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

OPEC+ last week agreed to stay the course on its cautious tapering plan of 400,000 b/d monthly supply boost for October, as expected. It was wise to not suspend the easing as the Delta wave is in the rear-view mirror and the world can do without higher oil prices feeding the inflation monster. Yes, there is still the risk of more nasty variants bringing new waves – the WHO is keeping a close eye on the “Mu” strain of the coronavirus, first identified in Colombia and currently found in 39 countries. But make no mistake – OPEC+ has left a wide margin between its planned production and its projected rise in global demand in the coming months, which, interestingly, it has not downgraded despite the Delta wave. OPEC+ adopting the hawkish approach and sustaining its cohesion are supportive for oil price sentiment. So is the fact that the Delta wave did not knock US oil demand recovery off its trajectory and China is gradually recovering its oil appetite with the Delta outbreaks in the country squashed and restrictions being eased. However, the pain points in the global economy are becoming obvious. Major among them is the services sector not picking up momentum even as the manufacturing sector is losing it and consumer confidence is starting to wobble.The observations confirm our mildly bullish outlook for the near-term and neutral for the next three months, as laid out in our August issue of Bulls &amp; Bears.

OPEC+ last week agreed to stay the course on its cautious tapering plan of 400,000 b/d monthly supply boost for October, as expected. It was wise to not suspend the easing as the Delta wave is in the rear-view mirror and the world can do without higher oil prices feeding the inflation monster. Yes, there is still the risk of more nasty variants bringing new waves – the WHO is keeping a close eye on the “Mu” strain of the coronavirus, first identified in Colombia and currently found in 39 countries. But make no mistake – OPEC+ has left a wide margin between its planned production and its projected rise in global demand in the coming months, which, interestingly, it has not downgraded despite the Delta wave. OPEC+ adopting the hawkish approach and sustaining its cohesion are supportive for oil price sentiment. So is the fact that the Delta wave did not knock US oil demand recovery off its trajectory and China is gradually recovering its oil appetite with the Delta outbreaks in the country squashed and restrictions being eased. However, the pain points in the global economy are becoming obvious. Major among them is the services sector not picking up momentum even as the manufacturing sector is losing it and consumer confidence is starting to wobble.The observations confirm our mildly bullish outlook for the near-term and neutral for the next three months, as laid out in our August issue of Bulls &amp; Bears.

Weekly Oil Views: Crude Confronts Economic Headwinds in Wake of Delta

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.

Technical Analysis

Market conditions have started to improve, and the bottom line is that all Sectors and major indexes remain above critical supports. The absence of breakdowns continues to support our overall constructive outlook, and we are watching the 10-year Treasury yield, small-caps (IWM), Financials (XLF), and Industrials (XLI) closely for signs that a new broad-based rally is upon us.

Market conditions have started to improve, and the bottom line is that all Sectors and major indexes remain above critical supports. The absence of breakdowns continues to support our overall constructive outlook, and we are watching the 10-year Treasury yield, small-caps (IWM), Financials (XLF), and Industrials (XLI) closely for signs that a new broad-based rally is upon us.

U.S. Equity Strategy: Conditions Improving; Watching Cyclicals, 10-Yr Yield. Buying Casinos, Semis

Our latest monthly checklist of bullish and bearish influences on the oil markets, with their relative weights and the result of their interplay, concludes:<ul>
<li>A mildly bullish outlook for the near-term</li>
<li>A neutral outlook for the next three months</li>
</ul>Read on for details on how we arrived at these views and what they translate to in terms of benchmark crude prices.

Our latest monthly checklist of bullish and bearish influences on the oil markets, with their relative weights and the result of their interplay, concludes:
A mildly bullish outlook for the near-term
A neutral outlook for the next three months
Read on for details on how we arrived at these views and what they translate to in terms of benchmark crude prices. 

Vanda Insights Bulls & Bears: Near- And Short-Term View on Oil Prices

Wisdomtree Japan Hedged Eq / Technical Analysis

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Market dynamics continue to send mixed signals, but the bottom line is that not one MSCI ACWI Sector is breaking down, and important price support levels are holding in the US, Europe, and Japan. Additionally, the MSCI ACWI, ACWI ex-US, and EAFE indexes all remain above critical support levels. Until supports start to break we cannot be bearish. It is also worth noting that various indicators could be making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a potential false breakdown in crude oil, and high yield spreads leveling-out.

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

Commodities are on the rise again with the clearest sign coming from Oil which posted a strong bullish weekly reversal and is expected to go back to the highs. US breakevens have also rebounded and further gains along with commodities are likely to unfold.The expectations of US data points remain high which is keeping a lid on US nominal yields in the short term.Combining the above, lower negative real yields in the US should be seen in the short term just as we saw in late July when Oil rallied from similar levels. This mix is undoubtedly helping precious metals. The month end’s closing price on Gold is the next important development to watch, especially if we close above $1,834. Silver is also on the up towards $25. In the end the USD remains on the back foot.

Commodities are on the rise again with the clearest sign coming from Oil which posted a strong bullish weekly reversal and is expected to go back to the highs. US breakevens have also rebounded and further gains along with commodities are likely to unfold.The expectations of US data points remain high which is keeping a lid on US nominal yields in the short term.Combining the above, lower negative real yields in the US should be seen in the short term just as we saw in late July when Oil rallied from similar levels. This mix is undoubtedly helping precious metals. The month end’s closing price on Gold is the next important development to watch, especially if we close above $1,834. Silver is also on the up towards $25. In the end the USD remains on the back foot. 

Lower Real Yields with Higher Oil Supports Gold

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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Crude Oil (CL1 COM COMDTY)

Weekly Oil Views: Crude Confronts Economic Headwinds in Wake of Delta

OPEC+ is hawkish, US oil demand growth remains strong and China is emerging from its Covid outbreaks -- all supportive. But economic deceleration...

Vandana Hari

U.S. Equity Strategy: Conditions Improving; Watching Cyclicals, 10-Yr Yield. Buying Casinos, Semis

We are watching the 10-year Treasury yield, small-caps (IWM), Financials (XLF), and Industrials (XLI) closely for signs that a new broad-based...

Vermilion Research

Vanda Insights Bulls & Bears: Near- And Short-Term View on Oil Prices

Crude was hammered by the Delta wave and a taper tantrum in the wider financial markets in August. Our view on prices is mildly bullish in the near...

Vandana Hari

Critical Supports Holding in the US, Europe, & Japan; Buying Health Care, Utilities, Materials, Tech

Various indicators are making a turn for the better, including early signs of interest rates bottoming in the US and Germany, a false breakdown in...

Vermilion Research

Lower Real Yields with Higher Oil Supports Gold

The bullish reversal in Oil combined with lower nominal yields gives rise to trends that were seen in late July. Lower 'real' yields, higher Gold...

Shyam Devani

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