INVESTOR SERIES
With a 9.1% rise in consumer prices in June that beat economist’s predictions; Oil futures pulled back below $100 late last week however crude traders are paying the most since 2008 to get hold of any oil right now. The futures market will need address the physical market this week.
Brent crude pricing last week – The global benchmark Brent crude fell below $100 late last week, registering its 5th straight weekly loss and longest streak of losses this year
The recessionary economic outlook is driving pricing not production.
For the last 5 weeks Traders were selling oil on the expectation that demand was going to drop. Meanwhile, in the physical market, where traders buy and sell actual cargoes of oil, Forties, a grade of North Sea crude that underpins the Brent global oil price, was quoted at its highest premium to the benchmark this week since 2008.
Opportunity as the physical market is not aligned with the futures market
If physical crude oil prices stay high, then eventually the market will find the flaw in the bear case for oil futures.
