Gold Market Wire
News, analysis and commentary for gold traders and investors
Crude Oil Update
Crude Oil Profit Takers Emerge as Ukraine Invasion Fails to Materialise
February 18, 2022 - (Gold Market Wire) - The Crude Oil length is heading for the exits as the expected invasion of Ukraine by Russian forces has failed to materialise. The market is reversing sharply in the European a.m. - and on a Friday, no less - as the realisation dawns that the Ukraine "war" could be a long time coming, and is probably being "fought" by Moscow in a hybrid manner whose objective is simply to embarrass the Western nations (especially the USA and UK) on the international stage -
The length is running away.
Readers here will know we've been hot on Crude Oil for months now. Back on October 7, we noted:
"we see Crude Oil as under-valued. Gold and Silver are doing well to 'hang-tough' while equities get pounded, and we are impressed. We're not ready to get long the metals yet, but the potential is certainly encouraged by their recent performance.
That is not the case with crude oil. Crude is where the action is, and that is not likely to change for some time. This oil bull has months to run, and right now, the pullback (a classic back and fill) from the recent break-out offers a nice place to add length."
That was when we were at $80 a barrel on Brent. The market really needs to rest; to pull back and retrace. We've closed out the position, but we will be looking for another point to get back in before long. Crude Oil is, we are convinced, going to be the story of the decade, and we will be above $100 before long. For now though, we pocket the profit on the position and turn our eyes back to the Precious Metals. The next few months, as we head into a round of global elections - aka the Covid/Lockdown vote - are likely to take centre stage, and the total disaffection with government is about to be exposed. That should help the Precious Metals nicely.
The Crude Oil market has realized that, actually, Putin doesn't need to invade Ukraine at all. He just needs to sit back and watch the West commit suicide and collapse, while they (all too typically) blame the rest of the world, save themselves. They are acceding to Putin's wishes more than he could have ever dreamed, or engineered from inside the Kremlin. He has no need to fight right now.
The security balance of European power has been horribly exposed. The EU, for all of its grandiose ambitions, has no unified army, and no way of creating one. How would these differing historically warring and contentious nations and peoples ever come together under a common security blanket? It is simply not possible. NATO is faltering and is becoming little more than yet another siphon of public funds for government employees to suck down for personal gain.
The USA has made its pivot to the Asian arena. Diminished in power, and flailing wildly in self-contradictory gyrations fostered by divisive internal political conflict, it has decided to focus its ever wavering attention of the Pacific area. How exactly it attempts to dictate policy to the Chinese may be another demonstration of the faltering limits of Washington's projection of power.