OPEC Maxed, Sugar Still Sizzling
Oil prices have exceeded the $28 per OPEC barrel price band,
yet the rise in price has not triggered an automatic increase in the producing
group’s output. Divisiveness within the group, ahead of OPEC’s meeting next week
is resulting in a fresh surge in energy futures. Crude oil and unleaded
gasoline, from the Momentum-5
List, and heating oil, from the New
10-Day Highs List, are all trading at new contract highs.Â
Only three members of OPEC–Saudi Arabia, The United Arab
Emirates, and Kuwait–have the excess capacity to pump more oil, with just the
Saudis appearing willing to do so in response to a self-imposed quota. The
remaining members do not want to increase production and will probably exert
pressure on the group to limit output increases. Meanwhile, OPEC is already
producing more than 500,000 barrels a day more than the group’s collective
quota, so it is unclear if an official output rise would have a material effect
on global stockpiles. Inventories are approximately 10% below levels of one year
ago and demand remains a high 74.4 million barrels a day, going into the peak
demand summer driving season.Â
Also from the Momentum-5
List, sugar remains on a tear with the July contract rallying into new
record territory.Â
Cotton rallied off a one-month low, filling a gap left Monday
and making good–although only briefly–on a
Turtle Soup Plus One Buy
setup. If this contract cannot rebound from these levels and remain within
the gap, cotton’s Implosion-5
status could dominate and result in further downside.Â
Lean hogs hit 20-day high levels Monday, reversed and are
continuing lower Tuesday, making good on their Turtle Soup Plus One
Sell setup.Â