Whilst the equity market saw a day of moderate consolidation chop, Oil managed a sig' gain of 2.3% into the $34s, despite another monstrous weekly surplus of 10.4 million barrels. The over supply issue has not been remotely addressed, with WTIC oil set to get stuck around mid March. Capitulation remains due in the commodity, and the broadler energy sector.
re: monthly. Having bounced from natural support of $26/25, Oil has already made a strong move to the 35s. On a break <25 this spring/summer, next level is $20, and then 16/15.
re: weekly2: a notable green candle, the first since last October. There will be STRONG resistance in the 38/40 zone.
Without question, there is yet to be capitulation in the oil/gas industry. The recent low of $26.05 is almost certainly just an intermediate low.
The real issue is not so much how low might oil reach this year, but how long might it remain there? Many now seem resigned to sub $50 oil for some years.
Yet.. how much of the industry can survive if Oil is sustainably trading in the $20s.. or even the teens?
Weekly jobs, product/costs, PMI/ISM serv', factory orders
*fed official Kaplan is on the loose in the morning.
Goodnight from London