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Now Oil Fundamentals come into line with technicals


Mercury

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For some time my technical analysis has been suggesting Oil have further to fall and the bottom has not yet been reached.  Others have talked about how Saudi managed supply will keep Oil prices stable but there are 2 issues with that theory:

 

  1. There is no evidence from the past that anyone can so manipulate oil prices and in any case the US shale producers have to keep producing to service debt and Iran will keep producing to get hard currency
  2. Global economic activity by almost any measure except government stats (or I could say politicised, cook government stats...) is falling and with it demand for commodities has fallen and continues to do so, leading the way for other markets once everyone wises up

Now there is fresh information that oil analysts are waking up to this demand side importance.  Check out the attached article.

 

http://www.zerohedge.com/news/2016-09-13/oil-slides-after-iea-turns-pessimistic-sees-oversupply-extending-dramatic-decelerati

 

For me I still see a rally to the $60 ish mark before this demand side reality hits home but in any case the long term prognosis is down to new market lows I think.

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