Don't Google this term... you won't find it, it doesn't exist... at least not yet!
This is the term I use personally in my private research. “CHRONOCRUDOLOGY” is the amalgamation of Chronologie and Crude Oil. This term is very similar to "CHRONOBIOLOGY" which is a medical term referring to repetitive cycles in the human body.
Having one foot in research and the other in trading, it made sense for me to make the connection between what is happening in the oil market and the body's biological cycles.
First of all, for those who are not familiar with science, a quick definition of Chronobiology:
Chronobiology corresponds to the study of biological rhythms in the body. Indeed, the activity of the human body is regulated by these different biological rhythms.
The biological rhythms studied in chronobiology correspond to a periodic physiological variation. They are defined by period, amplitude, average level, phase and frequency. The different biological rhythms are classified according to period or frequency.
Depending on the period, we distinguish the rhythms:
Ultradien (or rapid): period of less than 24 hours
Examples : heart rate, respiratory rate, sleep
Circadian (or nycthemeral): period of approximately 24 hours (consisting of a day and a night)
Examples : sleep/wake alternation, temperature curves, secretion of certain hormones such as cortisol or melatonin
Infradian (or slow): period greater than 24 hours
Examples : menstrual cycle, secretion of certain hormones such as FSH and LH which vary during the menstrual cycle
Now that you are knowledgeable about Chronobiology, you suspect that Chronocrudology simply refers to the cycles of Crude oil.
What has always fascinated me about oil trading and particularly Crude oil, is that everything is perfectly documented and freely accessible by the American administration. In one click you can find out everything about the state of their weekly stocks, their consumption of gasoline, fuel oil and other distillate products, their strategic crude reserves but also their number of drilling and oil platforms and their exploitation of oil. crude refineries... it's a gold mine of weekly information that cannot be found in free access, for example for other raw materials or other stock market assets.
What fascinates me the most is the repetitive rhythm of the cycles linked to oil!
All oil traders are well aware of the biggest oil-related cycle, which is the rise in the price of crude oil in summer and the fall in winter.
Called "High driving season" for summer, due to increased consumption between July and August but which also includes June and September.
And the off-peak “Maintenance” period of refineries which is in November and December.
These cycles, which could be called Infradian , are known. On the other hand, the other cycles that could be described as circadian and ultradian are completely unknown! And yet they do exist.
Ultradians, which are the fastest cycles within the same day, are exceptional!
I gave them friendly little names to mention them:
There is “ The Slide ” it is a specific time slot where the price of Crude slides, like a slide.
There is “ The Elevator ” it is the precise time slot where the price takes the elevator and climbs.
There are " The Cursed Hours " periods as its name suggests which are broader and where the price of a barrel can drop quite violently before recovering.
These time slots were identified because 7 to 8 times out of 10 (i.e. 75% of the time), they are relevant and occur according to schedule.
There are 1 slide, 2 elevators and 1 cursed hour identified on a daily basis.
Isn't that fascinating?
But what could seem even more fascinating, if it turns out to be right... are the cycles linked to the day, from one year to the next!
For more than 2 years, I have carefully noted and cataloged on a daily basis all my trades and everything that is happening on the oil market and on the geopolitics of the moment.
To give you an idea of the work listed, it's 1,000 pages written per year... and by hand please. Many studies have pointed out that you retain information much better when you write it yourself manually, and honestly, it is more aesthetic and pleasant to reread.
So I have the habit of rereading my notes from previous years to find out what happened on exactly the same dates.
And here, precisely, it is Saturday May 4, 2024, last year it corresponded to Saturday May 6, 2023.
We also had the FED meeting on Wednesday of the same week, and of course the NFP (Non Farm Payroll) job applications in the USA with the unemployment rate as well as the crude stocks published on Wednesday by the IEA... exactly the same as the week we just had.
What concerns me is that the figures released from one year to the next are completely different, that the geopolitical situation is also completely different... but that the price of Crude oil nevertheless reacted in exactly the same way ...
Last year at this same period we had (I reread my notes from May 3, 2023, the day Powell spoke) it was a Wednesday identical to our Wednesday May 1, and there were also the NFPs at 2:15 p.m., US PMIs at 3:45 p.m., crude oil stocks at 4:30 p.m. and Powell's speech with the FED's key rates between 8 p.m. and 8:30 p.m....
Result for the year 2023:
Not enough crude reserves in the USA.
The American job market stronger than expected.
On May 4, 2023 I noted that we suffered 3 days of crash in the price of a barrel even though this seemed inconsistent to me given the lack of oil reserves in the USA and strong US employment which underlined a strong economy and demand. oil also strong.
No major geopolitical crisis to highlight.
Result for the year 2024:
Too much crude oil reserves in the USA.
The American job market is failing for the second consecutive week and unemployment is increasing.
On Friday May 3, 2024 , I noted that we suffered 3 days of crash in the price of a barrel, which seems legitimate in terms of the news learned. And above all given the current geopolitical crisis between Hamas and Israel... the ceasefire in the spotlight could make us believe in a lull in tensions in the Middle East.
On paper, two diametrically opposed situations, but exactly the same direction at the price of a barrel of Crude.
And on Monday May 8, 2023 (temporal equivalent of our next Monday May 6) the barrel opened with +0.25 cts... and began to rise quite quickly to +0.50 cts in the first hours of the session Asian.
It would be curious to see in a little more than 24 hours how much Crude will open on Monday night at 12:05 a.m.? If the barrel also opens at +0.25 cts... I would definitely be fascinated by this asset!
And of course I would continue to study it to try to uncover the slightest mysteries...
Otherwise, it’s time for the geopolitics of the moment!
Well... we wait...
Again and again the famous ceasefire deal on Gaza. It's been a week since all the media around the world have been talking about this 40-day truce deal with the release of hostages which is imminent.
Oil traders began to sell the rumor, the price of oil on this rumor of truce only fell, accentuated by a surplus of crude stock in the United States and a drop in American employment.
Already last Friday, April 26, the ceasefire was on the negotiating table in Qatar.
Hamas had until Monday April 29 to respond... then the ultimatum was pushed back to Wednesday May 1... it is Saturday!
The delegation migrated to Cairo for the final negotiation today.
If no solution is found during the weekend, Benjamin Netanyahu has already mentioned that the IDF was going to return to Rafah, with or without a truce agreement... (And to say that it is he who is supposed to negotiate the release of hostages... he is as shrewd as Trump in his negotiations... like children they say what they think without filter... while the first rule in politics is to never say what you think ^ ^.)
The north of Rafah has already suffered an aerial bombardment on Saturday, but no troops on the ground for the moment.
It is very likely that traders have already sold the rumor and are waiting for the news to buy.
Another rumor of the moment, the Biden administration could replenish its strategic oil reserves now that it has just passed the symbolic mark of $79.
And yes, trading is just trusting rumors and reacting as quickly as possible in the opposite direction if you realize that they were false... (see post of June 9, 2023: " And she run, she spreads the rumor... ").
This is where we are this weekend...suspended on truce negotiations for Gaza.
Have a good weekend everyone!
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