Market Currents
The weakness in the oil market is a warning, says Josh Brown. He sees the weakness as a leading...
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Wednesday, June 20, 2012, 7:40 PM ETThe weakness in the oil market is a warning, says Josh Brown. He sees the weakness as a leading indicator, and as oil prices hit their lowest levels in over a year and a half, it's a sign that global growth is facing some serious headwinds. With the fiscal cliff looming and persistent European troubles that never seem to go away, the energy markets seem to be confirming an inevitable downturn, and Josh, along with a host of other traders, are warning investors to prepare, now.
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This news story has 15 comments:
The stock market sure isn't backing up downtown Josh.
Put CVX, COP, SLB and VLO on your buy list.
If OPEC cuts back to support prices, US E&P companies are going to raking in even more!
The HSBC Flash Purchasing Managers Index, the earliest monthly indicator of China's industrial activity, fell to a seven-month low of 48.1 in June from a final reading of 48.4 in May."
http://bit.ly/LEkoNR
I am guessing China may have something to do with this drop in oil prices and apparently consumption. 8 months is more than a blip.
"China recently increased"
What does "recently" mean?
Provide a link and at the very least and some actual info would be helpful.
Oil markets like any market are forward looking and a drop in the energy usage expectations of the second largest national consumer will have an impact on the demand curve.
I did find this from Reuters which confirms what you said:
http://reut.rs/Mtx8cU
"BEIJING, June 12 (Reuters) - China's oil imports will likely surge past last month's record in either June or July as falling prices and expanding storage capacity encourage the world's second-largest buyer to boost its emergency stockpiles.
Higher overseas purchases by China would be a bright spot in an otherwise grim outlook for oil demand amid uncertainty about the strength of the Chinese economy and the euro zone debt crisis, which pushed oil prices down in May by the most in more than three years.
Total crude supplied to the world's second largest oil consuming market - net imports plus domestic production - exceeded the amount processed by refineries by 1.04 million bpd in May, the highest gap this year, suggesting more oil has been put in commercial or strategic storage.
The surplus averaged at 588,400 bpd in the first five months, Reuters calculations based on government data showed. China does not publish either commercial or SPR levels on a consistent basis.
EYE ON DEMAND
Still, some cautioned that slow domestic demand, if sustained, could start to erode the impact of stockpiling on imports.
"Since oil demand is sluggish, some oil product inventory tanks are almost full. Refineries are not willing to process more crude," said a crude trader with a state-owned oil firm, adding that refineries and traders were also reluctant to make large purchases given the recent volatility in oil prices."
rise in the 52 week moving average of non seasonally adjusted jobless claims or/and when the year over year change on housing starts is negative