Oil price discussion and analysis

[Smurf1976]

I don't know if any ASF members have ever been in an Oil Crisis similar to that following the 6 Day War between Israel and the Arab States. It was a time of wild fluctuations in price, pushing cars in to servos and fisticuffs even between godbotherers who would normally just say a prayer, do the hokey pokey,, hop on a mat or chant oooom.

Whilst I do think we've a lot of problems with oil, the thought that comes to mind is "markets don't move in a straight line".

If governments trying to get the price down and making no secret of that can't actually lower the price then that would be a massively bullish signal longer term.

 

[rederob]

Whilst I do think we've a lot of problems with oil, the thought that comes to mind is "markets don't move in a straight line".

If governments trying to get the price down and making no secret of that can't actually lower the price then that would be a massively bullish signal longer term.

Below is the big picture back to the GFC:

The present trend is very bullish and the all time record high POO can be hit in a matter of weeks given the right circumstances.
However, an interesting question to now ask is if we have entered a new paradigm: one of pervading high POO?
Right now it looks like neither the frackers nor OPEC are overly keen to add more production. Most frackers are still paying down debt so in a fashion welcome high prices, insteading of pushing out more oil for less. Meanwhile conventional drillers know that every year the cost of replenishing reserves increases, so to stay in business they need their shareholders to get decent returns and not continue their downward share price spirals.

 

[ducati916]

Below is the big picture back to the GFC:
View attachment 140104
The present trend is very bullish and the all time record high POO can be hit in a matter of weeks given the right circumstances.
However, an interesting question to now ask is if we have entered a new paradigm: one of pervading high POO?
Right now it looks like neither the frackers nor OPEC are overly keen to add more production. Most frackers are still paying down debt so in a fashion welcome high prices, insteading of pushing out more oil for less. Meanwhile conventional drillers know that every year the cost of replenishing reserves increases, so to stay in business they need their shareholders to get decent returns and not continue their downward share price spirals.

Here is an inflation adjusted POO



The argument could be made that between $60 - $80 is the new sustainable price. There will be price shocks.

jog on
duc

 

[DaveTrade]

Looking at Oil through the lens of the USO etf, the FIB levels are lining up nicely with price action. The near term trend is down making the 68 area next support if the current level doesn't hold. I have an oil stock in my list that I'm waiting to go long on when oil turns.

 

[Garpal Gumnut]

That she blows again or something similar.

Brent comfortably above $100 again.



gg

 

[Jeda]

better get used to it, going to be a roller coaster ride for a long time ?

 

[Garpal Gumnut]

For those of you who didn't live through the 70's, this Oil "Shock" is going to last a long, long, time.

Once out of the bottle too many players interfere with the Genii. This Jinn ain't for stopping.



gg

 

[DaveTrade]

Oil (USO chart) moving higher and showing no sign of slowing. The reaction to minor resistance above will give feedback on the possible length of the move.

 

[qldfrog]

There are many signs that further sanctions on Russian energy exports inc gas in the EU are being delayed past the french election second round to ensure the reelection of Macron (wef alumni and euro deep state rep)
As such , expect these sanctions to be announced in a week, and so be followed by a jump in oil prices then.
Buy cheap oil and oilers in the next 4 days

 

[qldfrog]

And remember:
https://www.wsj.com/articles/green-...estVariant=cx_4&cx_artPos=0&mod=WTRN#cxrecs_s

 

[rederob]

And remember:
https://www.wsj.com/articles/green-...estVariant=cx_4&cx_artPos=0&mod=WTRN#cxrecs_s

What are we supposed to remember?
Lomborg has no credibility on oil matters, and the whole premise of his quoted article was arrant nonsense.
America does not represent "the world", for starters. This is especially true for the NEV transition where it remains a laggard, and remain until legacy auto gets it head out of the sand.
But what makes Lomborg continue to look more stupid by the year is the simple fact that green energy gets cheaper via R&D plus scaling, while fossil fuels get more expensive because the low hanging fruit has been eaten and the orchards are increasingly more scarce.

