Oil price discussion and analysis

[over9k]

Aaaand brent just cracked 90/barrel.

Full steam ahead folks!

 

[over9k]

One unknown is to what extent end users have stockpiled?

Given the shortage of various other goods, it's at least possible that there's a lot of cars, trucks, buses, ships, industrial fuel oil tanks, heating oil tanks and so on that are fuller than they'd otherwise be. Individually minor but there's an awful lot of them so collectively it could be substantial.

No doubt of this at all, but I was more thinking along the lines of person/company/country XYZ not wanting some particularly hostile and/or powerful neighbours to even know they have it.

 

[divs4ever]

How The IEA Lost 200 Million Oil Barrels​

How The IEA Lost 200 Million Oil Barrels | OilPrice.com

Estimates from the IEA showed last week that 200 million barrels of oil were unaccounted for based on its inventory calculations, but where did these barrels go?

oilprice.com

 

[over9k]

Aaaand brent just cracked 90/barrel.

Full steam ahead folks!

Scratch that, it just clipped 91.

 

[Smurf1976]

o doubt of this at all, but I was more thinking along the lines of person/company/country XYZ not wanting some particularly hostile and/or powerful neighbours to even know they have it.

Agreed.

Another possibility I have in mind is the prospect of governments intervening.

I'm not keen on conspiracies and tin foil hats, covering oneself with highly conductive metal seems to be asking for trouble really, but I can certainly foresee someone thinking that if only they could get the oil price down well that takes some pressure off inflation.

The missing 200 million barrels isn't in the hands of or otherwise accessible to the Fed by any chance, ready to make a sudden appearance on the market?

Time will tell, it's just a random thought.

 

[qldfrog]

Agreed.

Another possibility I have in mind is the prospect of governments intervening.

I'm not keen on conspiracies and tin foil hats, covering oneself with highly conductive metal seems to be asking for trouble really, but I can certainly foresee someone thinking that if only they could get the oil price down well that takes some pressure off inflation.

The missing 200 million barrels isn't in the hands of or otherwise accessible to the Fed by any chance, ready to make a sudden appearance on the market?

Time will tell, it's just a random thought.

Well it was a one horse trick in that case.oil price will not slow now.

 

[qldfrog]

Well it was a one horse trick in that case.oil price will not slow now.

And to go geo political 200mt probably in China, Russia voluntarily slowing production ..maybe..or selling some unrecorded to China which would make more sense..
Do you need more alarm bells..and no the rotten regime of Ukraine the Democrats like so much ,especially POTUS family is not that critical, the real power play is China..and oil reflects that in my opinion.
But could be just POO manipulation by the US as @Smurf1976 explained..true possibility...or a mix of both

 

[rederob]

Strong uptrend remains intact but presently a bit overstretched:


US oil rig (excluding gas) count rising steadily, but still a long way off historical highs:

 

[Ann]

Strong uptrend remains intact but presently a bit overstretched:

Tend to agree with you Rob. Wondering if this may turn into a rounding top. Got my SELL trigger finger on the ready given the market conditions as they stand, or should I say fall?!

 

[rederob]

Tend to agree with you Rob. Wondering if this may turn into a rounding top. Got my SELL trigger finger on the ready given the market conditions as they stand, or should I say fall?!

POO up strongly overnight with Ukranian tensions and Texas cold snap affecting Permian production as major influences, along with apparent OPEC+ constrained supply:

 

[frugal.rock]

along with apparent OPEC+ constrained supply:

Apparent is the key word here...

OPEC sources have stated that supply is there and rising prices are being caused by geocrap.
Add the Permian shalers to the geo mix.

China customs have reported (finally) receipt of oil from Iran and Venezuela to stock recently depleted (auctioned) reserves.... US sanctions seen as a toothless tiger.

Iraq not pumping as much as it is able to.
Africa didn't maintain enough infrastructure last year and is struggling to get back online.

US gas stocks much lower than expected.
Like @ducati916 I expected a pullback (I was eying 77-78) which didn't happen.

I can see poo possibly hitting a ton next week, but likely to be choppy.

