evening wrap

market vibes

April 30…)

“By 2020, we'll be able to live without oil.” Mohammed bin Salman, “Saudi Vision 2030” via The Wall Street Journal, 2016

Around 11:41 EST this post hit the wires: “Saudi Arabia has signaled that it is unwilling to prop up the oil market with further supply cuts and can sustain prolonged period of low oil prices, Reuters reports, citing five unidentified sources with knowledge of the matter.”

WTI opened Monday’s session at 6 PM on Sunday, April 25, at its high for the week of $63.49, popped to $63.92, and went straight down $6/barrel for 3 sessions. It doesn’t take a genius to conclude KSA knew what they were going to tell the world this morning. You can’t call foul on someone like MBS trading inside information when they themselves are the insiders.

However, it is fair warning to all who trade oil: there will be more of this, and nothing about it is new. When stabilizing forces say they are going to stop doing it, the market will become unstable. Producers are going to start trading oil, not just selling oil. It’s a trading game now, and Russia, KSA, and China know how to trade.

Wrapping up…another weird day in stocks, silver just because, a hard look at gold, bonds up again… and the chances for a cut in the vibe.