Alexa, play Down by Jay Sean. What goes up must come down, and our old friend Brent Futures is once again staring down at the abyss. The bullish EIA stats reading was the perfect dead cat bounce for longs to get the hell out of there, as the US job growth revision fuelled bearish sentiment. Brent found support at the $76/bbl handle, but this feels like déjà vu. Time and time again over the last two years, just when traders thought Brent would capitulate, it always managed to find the floor at the low $70s. But as the famous investment disclaimer goes, “Past performance is no guarantee of future results.” Indeed, the holy trinity of bearish sentiments provided a perfect cocktail this week. Concerns about a US slowdown, namely its labour market and China’s economic misfortunes, paint a bleak picture for demand. Combine this with OPEC’s musings of bringing back barrels in Q4, and it’s no wonder the bears are so gung-ho.
