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Oil the New Gold-Buy When There’s Blood in the Street

November 16, 2023

Mish's Daily

By Mish Schneider

Weaker labor market, manufacturing production slowing, new home prices falling and crude oil inventories rising more than expected are all to blame for the big drop in oil prices.

US also eased sanctions on Venezuelan oil.

That’s the nature of commodities.

Fresh news can supersede older headlines and force the weaker longs out of their positions as we saw today.

But-

Thanksgiving travel will goose demand.

So will the decline in crude floating storage. Tankers holding crude are been at the lowest levels in 2 ¾ years.

India has increased consumption.

OPEC+ will continue cuts of production.

Pick your side.

I am going with oil is the new gold.

The futures contract (December) looks oversold and into support at $72.00 per barrel.

The USO ETF chart just broke the July 6-month calendar range high (horizontal green line).

And looking oversold.

More importantly, 67 is huge support so we are close if not at the bottom.

And if oil is the new gold, you buy it when it looks awful, sell it when it looks strong.

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