle GDP expansion.

February 14, 2022

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with ,

Oil about to hit a 3 1/2 year high

January 17, 2022 Leave a comment

It’s an important coming day or two in Brent Crude Oil trading.

I’m watching if it trades above $86.68.

Friday’s high was $86.52.

That means it makes a ‘higher high’ seen on October 25, 2021.

Albeit, a ‘higher high’ while also recent making a ‘lower low’ portends for an extension of the current rally, on a Daily basis, Brent is now in Overbought territory and 2 standard deviations above its mean.

Whilst the chart below is current, it has notes on it from a post on November 5th, 2021, which also shows the previous high in Brent at $86.71 from October 3, 2018.

January 17, 2021

by Rob Zdravevski

rob@karriasset.com.au

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Long Oil is crowded

October 13, 2021 Leave a comment

I’m advising clients to tune in where the noise is and where the herd is gathering.

Albeit, this is subjective and certainly more art than science, it’s important to identify the “crowded trade” and asking yourself if you are about to be the marginal buyer.

For example,

“everyone” is going Long Crude Oil, Natural/LNG Gas and Coal.

and “nobody” wants to buy Chinese equities nor Gold.

There is merit considering a contrarian result.

With Brent Crude Oil currently $83, I ask myself if it rises $20 or falls $20 from here?

In the coming months, I say it sees $63 rather $103.

October 13, 2021

by Rob Zdravevski

rob@karriasset.com.au

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Still looking for lower oil prices

July 20, 2021 Leave a comment

Brent Crude has fallen 12% since my note (3 weeks ago) called a peak.

Last night’s 6% decline (to $68.75) suggests and adds a little more strength to the downward trend.

The two links below discuss my bias for lower prices.

For now the $62 mark is a spot to watch and certain technicals over the coming weeks will help me decide if a new Long position is established there or around the $57 level.

Looking for interim peak in Crude Oil
OPEC crimping supply is curtains for the oil price

July 20, 2021

by Rob Zdravevski

rob@karriasset.com.au

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Looking for interim peak in Crude Oil

June 28, 2021 Leave a comment

Here’s a market call for you….Brent Crude is about to top out at the $78.50 level.

I’ve been bullish about the Oil price for the past year and remain so over the longer term, but parabolic advances also need a break and some consolidation.

My technical work suggests the crude oil price peaks soon and comes back to test the $64-$62 mark in the coming months.

See my 20+ year chart below. Amongst many extreme coincidences, we are also nearing a 50% move (between the 1999 low and the 2008 high) along with testing the underside of an ominous downward sloping trendline.

Anecdotally, many now are calling Oil to a $100…..and so I ask, where were they when Brent was $30 or $40….another moment of popular pundits making calls at the nutty end of a run which has seen Brent Crude Oil nearly quintuple from its $16 low in March 2020.

Ultimately, I think Oil goes to $120 – $140, in a massive ‘last’ hurrah…I’ll write more about that in a few months time.

For now, it’s time for the Oil price to shake a few people out and I love a good shakeout.

This also means having a think about your Oil & Gas equity positions.

In fact, many of them are already exhibiting weakness.

June 28, 2021

by Rob Zdravevski

rob@karriasset.com.au

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The Woodside anomaly

May 31, 2021 Leave a comment

The ‘de-correlation’ and anomaly of the Woodside Energy (WPL.AX) share price.

May 31, 2021
by Rob Zdravevski
rob@karriasset.com.au

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Oil continues marching higher

March 12, 2021 Leave a comment

My current read of the Brent Crude Oil price is….

if it closes above $70, then there is clear air to the $74-$76 region, while probability of a spurt to $80-$82 remains, such a move would swing the pendulum into extreme territory.

and then we’ll see OPEC start to increase output.

Basically, traders are waiting for a break above $70 and if they see it, then watch them pile in.

for context though, going Long Oil today (currently trading at $69.50) is a marginal bet. I see the risk/reward equation as being either $6 up or down.

After all, Brent Crude already seems stretched on various measures after having tripled from its $16 low in April 2020. Establishing a new ‘long’ position at this moment is akin to squeezing the last 10% out of a trade.

Keep in mind, that markets tend to move in the direction where they can inflict the most damage……..and a $80 oil price would hurt more (politically and commercially) than if fell to $50.

March 12, 2021

by Rob Zdravevski

rob@karriasset.com.au

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Oil at $70 in short order indeed.

March 8, 2021 Leave a comment

Brent moved $10 higher (from $60) to my mentioned target (see linked story below) of $70 within a month.

There is reasonable probability of $75 being next and $84 would make a few squirm.

https://robzdravevski.com/2021/02/09/oils-stealthy-rise-and-still-going/

March 8, 2021

by Rob Zdravevski

rob@karriasset.com.au

Filed under Finance & Investment Tagged with ,

An Oil Shock in stealth

March 4, 2021 Leave a comment

OPEC are meeting today, it could be a doozy….murmurs of supply cuts.

My question to answer what OPEC may decide is…..

what do the Saudi’s and Russia want or need ??
and what will hurt America the most ??
especially following the recent accusations made by the U.S about MBS and Biden approved missile strikes against Iranian backed militia…….

the answer is higher oil prices.

Logic suggests a nice reversion of Brent back to $53 would be sensible, equitable etc.
but without being a purposeful antagonist and we are a year on from last years March 8th stoush,

although Brent at $75 would remind many who’s in charge….

and I reiterate that inflation (meaning higher interest rates and higher government and corporate debt servicing costs) will likely come from higher prices in the energy complex and definitely not from services and consumer products.

March 4, 2021
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with , , ,

Overbought Brent

December 17, 2020 Leave a comment

Today, at $51.10, Brent Crude Oil has registered its most ‘daily’ overbought reading since January 3rd, 2020 (when it was trading at $70).

I’m still bullish on the price of Oil but its telling me to harvest a little as prices should take a pause.

December 17, 2020
by Rob Zdravevski
rob@karriasset.com.au

Filed under Finance & Investment Tagged with , ,

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