Time to sell crude oil?
Simple thesis here.
1) The world’s economic growth is clearly slowing as evidenced by the last 12 months manufacturing index results.
Just look at the trend of the GDP forecasts below…simply a constant series of downgrades.
2) Supply increasing – This little titbit from The Gartman Letter showing how over time market prices dictate outcomes. That is, the old adage that “the cure for high prices is high prices” in as much as high prices ultimately stimulate increased production which in turn brings down prices.
Looking directly at the Crude chart there is the suggestion that Crude prices are beginning to roll over from the classic Fibo retracement of 61.8% of the last down move.
Putting all of the above together the suggestion would be that slowing global demand combined with increased global production has the potential to send crude prices much lower.