Wednesday, September 30, 2015
BRENT AND WEST TEXAS INTERMEDIATE TRUE DOLLARS™ PRICE ACTION. HINTS OF A REAL RECOVERY AT LONG LAST?
It's no secret that the price of oil has been down of late. Since most think in current dollars, they believed the price of oil has only fallen since June 2014. However, oil has been falling since hitting a interim true peak back in April 2011 as measured in True Dollars™.
Of course, as an invariant measure, True Dollars are the only way you can know true prices of everything sold as well as the direction of where prices have been headed.
The three-week price action to the upside has been strong. So if you had been looking for buying power, buying oil or ETFs three weeks ago would have been a smart play. Of course, you would have known that had you access to my True Dollars data.
The Brent - West Texas Intermediate Differential chart proves interesting. He you can see that for years WTI sold at a premium to Brent. WTI to Brent hit a low back in 2003. Since fracking has led to efficiency in production in the USA, relatively inefficient Brent has sold at a premium. When oil can be had in abundance, it is cheaper to pull oil from dry land than from deep seas.
These charts will make their way into the live collection for commodities that you can access from the menu above.
If this price trend holds, I'd say it might be time to call a legitimate recovery in the U.S.A. is at long last underway. Certainly, bank credit has stabilized over the last year. That alone suggests falling GDP in True Dollars is coming to an end.