Weekend News 19Jan

Brent-WTI spread closed at/near $16.42,
below last week’s close $16.87. The Seaway Pipeline
reversal in the US, which we have documented since last summer
herehere, and here, has created a paradigm shift in the Brent-WTI dynamic which
has begun to pick up momentum. Relative WTI strength v Brent is likely in near term.

This week’s auction developed into
a double distribution trend structure including
an upside breakout above the prior key near term
resistance level at/near 94.80s.

Reaction at this level will be of key
importance next week. IF the buyside
defends there, probability will favor
price discovery higher. Conversely, IF the
buyside fails there (false breakout), probability favors
filling in of the current distribution lower. 

Graphics

Central Banks

  • Currency War Back Again? It never left. (FT Beyond BRICs)
  • Russia Warns Of Currency War (Buys 300 Tonnes Of Gold In Last 4 Years); ECB Says Doesn’t Favor Weaker Currency. (Bloomberg)
  • Bundesbank Gold Repatriation To Have No Impact, Sayeth Analysts. (Kitco)
  • Brazil Holds Rates Steady. (FT Beyond BRICs)
  • Are The Dutch Next On The Gold Repatriation Train? (Market Update)

Geo-Politics 

  • Algerian Seige. (RT)
  • US To Provide France Airlift, Training In Mali. (RT)

Supply/Demand & Markets 

  • OPEC Expects Higher-Than-Expected Chinese Demand, 2013. (Platts)
  • IEA Monthly Oil Market Report Sees Market Tightening. (Platts)

WTI Crude: Daily TPO & Price. 17Jan

As of 730CST,
the market is balancing within yesterday’s
upper cluster (95.20s-95.90s), below 
yesterday’s Settlement, overnight inventory neutral.

Yesterday’s auction serves as an illustration of the fact that the longer term participant 
(in this case buyside) always dominates the short term
participant (in this case the sellside).

Following yesterday’s double distribution
trend structure, the upper cluster edges (95.20s-95.90s)
will be worth focus for today’s session.