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Edited September 18, 2020 by BLA

[0R0 + 6,251]

Not exactly, it is demand driven. Brent premium is larger than normal, indicating recovery in countries that have opened up more after their shutdowns and are further along in their recoveries.

Depressed WTI indicates a still less active US economy during the Southern breakout of CV19, which is now declining for a second week along with the general US numbers. .

 

[Blackbag99 + 20]

On 8/8/2020 at 7:24 AM, 0R0 said:

Not exactly, it is demand driven. Brent premium is larger than normal, indicating recovery in countries that have opened up more after their shutdowns and are further along in their recoveries.

Depressed WTI indicates a still less active US economy during the Southern breakout of CV19, which is now declining for a second week along with the general US numbers. .

 

So agree with the demand comment. Brent is likely to pull WTI in the coming months.

Europe fuel requirements are back to around 90% of pre-covid

[0R0 + 6,251]

9 hours ago, Blackbag99 said:

On 8/8/2020 at 2:24 AM, 0R0 said:

Not exactly, it is demand driven. Brent premium is larger than normal, indicating recovery in countries that have opened up more after their shutdowns and are further along in their recoveries.

Depressed WTI indicates a still less active US economy during the Southern breakout of CV19, which is now declining for a second week along with the general US numbers. .

 

So agree with the demand comment. Brent is likely to pull WTI in the coming months.

Europe fuel requirements are back to around 90% of pre-covid

I should add that the effect in the dollar is resulting from the same reason that Brent is rising. The Eurodollar system financing trade  and global manufacturing creates dollar balances as economic activity increases, since it funds the working capital increases. Thus the dollar falls for the same reason Brent prices rise. It isn't so much that one causes the other.

Part of the reason the dollar had been so strong in recent years was the decline in Eurodollar supply growth with decelerating activity, thus creating a shortage of dollars. This shortage caused a draw on US cash Repo and reserves and the repo crisis of late 2018 and again 2019. Once activity stabilizes rather than accelerating rapidly in the rebound period, the prior condition will return of a liquidity constrained Eurodollar system.

I have intended to comment for a while on this forum that the dollar outside of the US, operates like a gold standard via the Eurodollar banking system. Thus the US financial system is the "gold mine" and the Eurodollar banks tap it for cash liquidity. Since the Eurodollar system and the global trade economy are about the same in scale as the US economy, the deflationary aspect of it is imported into the US trade and finance. Particularly when the Eurodollar system is strained and sucks out cash via repos and cash correspondent accts.

[BLA + 1,666]

On 8/9/2020 at 4:18 PM, 0R0 said:

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Edited September 18, 2020 by BLA