 

[rederob]

Repeat of last Friday with another recent record high closing price. Ukranian tensions may well push POO over $100 in the weeks ahead:

And just like last week, POO's price is again overstretched so we need geopolitical tensions to rise if POO is to remain elevated.

 

[Ann]

Repeat of last Friday with another recent record high closing price. Ukranian tensions may well push POO over $100 in the weeks ahead:

I was thinking a top of $105 maybe Rob, the pundits are saying $100. I think it is all a bit stretched at the moment and needs to consolidate for a while. But who knows what Putin will want? Amazing how he can control both the international stock markets and the oil and gold price with such a small amount of effort!

Now the real reason I am here is to put up a chart for the POO with some well-considered long term calculations using swing trade calculations for the top for the POO and then when that has been reached and it resumes its downward trajectory, I can see a bottom of around $18 dollars. This last calculation is based on the level of a massive volume spike on the day prior to the POO's collapse into negative territory. I have drawn a horizontal line from that price level of volume spike. I may be right, I may be wrong but this is going to be many years into the future and I very much doubt I will still be alive and kicking then. Some youngster may come across my chart one day and find it of interest many years down the track, and perhaps find the joy of a swing trade calculation and the strength of a long term volume spike level?

 

[qldfrog]

I was thinking a top of $105 maybe Rob, the pundits are saying $100. I think it is all a bit stretched at the moment and needs to consolidate for a while. But who knows what Putin will want? Amazing how he can control both the international stock markets and the oil and gold price with such a small amount of effort!

Now the real reason I am here is to put up a chart for the POO with some well-considered long term calculations using swing trade calculations for the top for the POO and then when that has been reached and it resumes its downward trajectory, I can see a bottom of around $18 dollars. This last calculation is based on the level of a massive volume spike on the day prior to the POO's collapse into negative territory. I have drawn a horizontal line from that price level of volume spike. I may be right, I may be wrong but this is going to be many years into the future and I very much doubt I will still be alive and kicking then. Some youngster may come across my chart one day and find it of interest many years down the track, and perhaps find the joy of a swing trade calculation and the strength of a long term volume spike level?

View attachment 137819

Not specifically targetting your work Ann, but i think if inflation carries on in the 10% to 20% pa range, any long term channel, support and roof level especially on longer periods will be twisted and made irrelevant.
Not sure how it was solved in the past?, maybe just express everything in 2022 $ then add an inflation factor in the scale for any future date?
So your $18 2022 target might be a $40 price in 2030..and you would be spot on.
Same for all stocks actually

 

[Ann]

Oil price discussion and analysis

Re: OIL AGAIN! ... What everyone needs to ask themselves is why would the price be so high if all the rosy news about supplies were accurate? ... That's right. OPEC countries have for years not shown significant drawdown on their reserves. The reason is simple. Their quota is linked...

www.aussiestockforums.com

Froggy, I first gave a potential outcome for the POO back in 2013 with a chart. I don't care about inflation or any other worldly events, I simply read the chart. I said back in 2013 the price would go into minus, it did not go into minus $20 plus because the fall from the symmetrical triangle didn't happen until some time later and the rising support was a bit higher from which I calculated the fall, so my calculations came from a higher level, same chart, same prices same price vertical. The actual low for oil was minus ($13.10). Now I think we all can agree there has been substantial inflation since 2013 and now but it was still minus, regardless of inflation. Notice how my charted price outcome was pretty near as dammit.
I hold with my calculations whatever decade they may fall. I reckon $18.00 will be the low regardless of inflation. When $18 happens it may be worth in your hand at the time $1.80. I am not talking value, I am talking price outcome according to my chart. I can see how it can get into minus or down to a ridiculously low price if a fundie gets caught on the wrong side of a trade.

This was my first chart from 2013 talking about oil and minus prices. You can imagine how brave that call was as a symmetrical triangle is seen as a continuation pattern and the price of oil had been rising as it created that pattern. I could see the price kept trying to break up above that falling overhead trendline and I could feel the POOs exhaustion, so not a hard call for me a make.

