This is the July 2019 Brent futures contract which I am working as a potential triangle in Cycle degree. Since the July 2008 peak of $148 Brent crude has never pushed higher in close to 11 years. During this time Brent crashed twice producing spectacular lows in the process.
Can Brent crude crash and make one more major bottom, or will it soar to new record highs? All the wild fundamentals would suggest higher prices, even with the tainted oil problem being worked on. One minute supplies can be choked and the next thing you know Brent crude flows.
Regardless of how any shortage may come about, the commercial traders are sitting on net long positions. With those odds going against the bears, my wave count has a slim chance of coming true.
Of course, the end of solar cycle 24 may only be 1-2 years away which has been a magnet for oil prices. The 2008 crash, “End of the solar cycle 23”, is a prime example of how fast oil crashed at that time.
The part of the world that is in sheer panic about climate change, should stop and think about what impact the sun and its cycles have on all life on earth.
My Gold/Brent ratio database goes back just 1 year with one expensive reading of a little over 15:1, today we are sitting at 17.7:1 which is still very expensive when compared to the US cash gold price.
The chart above just produced another spike to the upside so at least a correction is due. In the long run, there are no shortages of oil in the world but there sure are distribution problems, created by two wars, one war on fossil fuels and our present trade war.
The war drums may also be sounding with Iran but as I see it, President Trump will try and avoid any major conflict if he can.