Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

Just when crude’s relentless rally appeared to be running out of steam, it got a fresh injection of bullish sentiment last week. ICE Brent futures and NYMEX WTI settled at fresh three- and seven-year highs on Friday. The International Energy Agency estimates a 500,000 b/d boost in global oil demand from September through Q1 2022 on fuel switching. The IEA, as well as OPEC and the US Energy Information Administration, in their closely-watched monthly market reports, upgraded global oil demand estimates for the fourth quarter of this year.Providing bulls further ammunition, Saudi Energy Minister Abdulaziz bin Salman and his UAE counterpart Suhail al-Mazrouei, participating in a panel discussion at the Russian Energy Week in Moscow, rejected the need for OPEC+ to pump more oil. “We should look way beyond the tip of our noses,” ABS said, noting that oil stocks are expected to see substantial builds in 2022.But looking squarely at the tip of their noses is exactly what the frantic buyers of crude were doing, expecting a much bigger shortfall in supply of the liquid fuel in the coming months as winter boosts electricity demand even as gas and coal shortages persist in Europe and China.President Vladimir Putin said Russia was ready to supply more gas to Europe, but hadn’t been asked to do so! Meanwhile, European leaders were preoccupied in drawing up a plan to cushion the blow of high gas and power prices on industries and consumers.We realized we haven't mentioned “Covid” in our weekly insights at least for the past couple of weeks! It doesn’t mean the pandemic is gone, of course, but it does seem to have retreated from the headlines and market chatter. If there are no more hurdles like the Delta wave this summer, the developed world and major developing economies, with their high vaccination rates, may finally step into the post-Covid era. That suggests continued recovery in mobility and oil consumption.But we still think the bullish oil narrative is discounting a major downside risk to demand – the headwinds of inflation and stubborn supply chain snarls dampening economic recovery, especially industrial activity and consumer sentiment.

Just when crude’s relentless rally appeared to be running out of steam, it got a fresh injection of bullish sentiment last week. ICE Brent futures and NYMEX WTI settled at fresh three- and seven-year highs on Friday. The International Energy Agency estimates a 500,000 b/d boost in global oil demand from September through Q1 2022 on fuel switching. The IEA, as well as OPEC and the US Energy Information Administration, in their closely-watched monthly market reports, upgraded global oil demand estimates for the fourth quarter of this year.Providing bulls further ammunition, Saudi Energy Minister Abdulaziz bin Salman and his UAE counterpart Suhail al-Mazrouei, participating in a panel discussion at the Russian Energy Week in Moscow, rejected the need for OPEC+ to pump more oil. “We should look way beyond the tip of our noses,” ABS said, noting that oil stocks are expected to see substantial builds in 2022.But looking squarely at the tip of their noses is exactly what the frantic buyers of crude were doing, expecting a much bigger shortfall in supply of the liquid fuel in the coming months as winter boosts electricity demand even as gas and coal shortages persist in Europe and China.President Vladimir Putin said Russia was ready to supply more gas to Europe, but hadn’t been asked to do so! Meanwhile, European leaders were preoccupied in drawing up a plan to cushion the blow of high gas and power prices on industries and consumers.We realized we haven't mentioned “Covid” in our weekly insights at least for the past couple of weeks! It doesn’t mean the pandemic is gone, of course, but it does seem to have retreated from the headlines and market chatter. If there are no more hurdles like the Delta wave this summer, the developed world and major developing economies, with their high vaccination rates, may finally step into the post-Covid era. That suggests continued recovery in mobility and oil consumption.But we still think the bullish oil narrative is discounting a major downside risk to demand – the headwinds of inflation and stubborn supply chain snarls dampening economic recovery, especially industrial activity and consumer sentiment. 

Weekly Oil Views: Sentiment Spurs Prices Higher Even as Fundamentals Remain Steady

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Technical Analysis

In late August Oil showed signs that a rise towards $85 could be seen. That target has effectively been met, thus encouraging a more neutral stance in the near term, especially as major levels around $87-$90 are just overheadHowever, this does not apply to the wider commodities space. Copper has rallied through key levels pointing to the trend highs again. The London Metals Exchange Index is already making new trend highs and will soon to make all-time highs.As a consequence, even though there might be some ‘relief’ in the energy space, the rise in metals prices are likely to keep any degree of inflation concerns in place.

In late August Oil showed signs that a rise towards $85 could be seen. That target has effectively been met, thus encouraging a more neutral stance in the near term, especially as major levels around $87-$90 are just overheadHowever, this does not apply to the wider commodities space. Copper has rallied through key levels pointing to the trend highs again. The London Metals Exchange Index is already making new trend highs and will soon to make all-time highs.As a consequence, even though there might be some ‘relief’ in the energy space, the rise in metals prices are likely to keep any degree of inflation concerns in place.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

WTI showing signs of a blow off rise as we are due to clear our rally PT at 81 and reach for the 84-85 projection target. The speed of the rise may also mean that a future pullback will be of an aggressive nature.For now, we like buying a dip near trendline support at 77.XLE long from 48 is gaining traction and breaking out out above the 55 resistance (a fresh long signal).We have been bullish from the 71 zone on the back of the breakout of the bull wedge formation.

