Crude Oil Sell Off Puts Former Best Asset Within Whisper of Bear Market


Fundamental Forecast for USOIL: Neutral

Fundamental Crude Oil Price Talking Points:

  • The ONE Thing: Multiple factors of institutional positions, falling front-month futures premium (chart below,) and building supply gluts have fundamentally shifted the outlook of the oil market toward 2018’s end.
  • A key factor of crude is seen in calendar spreads between December 2018- December 2019 futures contract flip from positive to negative, and the Contango environment looks to be a potential tipping point.
  • Crude sank rapidly this week on another US inventory build and reports of massive production boosts from OPEC that took output to the highest level since 2016 taking oil to a six month low.
  • Per BHI, U.S. total rig count fallsone rig to 1067 from 1068; US Oil rigs fell by one to 874
  • The technical picture: WTI broke through multiple support on the charts, and now calls for near-$50/bbl is coming into sharp view after we traded to $76 earlier last month.

WTI crude oil fell 13.26% over the last

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