Oil prices have been in transition for the better part of two years. With supply and demand closer to being in balance, at least in the near term, and global Capex budgets slashed, there is hope that the wide swings in crude are behind us. Of course, geopolitical sabre rattling -- from Iran to Venezuela -- and desperate American land drillers in less-economical shales could foul my view of tighter moves in crude going forward.
But what about King Copper? It is the most-used industrial metal -- for infrastructure, for energy and for connectivity. Copper is our barometer of core economic activity, globally. The metal is down 1.5% so far this year -- despite the fact that nearly all other commodities have been on a tear.
The chart looks interesting, in some ways. The metal has not retested mid-January lows -- the move that, in retrospect, led us into the pit of the market's February lows.
Watch copper closely. Unreliable inventory stockpiles out of China creates some volatility, but this reddish metal could be ready to take the baton from the oil crowd -- and help us navigate these markets as expected summer choppiness proceeds.
Overnight, LME Copper was up 2.7% -- following a day of Fed worries, market reversals and fear around Brexit.
Names that can benefit from a follow through in the copper action are Freeport McMoRan (FCX), Anixter International (AXE) and General Cable (BGC).