Followers | 689 |
Posts | 143817 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Wednesday, September 18, 2019 7:09:49 AM
By: Barron's | September 17, 2019
After the largest single-day increase in oil prices in more than a decade on Monday, crude futures fell sharply on Tuesday.
Brent crude, the international benchmark, slumped 4.6% to $64.87 in Tuesday morning trading. West Texas Intermediate futures dropped 3.8% to $59.52. Both had gained more than 14% on Monday.
A Saudi oil official told Reuters that the country was likely to fully restore production within weeks, a more optimistic timeline that some expected.
The rapid shift in prices was predictable, argued Ryan Giannotto, director of research at GraniteShares, given the enormous move on Monday and the fact that the change was based on one unusual event.
“It’s an excellent short opportunity,” Giannotto wrote in an email to Barron’s. “Markets essentially overshot on an idiosyncratic shock. Unless that shock builds, the trading pressure rapidly dissipates. It is one of the most time-honored phenomena in trading, and yesterday gave markets a once in a decade opportunity with WTI, and a once in a century opportunity with Brent.”
It’s another reminder that “markets are very bad at pricing extreme situations,” he said.
News could change the dynamic, however.
Investors aren’t sure how quickly Saudi Arabia will be able to restore oil production, but that could change soon. Saudi energy minister Prince Abdulaziz bin Salman is expected to provide an update at around 1 p.m. ET on the state of Saudi oil infrastructure. The attacks knocked out more than 5 million barrels of production capacity, or 5% of global supply.
In advance of that news conference, it’s clear that investors have gotten more bearish, particularly regarding U.S. oil stocks that rose rapidly on Monday. One of Monday’s double-digit gainers, Whiting Petroleum , was down 10% in early trading on Tuesday. Continental Resources , another big gainer, was off 9%.
Bigger, more diversified energy stocks, fell less, including Exxon Mobil (XOM) down 0.6%. The Dow Jones Industrial Average was trading flat.
Read Full Story »»»
• 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
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM