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Oil price discussion and analysis

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Possibly more reason for further falls?


Proponents of Anti-OPEC Bill Say Risk of Retaliation Is Exaggerated
A report commissioned by proponents of U.S. anti-OPEC legislation said that fears of retaliation by the oil cartel are overblown.

The "No Oil Producing and Exporting Cartels Act," or NOPEC, would subject the group of oil producers to possible antitrust action by the Justice Department. Opponents warn that its passage would hurt U.S. diplomatic interests and provoke retaliation against U.S. producers. But a new white paper written on behalf of Securing America’s Future Energy, which advocates for curtailing oil dependence, argues that those fears are overblown. More...

 
I meant to add a comment to the last post. With the Venezuelan sanctions and assorted other problems, Brent is less plentiful. A while back I suggested there may be a disconnect in the price of WTI and Brent. There does appear to be a price disconnect. On a Y.O.Y basis as of today price of Light Crude is down 5.36% but Brent is only down 2.18% for the same period.
Just thought I would say.
 
Ann said:
Possibly more reason for further falls?
Click to expand...
I think the Americans have lost the plot with this one.

US outlaws OPEC.

Next move - some other country decides to nationalise American Airlines or to socialise healthcare in the US and gives Trump the orders to get it done.

Crazy stuff really.

The USA has no proper jurisdiction over the business practices of other countries just as they have no control over the US.

If the Arabs want an oil cartel then so be it, that’s their call not someone else’s.

I foresee some market turbulence and political fallout if this goes ahead.
 

I think it is just sabre rattling, putting it in polite terms. Every day there is a new story of why it is going up and then why it is going down. It is like watching a game of ping pong.
 
Today it is going up!

Oil Bullishness Is at 2019 High as Rally Shows Signs of Sticking

Oil optimists pushed bullish wagers to a six-month high as the rally in prices continued.

Money managers raised optimistic wagers on Brent crude for a fifth straight week while closing out pessimistic bets by the most since January as turmoil in major oil-producing nations heightened supply concerns. Short-selling bets on the global benchmark plunged by 18 percent, according to data released Friday. More...

Exxon and Others Say U.S. Government Sold Toxic Crude Oil

Exxon Mobil Corp. is the latest company to raise concerns that a stockpile of U.S. government crude is tainted with poisonous gas.

The American energy giant said some of the oil it purchased last year from the Energy Department’s Strategic Petroleum Reserve, or SPR, contained "extremely high levels" of hydrogen sulfide, according to emails obtained by Bloomberg under the Freedom of Information Act. In some cases, the gas level was 250 times higher than government safety standards allow.


"The Department of Energy takes safety, security and environmental impacts involving SPR activities very seriously," agency spokeswoman Jess Szymanski said. "Last fall, an SPR cargo received by Exxon Mobil was found to contain higher-than-expected levels of hydrogen sulfide. Since then, the Department has worked with Exxon to resolve this concern, and find alternate options for the cargo’s delivery." More...

 
Time for a couple of three month charts at this critical juncture of support/resistance lines. This next week is going to be an interesting week, will Brent Crude move up further and will WTI break above the red line?

The WTI has slipped back under the red rising resistance line but is still above the important 200dsma (orange line)


Brent Crude has successfully lifted above the Fibonacci 38.2% and my horizontal support resistance line, which comes in at the same level. It also is above the important 200dsma

 
Article where Bank of America argues that POO could spike to $100+ essentially on shipping demand.

https://oilprice.com/Energy/Oil-Prices/The-Case-For-100-Oil.html

If Trump were to lose next election:

Warren proposes ban on new drilling on public lands. Democratic presidential candidate Senator Elizabeth Warren (D-MA) has proposed to ban new oil and gas drilling on public lands. “The Trump administration is busy selling off our public lands to the oil, gas and coal industries for pennies on the dollar — expanding fossil fuel extraction that destroys pristine sites across the country while pouring an accelerant on our climate crisis,” she wrote. “That’s why on my first day as president, I will sign an executive order that says no more drilling — a total moratorium on all new fossil fuel leases, including for drilling offshore and on public lands.”

jog on
duc
 
Reactions: Ann
Brent nears $72 amid tightening supplies; surprise draw in U.S. crude stocks

SEOUL (Reuters) - Oil prices rose on Wednesday, supported by concerns over tightening global supply due to U.S. sanctions and fighting in Libya, as well as an unexpected fall in U.S. crude inventories.

International benchmark Brent crude oil futures rose 21 cents, or 0.3 percent, to $71.93 a barrel by 0034 GMT. Brent earlier hit a fresh five-month high of 71.96 a barrel, the highest since Nov. 8 when prices topped $72 a barrel. More..
 
So there seem to be a lot of conflicting things at work here.

Tightening supplies, Kuwait ramping up production capacity, etc. A lot of things pushing in opposite directions.

The trend at the moment seems up though and given that oil prices typically surge toward the end of an economic cycle I'm more bullish than bearish.

The one thing that does concern me in that is what politics could bring.
 
Reactions: Ann
Let's look at the WTI and the Brent. First the WTI, this appears stuck under the red overhead rising resistance line, it made a good effort to overcome that level and may yet.
The Brent got above the horizontal support/resistance line I drew, which is the same level as the Fibonacci 38.2%. It is now just hovering above that line, one would have expected a lot more vigour from a price which has overcome such an important resistance line.

Looking at both these charts there appears to be a degree of 'fatigue' in the POO.


 

Fatigue isn't the first word which comes to my mind when looking at the POO today. Nice rally. I expect it to continue for a while longer
 
Reactions: Ann
Oil taking a hammering today.

"Oil prices fell sharply in early trading on Friday as the market reassessed the impact of U.S. sanctions on Iran. Analysts argue that Iran may succeed in mitigating the impact, maintaining some degree of exports. Also, expectations of OPEC swinging into action are also on the rise. Oil prices fell nearly 2 percent on Friday."

Just over 3% currently

jog on
duc
 


Should come as no major surprise, if you follow the COT

The commercials dropped their buying pressure by 49% [still +ve] but I suspect they will via this week's reporting turn [-ve].

The chart:
 
The Oil Rig count dropped by 20 rigs this week..


The POO made a valiant effort to overcome the red rising resistance line but eventually gave up and slumped below it again.

 
Ann said:
The Oil Rig count dropped by 20 rigs this week..
Click to expand...
There seems to be a definite divergence of thought here.

Price has been trending up until the past few days.

Rig count trending down.

Less drilling ultimately means less production which, assuming demand isn't going to fall in a heap suddenly, means higher prices.

So the price drops in the short term but rises in the longer term?
 
ducati916 said:
Should come as no major surprise, if you follow the COT

The commercials dropped their buying pressure by 49% [still +ve] but I suspect they will via this week's reporting turn [-ve].

The chart:View attachment 94125
Click to expand...

Given that there are no X or Y axes displayed in that graphic I am not sure that it qualifies as a graph.
 
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