WTI showing signs of a blow off rise as we are due to clear our rally PT at 81 and reach for the 84-85 projection target. The speed of the rise may also mean that a future pullback will be of an aggressive nature.For now, we like buying a dip near trendline support at 77.XLE long from 48 is gaining traction and breaking out out above the 55 resistance (a fresh long signal).We have been bullish from the 71 zone on the back of the breakout of the bull wedge formation.

Benchmark Brent futures surged to fresh three-year highs last week, with NYMEX WTI settling at levels not seen since 2014.Crude pulled back on Wednesday, after Russian President Vladimir Putin pledged to satisfy Europe’s gas needs, but bounced right back up.OPEC+ ministers meeting on Monday decided against releasing any more oil into the market than the 400,000 b/d monthly tapering already agreed. The US Department of Energy said on Thursday that it has no plans for the time being to release barrels from the SPR. We are not surprised at either of those decisions. We’ve said it before, but will say it again – this is a coal-gas-electricity crunch and throwing more oil at it would not make sense.But clearly, the parties rushing into crude-buying frenzy don’t see it that way. Could it be that oil futures are serving as a proxy for bulls seeking to profit from an expected continuation of the coal and gas shortages spiralling out of Europe and China? If so, what happens if the demand correlation does not hold in the physical markets?

Benchmark Brent futures surged to fresh three-year highs last week, with NYMEX WTI settling at levels not seen since 2014.Crude pulled back on Wednesday, after Russian President Vladimir Putin pledged to satisfy Europe’s gas needs, but bounced right back up.OPEC+ ministers meeting on Monday decided against releasing any more oil into the market than the 400,000 b/d monthly tapering already agreed. The US Department of Energy said on Thursday that it has no plans for the time being to release barrels from the SPR. We are not surprised at either of those decisions. We’ve said it before, but will say it again – this is a coal-gas-electricity crunch and throwing more oil at it would not make sense.But clearly, the parties rushing into crude-buying frenzy don’t see it that way. Could it be that oil futures are serving as a proxy for bulls seeking to profit from an expected continuation of the coal and gas shortages spiralling out of Europe and China? If so, what happens if the demand correlation does not hold in the physical markets?  

Weekly Oil Views: Crude Rally Perplexes, Riding on the Coattails of Gas Crunch

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Last week we noted that in order for us to turn bullish on the broad market, we need to see breakouts to YTD highs in small-caps (IWM), Financials (XLF), Energy (XOP), and equal-weighted Discretionary (RCD). We now have the breakout we needed in Energy (RYE, XOP), but the other areas are still consolidating. Therefore, we still see a mixed market and we remain neutral yet constructive overall.Stocks highlighted: XOP, WTI Crude Oil, IWD, IWM, S&amp;P 500, Equal-weighted Nasdaq 100 (QQEW), HLT, SEAS, DRI, PLAY, COP, EOG, PXD, OXY, DVN, CLR, CTRA, FANG, MRO, XEC, APA, AR, MUR, RRC, SWN, MTDR, PDCE, SM, BSM, CPE, VNOM, LPI, DMLP, CHX, WHD, NOA, TTI, NR, EXTN, NGS, FET, and CCLP

Last week we noted that in order for us to turn bullish on the broad market, we need to see breakouts to YTD highs in small-caps (IWM), Financials (XLF), Energy (XOP), and equal-weighted Discretionary (RCD). We now have the breakout we needed in Energy (RYE, XOP), but the other areas are still consolidating. Therefore, we still see a mixed market and we remain neutral yet constructive overall.Stocks highlighted: XOP, WTI Crude Oil, IWD, IWM, S&amp;P 500, Equal-weighted Nasdaq 100 (QQEW), HLT, SEAS, DRI, PLAY, COP, EOG, PXD, OXY, DVN, CLR, CTRA, FANG, MRO, XEC, APA, AR, MUR, RRC, SWN, MTDR, PDCE, SM, BSM, CPE, VNOM, LPI, DMLP, CHX, WHD, NOA, TTI, NR, EXTN, NGS, FET, and CCLP

Upgrading Energy To Overweight; WTI Crude Oil and XOP With Major Long-Term Breakouts

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Weekly Oil Views: Sentiment Spurs Prices Higher Even as Fundamentals Remain Steady

Natural gas and coal shortages remained the same last week, but a few political comments, rhetoric and forecasts boosted speculative buying of oil....

Vandana Hari

Oil Target Met but Metals on the Up

Brent Crude has effectively met the $85 target with major levels just overhead. While some relief may be seen here, Metals are moving up which...

Shyam Devani

WTI Blow off Rise

WTI showing signs of a blow off rise as we are due to clear our rally PT at 81 and reach for the 84-85 projection target. The speed of the rise is...

Thomas Schroeder

Weekly Oil Views: Crude Rally Perplexes, Riding on the Coattails of Gas Crunch

Crude's 13% rally over the past four weeks is riding on the coattails of the coal and gas crunch in Europe and China. Could oil be serving as a...

Vandana Hari

Upgrading Energy To Overweight; WTI Crude Oil and XOP With Major Long-Term Breakouts

Recent developments lead us to believe that Energy is likely to outperform moving forward: WTI crude oil is breaking above $77, and the RYE and XOP...

Vermilion Research

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