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These Are The Modeled And Empirical Evidence Of A Likely Crude Oil Sell-Off In May

These are the modeled and empirical evidence of a likely Crude Oil sell-off in May:

(1) BRENT OIL versus Brent Time Spread vs OIL PRICE IMPULSE MODEL

  • Price Impulse Model: net impact of US Dollar valuation (-) vs rate of global stock withdrawals (+)
  • The Brent time spreads frequently provide an early lead on spot oil changes
  • Brent Oil pricing model is suggesting we are close to fair value (given current USD and C&LF net withdrawal levels) at circa $50 - $57 Brent

This is a live chart. Click on the link below to get an updated chart:

product.datastream.com/dscharting/gatewa...

(2) After several weeks of easier pressure on Cushing capacity, stocks are growing again -- Cushing stock changes lead WTI 1-2 spread, oil price changes by several weeks. This does not bode very well for a continuation of the current oil price rally.

This is a live chart. Click on the link below to get an updated chart:

product.datastream.com/dscharting/gatewa...

(3) The power of C&L Fuel net withdrawals over Oil in the price determination: Global C&F Fuel net withdrawals are forecast to fall until July-August, and may help depress the Brent price.

This is a live chart. Click on the link below to get an updated chart:

product.datastream.com/dscharting/gatewa...

(4) Expect a USD Dollar recovery from not far from current 93.00 DXY level (may fall further to mid-92.00s) -- which would be negative to oil and commodity prices in the next few months.

This is a live chart. Click on the link below to get an updated chart:

product.datastream.com/dscharting/gatewa...

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.