During this time, the short-term, most violent bullish momentum has been reversed. At the same time, the speed of the fall is only gaining momentum. In July, two more than 10% declines have already occurred within 24 hours.
It looks like we only see the start of a decline in oil. Geopolitics, rapid demand after lockdowns and underinvestment in production have made the rally in oil sharper than in many other commodities. But now, we see consumption growth stagnating or even going down in some cases. Meanwhile, the leading producers (US, Saudi Arabia) are ramping up and promising to ramp up production soon.
All this leads us to believe that the commodity super-cycle did not take place and turned out to be sharp, but not for long. And the road ahead for oil is downhill. The closest meaningful stop on that downward path for energy prices looks to be $83 for WTI and $85 for Brent.
