Oil price discussion and analysis

[Ann]

Oil traders seem to be going to great lengths to work out the POO going by this article, look at the article site for a pictorial example....

Oil Traders Are Now Watching Workers’ Phones to Spot Problems at Refineries

In the $40 trillion global oil-trading market, the smallest clue can be worth millions.

Take the number of people working at a refinery: Outside contractors are brought in for routine maintenance or to handle accidents that could limit demand for crude oil or curb the supply of fuels. While oil companies rarely reveal such sensitive information, traders can gain insight into refinery operations by tracking the number of mobile phones at the plant, a proxy for the arrival of support crews.


It’s the latest example of how traders, rival companies and analysts are turning to new sources of information to get an edge in markets where trading is increasingly driven by algorithms that crunch vast troves of data. By using so-called geolocation information that can originate from mobile apps, data scientists can track human behavior, from shopping habits to hotel occupancy rates.


“For oil traders, knowing where the workers are and how many there are will absolutely help traders know how much output the refinery is producing,” Claire Curry, BloombergNEF’s head of digital industry, said in an email. “Unconventional forms of data -- like where people are in a plant, or the levels of oil in tankers -- will become available not to just large companies who collect the data, but to the cleverest data scientist with the best algorithms.” More...

 

[Ann]

Oil Rig count down nine from 833 to 824

Oil refining sector to recover but could be facing last upcycle

Angela Macdonald-SmithSenior Resources Writer
Mar 25, 2019 — 12.00am

Oil refining margins will recover from their current slump and the sector will then enjoy an extended rosy patch, but it could be its last as improving fuel efficiency and the aggressive shift to electric vehicles in the huge Chinese market take their toll.

That's the view of Fereidun Fesharaki, founder and chairman of respected consultancy FGE, who recently explained his outlook for the sector to the Caltex board.

(This is as far as the article goes without a subscription)

 

[Ann]

A Flood of U.S. Oil Exports Is Coming

American petroleum exports to overtake Russia within 5 years.

Oil trader Paul Vega is at the vanguard of shale’s next revolution.

Driving his pick-up truck through the heartland of the Permian basin -- the vast tract of west Texas scrub where one of history’s greatest oil booms means miles-long traffic jams -- Vega says there’s more crude being pumped than America’s refineries can absorb. Today, the primary task of trading houses like his is getting the stuff overseas.


"We buy it, we truck it, we put it on a pipeline, and there it goes to the port -- and from there to the world," said Vega, who heads the office of global commodities trader Trafigura Group in Midland, the region’s oil industry hub.


What started as an American phenomenon is now being felt around the world as U.S. oil exports surge to levels unthinkable only a few years ago. The flow of crude will keep growing over the next few years with huge consequences for the oil industry, global politics and even whole economies. OPEC, for example, will face challenges keeping oil prices high, while Washington has a new, and potent, diplomatic weapon.

American oil exports stepped up a gear last year, jumping more than 70 percent to just over 2 million barrels a day, according to government data. Over the past four weeks, U.S. oil exports have averaged more than 3 million barrels a day --- more than what Middle East petro-state Kuwait sells. More...

 

[Smurf1976]

I see a divergence!

USA rig count continues to trend down, dropping a few each week.

USA oil production continues to go up.

You need the rigs to drill for the oil in order to be able to extract and sell it so at some point at least one of those trends has to come to an end and I'd be surprised if some movement in price wasn't associated with that either as leading or lagging thing depending on which way it goes.

 

[Ann]

Oil Rig count down eight from 824 to 816

 

[Parse]

And the oil production down for the first time since mid 2018...

"January oil production for the United States averaged 11.871 million bpd for January—down from 11.961 million bpd in the month prior."

Seems to take them a while to get this data, guess the guy with the measuring cup is taking a little while to count it all up.

 

[Smurf1976]

And the oil production down for the first time since mid 2018

If you keep having fewer and fewer rigs working then at some point you produce less oil.

There a lot of time lag in that due to the time the cycle of exploration > discovery > drilling > completion > production ramp up takes to play out but if you're doing less drilling the ultimately it's going to matter.

Which brings me to the point that at ~$60 per barrel it would seem that the price is too low to encourage a sufficient level of drilling to maintain production rates. That being so, at some point either consumption goes down or the price goes up.

 

[Sdajii]

If you keep having fewer and fewer rigs working then at some point you produce less oil.

There a lot of time lag in that due to the time the cycle of exploration > discovery > drilling > completion > production ramp up takes to play out but if you're doing less drilling the ultimately it's going to matter.

Which brings me to the point that at ~$60 per barrel it would seem that the price is too low to encourage a sufficient level of drilling to maintain production rates. That being so, at some point either consumption goes down or the price goes up.

Yep yep and yep.