The upshot of the above is the cost of reserves replacement has to be balanced with capital discipline and ESG considerations in order to retain shareholder confidence:

"The task is becoming more and more challenging as investments in exploration shrink and success rates slump. The declining proven reserves could create serious challenges for Big Oil (ExxonMobil, BP, Shell, Chevron, Total and Eni) to maintain stable production levels in coming years. This would in turn cause revenue to dwindle and pose a major threat to the financing of the group’s energy transition plans."​

 

[Telamelo]

There are many signs that further sanctions on Russian energy exports inc gas in the EU are being delayed past the french election second round to ensure the reelection of Macron (wef alumni and euro deep state rep)
As such , expect these sanctions to be announced in a week, and so be followed by a jump in oil prices then.
Buy cheap oil and oilers in the next 4 days

RE: "Buy cheap oil and oilers in the next 4 days"

I agree with you mate as think/believe that is a wise call

P.S. I'm getting more BYE & CVN tomorrow to name a few (not investment advice per say)

 

[bluekelah]

I must admit @frugal.rock and @CityIndex that the POO is extremely volatile.

I do not share the hope that Brent will fall to $80.

The recent chart indicates it is still rising and unless it gets lower highs and a lower low from the technical view it is still a bullish proposition.

Fundamentally the Western Europeans need more oil and gas to avoid a recession and it would seem that less will come from Russia.

The USA under the Democrats will not be able to reposition quickly and the release of their reserves is a pittance, so in terms of the Aussie Dollar, even if the Petrodollar aka $USD is worth less our petroleum assets will appreciate.

As to the Saudis, Iranians, Chinese and Russians, their supply and demand, who knows?

Uncertainty increases prices generally.

gg

So does massive underinvestment in the oil sector past couple years due to covid. That will be the main MACRO trends next 1-2years driving POG up, not to mention the inflation driving the USD devaluation.

You cant just turn on the tap and increase production by millions of barrels a day from the oil fields. I believe the arabs are maxxed out and so are the Russians. And as you said the underground reserves cant be pumped fast enough and are also at multiyear lows.

 

[frugal.rock]

I'm happy for oil bulls that my pricing prediction range was well wrong. Timing was very ordinary also.

That happiness is accentuated when I go to the servo!
( sarcasm meter goes "sproing" for this latter comment...)

 

[Smurf1976]

For those of you who didn't live through the 70's, this Oil "Shock" is going to last a long, long, time.

For those not aware, it was a 12 year event in practice.

October 1973 it got underway and late 1985 was the effective end with the price crash.

Physical energy infrastructure doesn't get built in a day or two indeed it's generally more time consuming to build a project today than it was back then (exceptions but in general it is).

 

[Student of Gann]

Hello here is a recent Forecast issued 14th April calling counter trend top for Oil on the 19th April and attached Curve extending out till the end of May including primary trend and minor Cycles .
Regards Grant


student of Gann twitter
studentofgann.com.au
https://twitter.com/studentofgann
https://twitter.com/studentofgann
19th April could be counter trend Top for Crude Oil.

 

[qldfrog]

Sorry, but for you, oil trades at $US250 a barrel

The oil market is projecting a false sense of stability when it comes to energy inflation. Just look to the refining industry.

www.afr.com

Very interesting paper imho

 

[Student of Gann]

Crude Oil Forecast for May :

On the 30th April a letter was posted on the website calling Top for the 5th May five days in advance and a supplement was sent out on this date confirming 111.37 as Top . Price is currently down around 11% or 12.37 from the High . Forecast for Crude Oil is now complete with a projected date for Low including detailed notes and other calculations . studentofgann.com.au

 

[rederob]

Using the past year's trend as a basis, WTI crude's price is smack on the median:

Looks like Europe is going to continue to be the price maker given it's taken Russia's oil off the table and is hunting everywhere else for whatever it can get.

 

[rederob]

Up over 3% on Friday, and the 5-year trend remains positive:

Still some headroom left to reach all time record high.
However, note the average price during this charted period is a tad under $60/bbl, so potential downside risk is severe.
If we assume Russian oil is largely locked out of Europe from now onwards then the downside risk is way off. In terms of black swan events, should Ukraine remove all Russian presence plus recapture Crimea and win war reparations, then it's possible to see a complete reversal of Europe's position.

Back in North America the US rig count is slowly creeping upwards, while Canada's is trending opposite