Friday, September 16, 2011

Brent soars vs. West Texas

This chart has an interesting look:
What happened at the start of the year to change a stable relationship to this? As a chart watcher, I don't really have to know but at the same time I cannot be blind to it. Energy guru Phil Flynn said the money printer in Europe shored up demand for the local brand of energy. He added, "Weak production from the North Sea and conflicting reports on the return of Libyan crude seems to be adding to the Brent woes."

Higher demand and lower supply. Hmmm. Should have paid more attention in econ 101. 

From a technical point of view, will this spread start to revert to the old mean or is it on its way to a new mean? FWIW, Flynn thinks West Texas has seen its low for the year.

1 comment:

Will said...

Doesn't the rise start with the QE2? Not that QE2 could cause commodity inflation. I would never suggest that.

-Will L.