Yet Another Plunge in Crude: Down 7 Straight Weeks and Negative from Year Ago

Crude is down nearly another 7% today. It's down 33% since the September high and 13.5% from a year ago.

Weekly West Texas Intermediate Chart

WTI Monthly Chart

Stockcharts does not have intraday prices but it does have nice looking charts. The chart shown does not have today's plunge.

There could be a bounce at any time, but technically speaking, a bounce from the $33-$40 level seems more likely.

What's Going On?

  1. The US and Russia are pumping record amounts of oil.
  2. Trump granted a number of nations exemptions on his Iran sanctions
  3. OPEC infighting
  4. Fallout from the brutal killing of a Saudi dissident journalist
  5. Slowing global economy

Mike "Mish" Shedlock

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Comments (24)
No. 1-9
Sechel
Sechel

#5 would be my #1. If the World economy were stronger it would probably sop up that excess production. When has their not been OPEC infighting. Iran wants higher quotas, Saudi Arabia has always been against it. This is not new

Jojo
Jojo

And yet gas prices in Northern Calif are holding steady, hardly declining! Most gas stations are holding stead on pricing, maybe giving a 10 or 15 cent decline over the past 6 weeks, when the decline probably should have been closer to $1/gal. Even my local Costco (since early Aug) has only dropped 30 cents (high of $3.85 premium gas to current $3.55). This is anti-trust and collusion in full view.

Bam_Man
Bam_Man

#6 - US Frackers desperately producing at maximum output to be able to make interest payments on their junk bonds - and taking a loss on every barrel. Not hard to predict how this ends.

Bam_Man
Bam_Man

It's amazing to watch the world's most crucial industrial commodity trade like a "pink sheets" penny stock.

If you like your "Casino Capitalism", you can keep your "Casino Capitalism".

Kinuachdrach
Kinuachdrach

Anyone got any advice on how to distinguish speculative pressures from supply/demand pressures?

Then there is the question about what volumes of oil are actually changing hands at these prices versus at contracted prices? There are some indications that the volume of oil actually traded on the European Brent market is quite small -- and let's not forget that the world's favorite oil company BP once paid what was then the largest fine in history for manipulating the Brent market.

And these days, one has to wonder about the shadowy Chinese project to create a strategic oil reserve. Have the Chinese stopped buying extra oil for storage?

Seems there are more questions than answers.