The price of oil is already going up, strong uptrend over the last three months. There are big lags in cause and effect, as you say. The consumption of oil is not as elastic as the production of oil, this is true both in absolute amount and the time it takes to change.

This is shaping up for quite the rally. Mid year the POO should be much higher.

 

[Sdajii]

Anyone watching the POO over the last few hours? It keeps smacking exactly $60.50. Really looks like it wants to break out.

 

[Ann]

Looking at a five year chart, we can see the wedge the POO failed, the original support line (red line) was failed and now I am wondering if this will become the rising resistance line as a barrier for further rises beyond that red line.

 

[Sdajii]

Looking at a five year chart, we can see the wedge the POO failed, the original support line (red line) was failed and now I am wondering if this will become the rising resistance line as a barrier for further rises beyond that red line.

View attachment 93475

I think you focus too much on long term technicals when it comes to oil. If you look hard enough at any data set, including literally randomly generated ones, you can find all sorts of patterns. When it comes to companies which are difficult to value, yep, technicals are very relevant and can be the main driving force over any timeframe, but when it comes to oil, the fundamentals area really what drives the big picture. Technicals will come into it, but mostly over shorter term timeframes. Ultimately, there are plenty of players willing to sell whatever they can at whatever price they can get. The market is obviously manipulated heavily, but that's the fundamentals, not the technicals. Those players manipulating the price may engineer the price to follow technical patterns giving the illusion that technicals are the actual driver, but ultimately, for a commodity like oil it doesn't make sense. If there's an oil shortage, people aren't just going to sell oil cheaply because the technicals tell them to. That's not why prices go down unless you're looking at short term and relatively small movements.

 

[Ann]

I think you focus too much on long term technicals when it comes to oil. If you look hard enough at any data set, including literally randomly generated ones, you can find all sorts of patterns. When it comes to companies which are difficult to value, yep, technicals are very relevant and can be the main driving force over any timeframe, but when it comes to oil, the fundamentals area really what drives the big picture. Technicals will come into it, but mostly over shorter term timeframes. Ultimately, there are plenty of players willing to sell whatever they can at whatever price they can get. The market is obviously manipulated heavily, but that's the fundamentals, not the technicals. Those players manipulating the price may engineer the price to follow technical patterns giving the illusion that technicals are the actual driver, but ultimately, for a commodity like oil it doesn't make sense. If there's an oil shortage, people aren't just going to sell oil cheaply because the technicals tell them to. That's not why prices go down unless you're looking at short term and relatively small movements.

I have been charting and calling oil for many years using TA, mostly right calls as well. My old computer died with my older charts but I found one of my earlier calls for POO from May 2013. It was a swing trade calculation and was meant to be a very, very long term call beyond this time and still into the future.



I had to adjust the equilateral triangle slightly as the price went sideways for a bit but essentially the lines are still pretty close to what was drawn and it did fall as I called in 2013. I am not new to this Sdajii!

Same chart with more lines a few years later...

 

[Sdajii]

I reckon you were just lucky and your current red line will be crossed. Let's watch and see

 

[Ann]

I reckon you were just lucky and your current red line will be crossed. Let's watch and see

Possibly I was lucky, and then I called a bearish wedge pattern in October 2018 and was lucky again....



and then I got lucky when I called the support for a falling POO at $42



and then I got really lucky when it bounced off the $42 support line...



I guess I am just a really lucky chartist! Having said that, it may well push on through the red line and head onto the long term falling overhead resistance line and challenge it for the fifth time. Sdajii a chart is a chart is a chart, doesn't matter what you are charting you will get patterns and if your are a 'lucky' chartist it may give a small indication of a potential outcome.

 

[Sdajii]

Heh, you've accused me being the one 'desperate to be right' and then *after* you say that pull up a prediction you made 6 years ago! When I predict something in the moment and it *later* turns out to be correct you throw a tantrum and try to find an excuse to say it's wrong!

I can cherry pick stuff I've got right over the last 10 years too if you'd like me to play the absurd game. Well, no, I'm not going to bother, but you get the concept. Well, maybe.

So where will oil be in 3 months, 6 and 12 months, Miss Genius charter who knows charts control future commodity prices rather than fundamentals?

 

[Ann]

Heh, you've accused me being the one 'desperate to be right' and then *after* you say that pull up a prediction you made 6 years ago! When I predict something in the moment and it *later* turns out to be correct you throw a tantrum and try to find an excuse to say it's wrong!

I have never accused you of being 'desperate to be right' Sdajii. The only admonishment I have given to you is when you have plucked a figure from the ether and then not offered any substantiation for your call. All I got was 'it is too hard to explain'. Yogi-in-Oz was the first one to call a rise in oil back in around 2003-4 as I remember it. He did it with some astrological stuff I couldn't quite fathom but he gave his reasons. It was very weird stuff but he did substantiate his calls and he was right.
There was no tantrum thrown on my part, you were implying charts could be done for things other than oil because oil is a special case, no it isn't. It has an EOD price which can be tracked on a chart. I brought up my old charts up as a proof a result could be called from a POO chart the same as any other chart. It actually doesn't matter if I had called the price wrong back then, it just meant I would have failed to read the chart correctly. The POO was still moving in the same pattern as any other kind of chart.

