Given crude oil’s parabolic rise (+46%) from mid April through mid June, we think it quite telling that the rash of recent headlines has yet to spur the market towards the magical $75 level that all of those Wall Street types like to tout.
These headlines include:
- Extant fallout from the Iranian elections
- Stepped up attacks by rebels against Nigeria’s oil infrastructure
- U.S. dollar down 1½%
- Passage in the U.S. House of H.R. 2454, better known as the American Clean Energy and Security Act of 2009 or the Waxman-Markey bill
Given the technical rapidity which got this market to the doorstep of $75, here at The Schork Reportwe think it is interesting that not one of these headlines – let alone all of them combined – has thus far been able to propel WTI over this critical point of reference.
Why is that? These are real events, not euphemisms (less bad is good, green shoots… and so on). Thus, whereas the fact that only 345,000 Americans lost there jobs in May was received with a certain degree of glee, unrest on the scale not seen since Iran’s Islamic Revolution inside a country that sits atop 1 out 10 barrels of reserves has not even mustered a yawn from the bulls.
Last week The Schork Reportchanged our short-term (daily) technical bias in the liquids to bearish, and although it has been somewhat of a rollercoaster, our bearish confidence is growing. In this vein, we will still have to hold a bullish bias in our mid-term (weekly) bias based on the technicals, but given the recent bullish news/middling action we have seen, our intermediate bearish bias is gaining legs.
Stephen Schork is the Editor of, "The Schork Report"and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.