Total Chinese Credit Creation Leads Crude (In 1 Simple Chart)

As Teddy Vallee shows on the 10-year chart below, total Chinese credit creation verse crude year/year leads 7-9 months. Throughout time, crude tops have been marked at or near the time where the world’s second largest economy’s credit creation begins to lag. Today is no different and a reminder that crude bulls are in for an auction reversal following +25% advancement from June.

 

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And for some more color, here are some bonus charts….

In the world’s largest economy, the S&P 500 sales growth hits a brick wall in the second half of 2017 contributing to lower oil prices.

Yoy quarterly EPS growth for US and Europe plateaued in 1Q17 highlighting that’s as good as it’s going to get for growth in the West. Slower growth rates in 2h17 = less crude demand…

And all this is happening as the main driver of global financial markets ‘CB balance sheets’ are expected to wind down in 2018.

Which does not bode well for oil, but then again a war with North Korea could send crude higher.