Commodity Crackles : Let's Start With Oil

I noted that oil has not suffered more than 2 consecutive quarters of losses since 2003 and we managed to pull off a first with 1Q15 seeing another drop in prices.

WTI CRUDE QUARTERLY PRICES

WTI CRUDE QUARTERLY PRICES

 

We are not hearing of anyone suffering too badly with the price rout. The simple solution has been to pump more to make up for loss revenues which is what is happening with iron ore, coal and the rest.

And while the world is running out of oil storage, the CME has come up with an ingenious solution to allow us to trade OIL STORAGE FUTURES ! http://www.theglobeandmail.com//globe-investor/cme-group-launches-unprecedented-oil-storage-futures-contract/article23678700/?cmpid=rss1&click=sf_rob

Anything to make money huh ? And we bitch that too many Chinese high school dropouts are trading stocks ?

In inflation adjusted terms, oil is not doing that badly because we are only at 2008 levels which hark back to 2004 lows.

wti inflation adjusted

BLOOMBERG WTI CRUDE OIL INFLATION ADJUSTED SPOT PRICE

 

In price terms, commodities have suffered huge price drops in the past 12 months.

GLCO CURRENCIES

Note that Gold and metals have mostly beat the EUR and JPY.

I liked the chart of oil and put on some positions yesterday after viewing the monthly chart which looks like it could finally be at a base, bearing some similarities to the pattern in 2008.

WTI MONTHLY CANDLESTICKS

WTI MONTHLY CANDLESTICKS

 

I also have an eye out for Coffee and Sugar, the 2 other commodities I am more familiar with.  But let’s just start with oil and see if we can touch $55.

 

Good luck !