So last week didn’t go so well for anyone who was bullish on commodities.
The limit-down metals madness conspired with uninspiring (word-play alert) EIA data and comments from Saudi Deputy Crown Prince Mohammed bin Salman to push crude lower for a third straight week, with Brent closing below $50 for the first time since November.
We got a bit of a rebound on Friday, but it didn’t matter.
“What we’ve seen in terms of the rebound today is really just a bit of a correction following an oversold market over the past several days,” RBC’s Michael Tran told Bloomberg. “The faith in the OPEC and non-OPEC deal has just been obliterated,” John Kilduff, a partner at Again Capital LLC, added.
With oil market vol leaping to the highest level since December, CFTC data out Friday showed specs had cut their position to the least net long since November 29 (i.e. before the production cuts):
Of course that only captures data through Tuesday, which means it missed the flash crash.
“Given how the cut-off was Tuesday, I would suggest the longs are very likely to be much lower in actuality than what we saw with the CFTC data,” the above-mentioned Michael Tran noted.
Ok, so needless to say, this didn’t bode well for Gulf stocks. Indeed things got off to a decidedly rough start on Sunday, with Dubai leading the losses:
Ultimately, it was a bloodbath. Here’s the one-day for Saudi stocks:
And the 3-day is even worse:
But the bottom really fell out for Kuwait’s main stock index, which plunged nearly 3%:
Here’s the 3-day on that:
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“Do you see what happens Larry?!”
“Do you see what happens when no one is buying the ‘production cut will balance the market’ bullshit anymore?!”
[Charts: BBG]
So what you’re saying is, buy the dip?