Quick Thoughts On Oil’s ‘Red Friday’
Earlier this week, I wrote that for something that's ostensibly driven by relatively straightforward supply/demand dynamics, forecasting oil prices isn't usually very straightforward.
Even if you master the fundamental drivers and understand the impact of hedging, speculation and the potential for certain investor types (e.g., CTAs) to exaggerate directional moves, you also have to take account of geopolitics.
This week ended up being a crash course (figuratively and literally) in the perils o
While I understand and appreciate your sense that market action is not strongly linked to fundamentals, a 4 mbd decline in demand represents about 4% on a global basis. A ten buck decline in price does not seem like a sensible, fundamental response to that level of prospective decline.
Depends on supply curve elasticity.
In these times of great market noise, I try to focus on price action and contrary thinking…Mr. Market is not a free agent- the fed has temporarily stopped that.