Biden wants to flood the U.S economy with its Strategic Petroleum Reserve at 1 billion barrels a day. Biggest draw in history. A one shot play for a mostly net importer of oil. Putin will hold oil at $100, China lockdown has had no effect on the oil price.
The above Chart (1) looks a little technical, but the red lines are the price supports for oil at $110, $100 and $95 with the green line above at $114 which is the price resistance. Oil is now under major selling pressure with news that President Biden will release from the Strategic Petroleum Reserve (SPR), one million barrels of oil per day. This draw from the SPR will be the largest in history since the reserves were created in 1974 after the stagflation/oil crisis of the early 70's.
A big risk, since America is mostly a net importer. Fire off this historic round to reduce the oil price, could and most likely be a temporary reprieve, with Putin's $100 price support ('put') in place, expanding all Russia's gas and oil exports to any other county in the world will have to be paid in Rubles, China has lockdown 50 million people to contain the stealth COVID strain/s and as the 2nd largest oil consumer in the world, despite a dramatic contraction in Chinese industry output, the oil price has stayed bid.
Chart 2, shows my prediction that oil will bounce off the $100 support and move up towards $103 within 5 trading days, a 2%+ swing. The gold price is also imbedded into the Chart, showing that it is trailing gold down with oil on U.S Dollar strength. Yet, for the oil price to crash, The Federal Reserve Bank would need to send rates up over 1% in a shock and awe rate increase, but as explained here in this post, they are obsessed with stock market stability, which ain't the economy.
Unfortunately the war in Ukraine wages on.
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