No support in sight….

Oil prices are just continuing its pat in the trend channel, with new lows every day. As noted earlier, there is no signals to buy, only physiological brake on rounded numbers with support, but even they are going further down.

The new trend channel is 60 – 70 or maybe even closer to 60 – 65 on Brent Crude Oil.

I think every investors ask their self, if they are going short now, than they are shortening on the bottom and a loss will be made. But looking at the graph, this is the only way or stand still until we are seeing a valuable support line with more than 5 trading days.

U.S. commercial crude oil inventories climbed by 4.9 million barrels to 446.91 million barrels last week, the EIA said on Wednesday, the highest level since December last year.

U.S. crude oil production also stayed at a record 11.7 million barrels per day.

NOTE! Brent Crude Oil front month traded low USD 60 a barrels, last time we saw statistics like this…

Power is continuing its volatile pattern and would stay volatile until new year. It’s a saying in this market, every time the electricity prices are mention in public newspapers, the market will go in the opposite direction.

Yes, prices are high, the weather forecast are dry and cold and yes, we could see very high prices this winter. But, looking at the fundamentals and ignoring CO2 as this should not have any effect in the short run, we are today in the upper scale in regards to consumption with short days and freezing cold air.

A change in the weather pattern, to more normal weather and lower consumption by the end of the year and beginning of 2019, will give lower prices. February is the joker, if you are looking at Q1-19.

I will short Nordic Electricity Power Future January 2019 at 53.50 EUR/MWh, stop loss at 54.70 EUR/MWh and first target at 50 EUR/MWh.

Crude Oil Brent January

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TickerDate OpenedEntry PriceStopTarget PriceCurrent Price
Short Nordic Power January22/1153.5054.705051.60

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– Morten T

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