As January Goes, So Goes The Year
Brent futures and WTI are trading at five and a half year lows. January has started weak – the year opened with Brent at about $58 and is now testing the $50 mark which is a significant market level.
Markets Can Remain Irrational Longer Than You Can Remain Solvent
We are at technical support levels but that is no reason to be a buyer just yet. If the current sell off were to match the 2008 bear market, $16 for Brent could be seen.
Buyers have previously bought Brent at $47; if this level breaks, the next significant demand zone is around $35 – $36.
Why Is The Price Of Oil Dropping?
According to the Economist, there are four things affecting Oil:
- Demand is low due to weak economic activity.
- Problems in Iraq and Iran have not impacted their output.
- America is now the worlds largest oil producer.
- Production has not been cut by the Gulf producers.
SparkProfit’s Sentiment Indicator Remains Strongly Bearish
The sentiment indicator generated by the thousands of players around the world playing SparkProfit is at bearish extremes and has mostly been negative about Oil since September.