COMPLACENCY OR JUST FUNDAMENTALS??
- Greatest risk level since early 2011 to sudden spread widening due to real or perceived supply disruption/ headline risk.
- Supply/demand fundamentals continue to pressure the WTI/Brent spread lower towards the long term average of +/- $5.
- As North American production continues to increase and replace imported oil increasingly the WTI/Brent spread will reflect and be contained to Brent oil price swings.
- OPEC continues to reduce production, $90 per barrel price acceptable to OPEC and OPEC expects increase in demand from improving economies in the second half of the year. Continue reading
The rallies in gold, crude oil, and US Treasury notes and bonds are done! These investments represent the greatest risks in the markets today. I’ll leave US Treasuries for a later post.
While both crude oil and gold prices are easily subject to headline risk with the saber rattling of Iran and threats of closing the straits of Hormuz, investors should be viewing additional gains as opportunities to get out fast and look to redeploy elsewhere.
Fed’s policy did not cause gold price rise.