evening wrap, april 27
market vibes
Monday’s NY session crawled along at a snail’s pace as usual. WTI traded a $3.00 range. Everything else hardly traded at all. The news during the session was limited to whether or not the shooter was trying to kill Trump. Obama said, “We don’t know why he was there with guns.” I have no clue how Obama is involved but he easly got as much coverage as Trump.
I sense a new level of panic about the opposing blockades in the Strait especially from Europe. Merz gave a speech today and said the United States was being “humiliated” by Tehran’s leadership (??). He said Trump is slipping into a new Vietnam and spreading economic fallout across Europe.
As far as I can see the real war is in Washington at the Hilton. Germany is being humiliated by Putin paying 6X the rate for gas that Armenia pays… and Mr. and Mrs. Trump are entertaining Mr. and Mrs. King of England for several days.
In the absence of any developments in the Strait of Hormuz, an Iranian delegation went to Moscow for a chat. Putin is selling oil at $100/barrel thanks to Iran. No doubt he had encouraging words and a warm hug for them.
In the markets
Despite extremely low volume conditions in the markets every day, NYMEX futures hit the lowest volume in WTI since January 2, 2026 as well as the lowest open interest since January… What is technically notable is prices are stubbornly clinging to the upper $90s. Usually prices that cling to the highs imply unfilled buying below the market.
Apart from that… whenever any technical indicator seems important it should be viewed in the context of an important question: Is the market busy?
Stocks held their April gains but did not add to them. Volume was the lightest since the April 3 “deadline.” NDX futures closed with a 30 pt loss.
Gold traded the lowest volume since April 3, prior to that we’d have to go back to New Year’s Eve.
All other markets followed the leaders charted above in silent obeisance. No need to add charts of the same activity. Everyone’s P&L is mirroring activity in the Strait of Hormuz.
In oil equities today, refiners and oil majors have been unresponsive to the all-time highs in product margins. In the PM mining sector Friday’s stellar NEM earnings blowout hasn’t done anything for the precious metals mining sector.
my vibe
I did a back-of-the-envelope tally of GCC loss of supply and global (Asian) demand since the Iranian blockade today and my takeaway is the loss of supply has seen its lows. However demand is just beginning to fall and JPM thinks it has already fallen double the 2008 GFC.
I didn’t include the combined net spec long position in WTI, Brent, RBOB, heating oil and gasoil. The record high for that futures position was => 600 mm bbls. in early April… As of last Friday it was down to 513 mm bbls., still huge. I mention this because if the winds of fortune shift, these barrels are not logistically in ships at sea or onshore tanks. They are in the cloud and available at light speed.
If they were liquidated over a 4 week period it would equal an addition of 17 mm bbls per day including Sundays.
Sorry there is nothing else insightful to write about… At least I have a reason to post another masterpiece by his excellency Gary Larson….
good luck in asia!
JJ
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Charts and data CQG and Bloomberg… occasional cartoons by Gary Larson
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RIP Larson. The chickens are in fact very restless...
Can you explain ‘in the cloud and available at light speed’? Thanks!