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Oil Trying To Tell Us The Future

Oil Trying To Tell Us The Future

After five days of increases in the price of crude for the June contract, oil prices declined this morning on a large negative print for the ADP Employment Index. This was despite a lower than expected build in crude oil inventories overnight.

Oil markets may be forecasting higher demand (meaning economic recovery) as they rise, albeit in fits and starts.

Equity markets seem to be locked in a trading range as optimism over the reopening of the country increases, but fears of a ‘second wave’ of Chinese coronavirus infections being pushed by the anti-Trump media make their mark. Many analysts are forecasting another correction and retest of March lows as the market climbs the proverbial ‘wall of worry’ to higher levels.

Democrats want nothing more than for the country to be locked down to cause further economic destruction as the November 2020 presidential election approaches. All you have to do is compare the actions of red state vs blue state governors to see this in stark clarity.

Stocks are also higher in the last month due to massive Fed QE which will have long-term negative consequences for inflation and the ‘full faith and credit of the United States’.

ADP Employment Index (Apr) printed at -20236k vs -20050k consensus estimate.

EIA Crude Oil Stocks Change (May 1) printed at 4.59M vs 7.759M estimate.

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