Chart of the Day: Oil is oil

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Today’s chart plots the widely quoted West Texas Intermediate Crude (WTI) price against the ICE Brent Crude price since the early 2009 low following the GFC (non-Australian readers call this the Great Recession)

The chart shows the recent divergence, whereby the former corrected alongside other “undollar” assets, whilst ICE Brent remained resilient has now closed, with WTI rallying hard to catch up:

ICE Brent is forming a six month long bullish “flag” pattern, which indicates another possible leg up in the not as sweet and light energy source. Readers at MacroBusiness recently debated the efficacy of following WTI as Brent may provide a better barometer of energy price inflation, but the chart does show a meaningful correlation between the two markets.

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