 

[rederob]

I was thinking a top of $105 maybe Rob, the pundits are saying $100. I think it is all a bit stretched at the moment and needs to consolidate for a while. But who knows what Putin will want? Amazing how he can control both the international stock markets and the oil and gold price with such a small amount of effort!

Let's see what the post-invasion wash up offers, as we are presently only $10 off long term resistance:

Given that $100/bbl is in sight, a jump over $105 as a consequence of Russia's role in the oil market along with a possible trade embargo on their goods might even see a new record price within the month.
A fall back to support is more likely in the medium term unless things in eastern Europe flare up.

 

[rederob]

Barely an hour later and POO breaks through $100/bbl.
Here's the hourly chart showing a 10% rise today:

The maroon shaded area is from the chart in my previous post, so we know WTI's price is way above its trend going back to March 2020.
At time of posting more upside looks likely.

 

[noirua]

OIL

The energy complex is soaring, with UK natural gas futures up almost 30%, while Brent crude has aggressively broken through psychological resistance at $100 a barrel with a 7% surge, hitting the highest level since August 2014. After Russia’s invasion sparked an initial spike higher, oil prices have continued to travel north as markets assess the hit to energy supply that is likely to come as a result of the conflict.

Underlying bullish fundamentals coupled with a deepening military conflict would likely exacerbate the existing imbalance between demand and supply with the potential for oil prices to journey towards $110, possibly even $120 a barrel.

 

[Smurf1976]

The energy complex is soaring

With oil, Russia produces about 10 million barrels per day and consumes a third of that, exporting the rest.

Now there are various estimates of how much spare oil production capacity exists globally but bottom line is whilst there's a degree of uncertainty, I've not seen any estimate which puts present spare capacity, excluding Russia itself for obvious reasons, at a level that could offset loss of Russia's exports of oil. The question's about the extent of a supply deficit not whether there'd be one.

So if Russian exports were to stop then we get some combination of inventory drawdown and price rising to the point where it kills demand. At least we do unless someone's sitting on more spare capacity than is generally accepted to be the case and is willing to use it.

 

[mullokintyre]

With oil, Russia produces about 10 million barrels per day and consumes a third of that, exporting the rest.

Now there are various estimates of how much spare oil production capacity exists globally but bottom line is whilst there's a degree of uncertainty, I've not seen any estimate which puts present spare capacity, excluding Russia itself for obvious reasons, at a level that could offset loss of Russia's exports of oil. The question's about the extent of a supply deficit not whether there'd be one.

So if Russian exports were to stop then we get some combination of inventory drawdown and price rising to the point where it kills demand. At least we do unless someone's sitting on more spare capacity than is generally accepted to be the case and is willing to use it.

Russian exports may slow down or even stop, but maybe not because of Russia's decision, but external forces.
From Star Tribune

Minnetonka-based Cargill has 500 employees in the country. It sent many people home and told others not to come in to work Thursday so they, like all Ukrainians, could try to secure a safe location for themselves and their families.

A shipping vessel chartered by Cargill Inc. was struck by a missile early in the day as it was leaving a strategic Black Sea port on Ukraine's southern border.

So not surprising then that that rates for the Big Oil carriers into Russia and Ukraine have gone thru the roof, but the price increases have gone up for other routes.
From Oil Price . com

Amid a general unwillingness of tanker owners to send their vessels to Russian ports, the freight rates for a medium-sized tanker to load Russian crude jumped nearly threefold on Thursday from Wednesday, shipbrokers and traders told Bloomberg.

The freight rate to hire an Aframax tanker on the Baltic Sea to Europe route surged after Russia invaded Ukraine, while owners of oil tankers had already started to avoid Russian ports because of both the military invasion of Ukraine and apprehension that sanctions for oil could also come soon.

As a result of the surging Baltic-Europe tanker rates, the Middle East to Europe rates also rose.


Two-thirds of Russia's crude oil exports are seaborne, from ports in the Black Sea and the Baltic Sea. The Russian flagship Urals crude grade loads from ports in the Baltic Sea, and most of it is sold in Europe.

So much interconnectedness, nothing is easy to analyse any more.
Mick