The charts show the rocket launch in oil prices on Monday, 9/16/19, due to the drone and/or cruise missile attacks on Saudi Arabia's premier oil facility and oil field. Oil prices print the largest spike higher in a decade. Brent oil catapults +12.4% to 67.68. An initial spike in price almost hit 72 when oil futures trading began trading Sunday evening. Watch for a close above 68 in the chart above which would then pave the way to 72.20-plus.
After the initial spike higher Sunday night into Monday morning, Brent oil pulled back to 65-66 and markets were seeking calm. However, during the Monday trade, Saudi Arabia said the oil facility systems will not come on line as fast as thought and bingo, Brent popped higher again and was sporting a consistent 69-handle.
On Tuesday morning, 9/17/19, Brent oil futures are down 0.41, -0.6%, to 68.61.
West Texas Intermediate Crude Oil leaps +14.7% to 62.90 in the Monday trade. Currently, WTIC oil futures are down 0.89, -1.4%, to 62.01.
Reference Keystone's previous Brent oil chart showing the long-term sideways symmetrical triangle chart pattern and explaining the initial oil drama after the attack. The top trend line of the triangle is at 67.50-ish so it is a big deal for Brent to spend time above this level (it portends far higher prices ahead if price begins logging closes above 67.50-68.00).
On Monday morning, President Trump could not resist waxing bravado telling the world that the United States is "locked and loaded." That is something an adolescent says on Facebook to impress his friends and girls. Trump walked back the hard line rhetoric now saying, "I don't want war with anybody."
Iran President Rouhani rules out any meeting with President Trump in the future after it is accused of orchestrating the drone/cruise missile attack on the Saudi oil facilities. Trump wants to take a diplomatic path with Iran but countries do not respond well to threats; nations are not able to do that since they will look weak. That approach worked for Trump in real estate deals in the private sector since he had the gold and he makes the rules. Politics and foreign policy does not work that way.
Iran likely feels emboldened to create more trouble in the Middle East. Trump balked at responding to the drone attack by Iran a month ago. Also, Trump has no response to the seized oil tankers. He also removed (or he resigned) National Security Advisor Bolton, a hawk. Now, the president puffs his chest out saying military action is a distinct possibility but he again quickly retreats from the bravado position and says he does not want conflict. Foreign policy was an absolute mess under Emperor Obama, he was inept at handling the world stage, but the US is not in much better shape with the ongoing confusion and angst created by King Trump.
Saudi Arabia was supposed to have a news conference yesterday but did not further adding to yesterday's oil rally. The presser is supposed to be today and will be guaranteed to move the oil and stock markets. The world is waiting for evidence on what type of attacks occurred, who supplied the hardware and where the attacks were originated. The Saudi's say the hardware was Iranian but are not yet pointing the finger at Iran like the US is.
What is likely is that the US and Saudi Arabia are playing a stealth game now and plan to retaliate. Trump will be agreeable to a retaliatory strike since he will feel obligated to back up his three years of macho military talk with some action. Trump is aware that foreign leaders are less impressed with his forceful tactics as time goes on. Thus, we will wake up one morning, probably a couple weeks from now, and there will be some type of retaliatory action occurring. The new moon is Saturday, 9/28/19, so the expectation is for a retaliatory move against Iran, or Yemen, or elsewhere, between 9/26/19 and 10/2/19. America has superior night vision technology.
The gray circle shows the death crosses occurring for oil. WTIC prints a golden cross in August and actually slipped back to a death cross in recent days. This will be nullified due to the huge spike higher in price. The 50-day MA will quickly curl higher.
The world awaits the Saudi press conference that will provide details on the attacks. After that, we wait for the US and Saudi retaliatory action against Iran, Yemen, or others. King Donny and Crown Prince Mohammad Bin Salman are discussing the retaliatory options; a tricky situation since action is required but it should not be so large that it starts a war in the Middle East (which is what Iran is likely trying to create since there is probably no relief from sanctions). This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 5:13 AM EST: Saudi Aramco says oil loadings will be delayed a few days going forward. Oil prices bump higher. Brent oil is down -0.4% at 68.73 moving up towards 69. WTIC oil is down -0.9%, also recovering intraday, to 62.33. The world awaits the Saudi Arabia press conference. The Arabs should trade in their white robes for top hats, tails and canes. That way they can tap dance easier.
Note Added Wednesday Morning, 9/18/19: Brent and WTIC oil drop during the Tuesday trade after Saudi Arabia says much of the production will be restored quickly and all of it by the end of the month. The premium comes out of price as tight supply will not be as much an issue. Over 3 days, oil is up about +7%, so that is the premium put into price due to the drone/cruise missile attack. The biggest worry is if this type of attack will occur again and if it will also begin targeting other sites such as government buildings. Drone warfare may drive all humans underground in future years. WTIC oil is marginally lower at 59.14 and Brent is marginally higher at 64.71. Brent oil's 20-week MA support is at 63.43 and 200-day MA at 63.99.
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