Category: Commodities

Freeport McMoRan Is A Buy (FCX)

If you follow these two rules, you will never have a losing trade. First? Buy low. Second? Sell high. Sounds easy, right? Well, here we are, hovering at nearly 5 year lows and after a long and bumpy ride, precious metal investors want to know, “Are we there yet?” Continue reading “Freeport McMoRan Is A Buy (FCX)”

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Russia cant stop the oil

Due to weather and geological conditions in the cold Russian winter, Russia cannot cut its oil production too quickly, Energy Minister Alexander Novak said on Thursday, reiterating Moscow’s commitment to stick to the new OPEC+ deal and to gradually reduce production according to Bloomberg. Continue reading “Russia cant stop the oil”

Crude Oil Still Has Legs?

WTI has dropped and jumped since last night’s surprisingly small crude draw and major product builds from API, but remains around the $52 level ahead of DOE data this morning.

“The Chinese are throwing everything they can” at their economy, said John Kilduff, founding partner at hedge fund Again Capital LLC.

“That’s the big key to oil markets, especially when you have OPEC and Russia starting to rein in production.”

Saudi Arabia’s energy minister said he was sure inventories will start to “return to normal averages and this will increase confidence” in the market.

API

  • Crude -560k (-2.5mm exp)
  • Cushing -796k – biggest draw since Sept 2018
  • Gasoline +5.99mm
  • Distillates +3.214mm

DOE

  • Crude -2.683mm (-2.5mm exp)
  • Cushing -743k – biggest draw since Sept 2018
  • Gasoline +7.503mm
  • Distillates +2.967mm

For the 3rd week in a row, gasoline (and distillates) inventories soared. However, crude stockpiles slipped slightly more than expected and Cushing inventories dipped most since Sept 2018. With the backing of the Chinese liquidity injection the global demand should rise for the next few quarters.

Below chart using FIB Retracements shows there is a floor at $50.50 and this rally has legs until the $55-56 area. The algos will most likely interpret this as a positive number.