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Tuesday, May 10, 2016 7:41:42 AM
Almanac Trader: Crude’s rally running on seasonal fumes
* May 9, 2016
Over the past 31 years (solid green line), crude oil has generally enjoyed a solid seasonal rally from late-January or February until the end of September. This rally was the result of refiners ramping up production of gasoline in anticipation of the summer driving season in the U.S. The rally would propel crude oil briskly higher until about May or so and then actual driving demand would usually pull crude higher during the summer months at a slower pace. The annual high would be reached when refiners struggled to meet gasoline demand while trying to build heating oil inventories in late summer and early fall.
However, in the more recent 11- and 5-year timeframes (orange & red lines respectively) the pattern has shifted. The U.S. auto fleet is becoming increasingly more fuel efficient and crude oil supplies have been more than ample which has resulted in bloated inventories and a briefer seasonally favorable period. Over the past 11 years, crude oil price on average as peaked in June or July and over the last 5 years the average peak has been in early May. Based upon the 5-Year Seasonal Pattern, the bulk of crude’s gains are likely over. Crude is not likely to collapse like in recent years. Instead a trading range from $38 to $46 per barrel is more likely. At least until demand catches up with excess supply or the U.S. dollar weakens further.
http://jeffhirsch.tumblr.com/post/144114180538/crudes-rally-running-on-seasonal-fumes
• DiscoverGold.
* May 9, 2016
Over the past 31 years (solid green line), crude oil has generally enjoyed a solid seasonal rally from late-January or February until the end of September. This rally was the result of refiners ramping up production of gasoline in anticipation of the summer driving season in the U.S. The rally would propel crude oil briskly higher until about May or so and then actual driving demand would usually pull crude higher during the summer months at a slower pace. The annual high would be reached when refiners struggled to meet gasoline demand while trying to build heating oil inventories in late summer and early fall.
However, in the more recent 11- and 5-year timeframes (orange & red lines respectively) the pattern has shifted. The U.S. auto fleet is becoming increasingly more fuel efficient and crude oil supplies have been more than ample which has resulted in bloated inventories and a briefer seasonally favorable period. Over the past 11 years, crude oil price on average as peaked in June or July and over the last 5 years the average peak has been in early May. Based upon the 5-Year Seasonal Pattern, the bulk of crude’s gains are likely over. Crude is not likely to collapse like in recent years. Instead a trading range from $38 to $46 per barrel is more likely. At least until demand catches up with excess supply or the U.S. dollar weakens further.
http://jeffhirsch.tumblr.com/post/144114180538/crudes-rally-running-on-seasonal-fumes
• DiscoverGold.
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
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