In The Energies: Crude Oil Term Structure Collapsed Since September

WTI Crude is lower than it's been since early July and testing it's 200 day moving average (97.44 on CLZ13).

Crude oil term structure has absolutely collapsed since early September (Iran, UN, Kerry, Russia). If you're a regular reader, perhaps you recall me saying I thought term structure plays looking for a flatter WTI curve out in time would be one of the better long term opportunities. Hopefully you capitalized. Flat price tells you one thing, but the term structure can speak volumes.

Finally, the relationship between Brent (world crude oil) and WTI has blasted back out to multimonth highs after head faking at it's 200 day moving average.

There is a VERY CLEAR inflection point in late August and Early September as the Syrian War drums reached fever pitch and then quickly went silent.

One final chart: take a look at the SPY minus December WTI.

Between June and late August, Crude outperformed the S&Ps. May 22nd was the pivot when Bernanke said that Tapering could begin in 2013. Clearly that's no longer likely. Since the Syria threat abated, the Equities have dramatically outperformed and have done so dramatically since the Shutdown. Interesting.

Looks like there's compression potential there, but NONE of the above markets are for the faint of heart.

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