Wednesday August 30, 2017
Last week prior to the landfall of Harvey, the media were certain that the price of oil would rise. Stories abounded that refineries were shutting down and amid the hurricane chaos, higher prices were certain.
We maintained that social mood would prevail. And social mood was negative towards oil prices as they had been falling for weeks.
And sure enough, oil prices fell about $1.65 on Monday as the storm raged the Gulf Coast. So what was the explanation for the exact opposite result?
Well since the refineries were not buying oil to refine, the price fell!
Again attempting to link exogenous events in pretzel like fashion is not the correct approach.
We continue to expect a low in energy prices over the next couple of months. The rebound should be impressive.
Until then the trned is down.
APA
APA appears to be headed back to the February 2016 low. Watch PMO at bottom for signs of a reversal.
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