The Dollar And Oil
Todd Sullivan | Sep 17, 2017 01:23AM ET
The USD has continued to fall without an immediate response from WTI. This is not unusual. Although the inverse pattern is fairly strong, it is not a lock-step daily pattern. There has been confusion with Harvey’s and Irma’s impact on production/consumption. We should see a sharp rise in WTI the next month if the algorithms reassert themselves.
There were disruptions across the system. We saw production declines, crude inventories build, gasoline inventories drop by record levels, a drop in exports, a drop in refining and top it off the EIA has dropped its over-supply forecast by 30%. Harold Hamm indicates the forecasted supply remains decently higher than that of industry insiders and another 20%-25% reduction in excess supply estimates should occur.
I remain surprised that the EIA and API forecasts, on which traders rely, are always backwards-adjusted and few seem to pay much attention.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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