Expect a lot of volatility in the oil market in the next few days.
Friday we had JP lean pretty dovish for his Jackson Hole speech bullish for price.
Many are taking the narrative that Hurricane Ida will disrupt oil production...thereby increasing crude prices. That is true enough. However, there is also refineries that have gone offline.
So it's not a one way narrative.
Ida is going to be one hell of a storm by the looks of it...and many are comparing it to Katrina. Ida's winds are currently stronger....though Katrina was much larger.
So a perfect comparison is not possible...still it can give us some good clues.
Katrina hit the gulf coast on Sunday, August 28th, 2005. On Friday the 26th, Katrina had recently been upgraded from a tropical storm to a Cat 1 hurricane.
The price of WTI on Friday August 26th was $66.07.
Over the weekend...Katrina quickly picked up strength and hammered the Gulf coast.
The future's market opened Sunday...still while the hurricane was in force...gapped up to $68.58...for a delta of $2.51.
Over the next few days we had a high low delta of about $4.85...then prices went down.
I don't know what prices will do...but I do expect a lot of volatility.
Friday we had JP lean pretty dovish for his Jackson Hole speech bullish for price.
Many are taking the narrative that Hurricane Ida will disrupt oil production...thereby increasing crude prices. That is true enough. However, there is also refineries that have gone offline.
So it's not a one way narrative.
Ida is going to be one hell of a storm by the looks of it...and many are comparing it to Katrina. Ida's winds are currently stronger....though Katrina was much larger.
So a perfect comparison is not possible...still it can give us some good clues.
Katrina hit the gulf coast on Sunday, August 28th, 2005. On Friday the 26th, Katrina had recently been upgraded from a tropical storm to a Cat 1 hurricane.
The price of WTI on Friday August 26th was $66.07.
Over the weekend...Katrina quickly picked up strength and hammered the Gulf coast.
The future's market opened Sunday...still while the hurricane was in force...gapped up to $68.58...for a delta of $2.51.
Over the next few days we had a high low delta of about $4.85...then prices went down.
I don't know what prices will do...but I do expect a lot of volatility.