I can cherry pick stuff I've got right over the last 10 years too if you'd like me to play the absurd game. Well, no, I'm not going to bother, but you get the concept. Well, maybe.

All I asked from you was just a little substantiation for your call. I was simply showing you how I substantiated what I was saying. If you want, I am more than happy to trot out charts where I made a wrong call. That has nothing to do with the efficiency of a chart, it means I simply I missed something when I read it. I was illustrating one can call an oil chart as well (or badly) as any other chart and oil is not a special case.

So where will oil be in 3 months, 6 and 12 months, Miss Genius charter who knows charts control future commodity prices rather than fundamentals?

I am not a genius, I am just a practiced chartist. Where in any post did I say charts 'controlled' commodity prices? Charts are a reflection of where the price of a commodity or stock (or anything) has traveled. Events control prices. It just seems at times, events and chart shapes coincide. However, there are occasions when I have mused that there is a mass of money going in and out of stocks and commodities using chart shapes by people who may not speak English and therefore won't be able to pick up on any of the Fundamantals. Maybe it's little old non-English speaking grannies who have lots of money and plenty of time to play in the markets using charts. Charts are a universal language, even little old ladies can use them if they practice hard enough!

The way I call a chart is just to suggest which way I think it will go on the short term related to the various support and resistance lines I have drawn on the chart. Currently the speed at which the price is rushing up to the red line makes me think it will exhaust itself before it manages to push through the red rising overhead, time will tell, it might break through. I am never adamant about any outcome, I know better.

 

[Sdajii]

Wow, you give credit to someone using astrology to predict oil prices. That says a lot.

Okay, I confess, by pet frog told me. It was his dying message to me. He said a magical clairvoyant mushroom conveyed the message to him via a high tech fungus-to-brain linkup provided by a particularly gifted sasquatch who was experimenting such such technology.

 

[Ann]

Wow, you give credit to someone using astrology to predict oil prices. That says a lot.

Okay, I confess, by pet frog told me. It was his dying message to me. He said a magical clairvoyant mushroom conveyed the message to him via a high tech fungus-to-brain linkup provided by a particularly gifted sasquatch who was experimenting such such technology.

Rightio, that will give everyone a basis on which to judge your information, see it wasn't so hard was it Sdajii?

 

[Ann]

Wow, you give credit to someone using astrology to predict oil prices. That says a lot.

Found Yogi-in-Oz on another forum back in 2004 this is Yogi speaking about his trading style. He copped **** everywhere, he was a Gann Trader but he used to get his calls right.

Hi folks,

There's been a lot of banter about the "law of vibration",
in relation to Gann's work, in recent times.

To find out more about this line of thinking, here's some
sources for light reading on the subject .....

FWIW ..... in TTTTA, Gann told us where to find a bunch of
information, about the laws of vibration, periodicity, sex
and a whole lot more.

..... he directed us to the works of Sepharial and a
quick examination of his booklist reveals a mountain of
other information, referring to these laws.

For example:

"The science of numerology, through the law of vibration"
..... John C Laurie

"Sound and Number: Law of Destiny and Design"
Mabel L Ahmad

"Thought Vibration" ..... William Walker Atkinson

"Vibration: The Law of Life" ..... W H Williams

Not forgetting Sepharial's own works, especially:

"The Kabala of Numbers I and II" and

"The Science of Foreknowledge"

-----

Many of the modern "experts" have jumped on the
Gann band-wagon, using only one aspect of
his work, as a selling point ..... such as
the law of vibration.

.....

It can now be proven, that such laws have
their roots in the works of Pythagoras and
later texts, like the bible, Oahspe, TTTTA
and more .....

..... common to all of these is the use of
the astrological bible codes, which exist
in all versions of these texts, English
versions included.

hope this helps you some

yogi

 

[ducati916]

Looking at a five year chart, we can see the wedge the POO failed, the original support line (red line) was failed and now I am wondering if this will become the rising resistance line as a barrier for further rises beyond that red line.

View attachment 93475

So essentially what you are saying is that as the red line is a rising line, the POO will continue to rise, but just not above [break through] that red line?

So it will either (a) grind higher with the red line over time; or (b) it will rise, pullback, and re-rise to the red line but (c) never break through.

On that analysis: you would be a buyer of oil?

If none of the above, what is the relevance of the red line?

Of more interest [long term] would be the $80'ish resistance/support line [horizontal] of a chart based analysis?

jog on
duc