Capital Flows and the Price of Oil

A brief look at the Historical Capital Trend for $BP Prudhoe Bay Royalty Trust (BPT.US)$ may prove telling for understanding market sentiment regarding the price for a barrel of crude oil.

$BP Prudhoe Bay Royalty Trust (BPT.US)$ is engaged in administering the royalty interest for the oil extracted by BP p.l.c. from Prudhoe Bay in Alaska. As such, the price of its stock moves in tandem with the price of oil (see the first two images).

On 9/27, oil futures opened at $76.47. The next day, BPT stock saw the largest inflows of Extra Large (top 10% by volume) orders in over a month. The previous similarly high inflows were on 8/18 when the price of oil on the futures market had opened at $86.71, which at the time was the lowest since 1/27.

Of note is that following 8/18, oil opened even lower on 9/8 ($81.91) and 9/9 ($82.80) respectively, and while $BP Prudhoe Bay Royalty Trust (BPT.US)$ did experience higher capital inflows overall (Capital Trend) on 9/9, it did not experience the same high Extra Large Order Inflows.

Could it be that "big money" has now identified a new floor for the price of crude oil? 🤔

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stefanita

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