The BRENT CRUDE/WTI CRUDE RATIO is set to drop as brent is expected to be weaker than WTI crude...the premium currently at 25.7 per cent should drop to around 18 per cent in the first instance. The daily chart of the ratio shows how it was turned back by the upper parallel channel line just above 1.275 and that it has now just nicked its minor uptrend suggesting that it should go lower...the support provided by the lower channel line and the 200 day moving average is at +-1.180...if this level should be violated the ratio will go a lot lower. The InvesTRAC model shows that the short term indicator has started to fall from overbought 100 with the forecast showing a rally around November 27 and a low sometime late January. WTI Crude has improved from 0 to +2 on the Global Seven www.investrac.com/global-seven
There is an obvious fundamental reason why the Europeans are benchmarket to Brent and pay a much higher price than US consumers and whilst the short term outlook is for the Brent ppremium to narrow, I will have to look at the monthly data to see what the long term outlook is.
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