Trying to hear what's not being said
April 8, 2023 Leave a comment
An overbought Gold/Oil Ratio has provided 14 absolute notable buy signals in WTI Crude over the past 30 years.
It is not doing so currently.
This ratio also assists the anthesis for Gold (in USD)
April 8, 2023
by Rob Zdravevski
rob@karriasset.com.au
March 27, 2023 Leave a comment
Whilst I have been bearish on the Oil price for the past year, there was a time when I was bullish.
That was way back in June 2020. The price of Brent Crude then tripled.
The circle in the chart below shows that June 2020 period.
In this article, dated June 12, 2022 I mentioned Brent Crude trading around $37 represented an attractive entry point and that it should hold the $32 level, which it did.
Today, (3 years later) I am preparing for a moment to accumulate Oil or oil-related securities again.
March 27, 2023
by Rob Zdravevski
rob@karriasset.com.au
February 22, 2023 Leave a comment
I see the downward trend in WTI Crude Oil strengthening.
Around $66.20 is a place I’m watching and all that comes with it in 2rd and 3rd derivative effects.
February 22, 2023
by Rob Zdravevski
rob@karriasset.com.au
February 15, 2023 Leave a comment
BP’s stock price has risen 51% in the past year.
Days away from the anniversary of Russia’s invasion of Ukraine and 11 months since BP I wrote this note……
….when BP said they promise to sell their stake in Rosneft……it’s another investing lesson in separating reality and media noise from corporate spin and intent.
To my understanding, BP still owns its 19.75% stake in Rosneft and the BP recently received dividends as a result of this holding to the tune of GBP 580 million.
This is twice the amount that the UK Government has provided in humanitarian aid to the Ukraine (while its military aid has been +$2 billion).
Today, BP’s share price is “the most overbought” (on a Monthly basis) than anytime over the past 20 years.
I feel that it would be advisable if BP gets a wriggle on and keeps it promise to sell its Rosneft stake.
So far, from a capital market’s perspective, BP’s management has done a stellar job.
On a capital management front, why would you use fortuitous profits and gains to buy your own shares at these extreme highs and veil it as a ‘return to shareholders’.
Government confiscation of retained earnings (taxes) and other things come to mind for their reasoning.
But I find it a lazy decision to embark on share buybacks, such as the $2.5 billion announced in November 2022. I can see why they have decided so but there are other things they can do.
February 14, 2023
by Rob Zdravevski
rob@karriasset.com.au
January 5, 2023 Leave a comment
My call of WTI Crude Oil visiting $65 still stands.
So, WTI Crude has fallen $9 in the past 2 days.
Now, it’s trading at $73.70
But that’s just reporting the news.
Depending on the strength of the downtrend, the next stop below is ~$62 and failing that, then we may see $54.
(technical trending analysis hint: watch the ADX on the DMI)
Back when Oil was surging to $120, my writings were warning readers to not chase prices higher especially following parabolic price moves and the gravitational pull of long, long term moving averages.
To boot, the price of Oil tracks GDP, it is a large component of inflation readings….and I think that the WTI Oil price leads interest rates.
Keep in mind, that the U.S. 10 yer bond yield was recently 4.33% and now its 3.71%.
To wit, the 10 year bond yield could see 3.30%, if not 2.5% in several months, to latently mimic the Oil price.
So, I say, many had no business buying Oil at $115 nor betting that GDP will expand and the near halving of its price from those highs should be recognised as assisting the moderation of near-term inflation.
While I think $65 is possible, it’s not a time to ‘short’ Oil as such a bet is marginal. Oil may fall $10 or rise $10. Ho hum !!
The fat part of the short trade has been seen.
The preparation is for a low in Oil and then how that relates to other assets and securities.
January 5, 2023
by Rob Zdravevski
rob@karriasset.com.au
December 21, 2022 Leave a comment
The study below shows WTI Crude Oil making a notable low approximately 6 weeks after the AUD/JPY first enters weekly oversold territory.Â
Correlating the technicals in other assets helps me determine what I think may be a safer entry point, rather than relying solely on Oil price data.
Another example of this appeared in a recent post which monitors the Gold/Oil Ratio.
For now, I’d like to see WTI Crude trade down to the $65 mark.
December 21, 2022
by Rob Zdravevski
rob@karriasset.com.au
December 15, 2022 Leave a comment
Under the guise of getting the bigger calls right and continuing from the previous post…….
and for something acutely related to the Gold/Oil ratio…..
when we find the Gold/Oil ratio at overbought levels on a weekly basis, this suggests that the price of WTI Crude Oil is in buying territory.
We are potentially approaching the 14th time (over the past 30 years) that this buying signal will occur.
Keep in mind, I’m talking about the price of Oil.
Logically, oil related equities should also prosper and have the ability to deliver operational leverage, however you’d need to do the research on any specific companies numbers such as their debt, interest expenses, free cash flows, contracted or forward delivery prices etc etc.
December 15, 2022
by Rob Zdravevski
rob@karriasset.com.au
December 6, 2022 Leave a comment
The Russian invasion Ukraine has proved to be the peak in WTI Crude Oil prices.
Fairly, I’ll say for now or at least for 2022.
The long mean reversion story (being the 200 week moving average) remains valid and intact.
Oil prices remain in a downtrend from their more recent high of $122 and continued to make lower highs and lower lows.
Somewhere close to $65 is where it should take a rest and I’ll watch if the tide takes it to $52-$54.
December 6, 2022
by Rob Zdravevski
rob@karriasset.com.au
November 10, 2022 Leave a comment
Globally, we may be 6 months away from reaching the same oil rig count as seen in March 2020, for the number of rigs in action tend to decline through November – February.
The lag in deployed rigs appears in the Middle East, Africa and ESG ‘shamed’ Europe.
I don’t know why Biden is so angry at his American Oil & Gas E&P companies, for their rig count is nearly back to where they once came from.
I think that threat of his to impose a super tax of their ‘super’ profits was a mid-term election rhetorical ploy.
November 10, 2022
by Rob Zdravevski
rob@karriasset.com.au
October 25, 2022 Leave a comment
Now that RBOB Gasoline, Natural Gas, Dutch TTF Gas and the JKM LNG Marker prices have halved, I think other commodities in the energy complex are at a critical juncture.
While I remain cautious and specifically bearish on crude oil prices (I expect WTI Crude to move towards $65-$68 from its current $84.50), the larger declines could be seen in Heating Oil and Diesel (Gasoil).
They are currently trading at $3.95 and $10.82 respectively.
Both Heating Oil and Gasoil remain in downtrends across various timeframes and now I am watching a few more indicators to confirm strength and the next leg downwards.
If so, there could be 40% further downside in Heating Oil and Gasoil.
This view all seems quite perverse as the Northern Hemisphere winter approaches.
p.s. the largest use of diesel is in transportation, not electricity generators
I’ll write when/if the probability of this increases.
October 25, 2022
by Rob Zdravevski
rob@karriasset.com.au
rob zdravevski's blog 