Oil price discussion and analysis

[Tysonboss1]

Re: OIL AGAIN!

This was posted in another forum. What do you think wayneL?

May I say I think you are completely wrong,

I don't believe oil will ever be below $65 a barrel ever again.

Visit the thread below and you will see some very alarming charts that piont that the price of crude will only be going up.


http://www.propertyinvesting.com/forums/community/opinionated/4322125

 

[BREND]

Re: OIL AGAIN!

OPEC may be rising oil production.

 

[Aussiejeff]

Re: OIL AGAIN!

OPEC may be rising oil production.

I have two observations on the above...

(1) If GWB attacks Iran, that news won't have much hope of stopping a rocket under the price.

(2) OPEC are running almost flat-strap as it is. Any hiccups in production facilities after OPEC raises output to whatever level they think they can sustain in the short term and the price will leap....

AJ

 

[BREND]

Re: OIL AGAIN!

I have two observations on the above...

(1) If GWB attacks Iran, that news won't have much hope of stopping a rocket under the price.

(2) OPEC are running almost flat-strap as it is. Any hiccups in production facilities after OPEC raises output to whatever level they think they can sustain in the short term and the price will leap....

AJ

Short oil futures does not need a long term view. You can check out my crude oil recommendation in my blog.

And shorting oil futures does not mean that I'm bearish on oil in the long run.
I'm bullish on oil in the long term, I have invested in oil rigs and oil-related companies for years.

 

[Aussiejeff]

Re: OIL AGAIN!

Well, the dumping of carry trades in gold and oil commodities overnight might pull the rug from under the oil price in the short term, but it appears from this news that your tip about raising output is not on the agenda yet....


"OPEC Won't Raise Output at Summit, Gulf Officials Say (Update1)

By Fred Pals and Tarek Al-Issawi

Nov. 12 (Bloomberg) -- OPEC, the producer of more than 40 percent of the world's oil, has no plan to discuss raising production targets at its Heads of State Summit in Riyadh on Nov. 17-18, oil officials from Iran and a Persian Gulf state said.

The Organization of Petroleum Exporting Countries won't discuss raising supply at the summit and will instead discuss that during a Dec. 5 ministerial-level meeting in Abu Dhabi, United Arab Emirates, Iran's OPEC governor, Hossein Kazempour Ardebili, told the state-run Islamic Republic News Agency today.

Separately, another oil official from a Persian Gulf state said by telephone today there was no plan to discuss or decide changes to production targets at the Riyadh summit, and that any such decision, should there be one, would wait until Dec. 5. "


AJ

 

[Tysonboss1]

Re: OIL AGAIN!

The truth is that Opec really can't raise oil production,...

there really is not many oil feilds in the middle east that are not running 24/7 already.

even if they did find some way to produce more,... it just means that the the other side of the "peak" will be much steeper,

 

[BREND]

Re: OIL AGAIN!

Saudi Oil Minister Ali al-Naimi said the Organization of Petroleum Exporting Countries will discuss output at a ministerial-level meeting in Abu Dhabi, United Arab Emirates, on Dec. 5. Saudi Arabia is the group's largest producer and the world's top oil exporter.

It looks as if OPEC will at least consider increasing oil production at the 5th of December OPEC conference. And if oil production is raised during the meeting on 5th of December, we are likely to see oil price falling below $90.

 

[rederob]

Re: OIL AGAIN!

It looks as if OPEC will at least consider increasing oil production at the 5th of December OPEC conference. And if oil production is raised during the meeting on 5th of December, we are likely to see oil price falling below $90.

BREND
How many oil producers do you think are holding back production with oil prices at record highs?
My guess is none - although the Saudis may have some spare sour oil.
Assuming they could turn on a tap and more oil flows, exactly where do the extra supertankers appear from - we're talking about 30 more Suezmax vessels hitting the seas?
That said, producers can often eke out marginal extra output for short periods - but it's not a desirable way to run things in an industry fraught with safety concerns. And it's not going to be a long term solution.
The run up to and over $90/bbl should have been short and sweet.
Currently it is more enduring than most expected.
This does not augur well for global economies.

 

[Smurf1976]

Re: OIL AGAIN!

BREND
How many oil producers do you think are holding back production with oil prices at record highs?
My guess is none - although the Saudis may have some spare sour oil.
Assuming they could turn on a tap and more oil flows, exactly where do the extra supertankers appear from - we're talking about 30 more Suezmax vessels hitting the seas?
That said, producers can often eke out marginal extra output for short periods - but it's not a desirable way to run things in an industry fraught with safety concerns. And it's not going to be a long term solution.
The run up to and over $90/bbl should have been short and sweet.
Currently it is more enduring than most expected.
This does not augur well for global economies.

Basically agreed.

And if output is pushed beyond sustainable limits then in due course it leads to serious damage to the oilfields with water breakthroughs etc.

But as for it being more enduring than most expected, the operative word is "most". Those who have been aware of the situation and predicting problems for quite some time (I'm one of them) aren't in the slightest bit surprised. Just as we won't be surprised when shortages start to appear - but again the markets etc will be "surprised".

Demand continues to rise. Production is flat for two and a half years. WHERE is that oil to meet demand coming from? Someone emptying above ground stocks, or at least ceasing to fill them, is the only plausible explanation. At some point that must end - just watch the oil price fly when it does.

How long it can continue is anyone's guess but steadily increasing the drawdown of a diminishing inventory isn't sustainable that's for sure. IMO we're trying to maintain business as usual as long as possible. Then at some point we suddenly have no option but to cut consumption back to the (very slowly declining) rate of production. That's when the real trouble starts...

The debate about peak oil isn't about if it will happen. Few dispute that. The debate is about whether or not we saw the peak two and a half years ago or whether we'll see another, higher, peak at some point in the future.

What I'm more worried about though is not a fuel shortage, but what happens when the masses realise that there's a problem. Odds are that won't be until they can't buy petrol at ANY price because the tanks are dry. And nobody alive knows the exact state of affairs on a global basis - that's the greatest danger.

 

[BREND]

Re: OIL AGAIN!

Basically agreed.

And if output is pushed beyond sustainable limits then in due course it leads to serious damage to the oilfields with water breakthroughs etc.

But as for it being more enduring than most expected, the operative word is "most". Those who have been aware of the situation and predicting problems for quite some time (I'm one of them) aren't in the slightest bit surprised. Just as we won't be surprised when shortages start to appear - but again the markets etc will be "surprised".

Demand continues to rise. Production is flat for two and a half years. WHERE is that oil to meet demand coming from? Someone emptying above ground stocks, or at least ceasing to fill them, is the only plausible explanation. At some point that must end - just watch the oil price fly when it does.

How long it can continue is anyone's guess but steadily increasing the drawdown of a diminishing inventory isn't sustainable that's for sure. IMO we're trying to maintain business as usual as long as possible. Then at some point we suddenly have no option but to cut consumption back to the (very slowly declining) rate of production. That's when the real trouble starts...

The debate about peak oil isn't about if it will happen. Few dispute that. The debate is about whether or not we saw the peak two and a half years ago or whether we'll see another, higher, peak at some point in the future.

What I'm more worried about though is not a fuel shortage, but what happens when the masses realise that there's a problem. Odds are that won't be until they can't buy petrol at ANY price because the tanks are dry. And nobody alive knows the exact state of affairs on a global basis - that's the greatest danger.

I think you all have mistaken, I already said that I'm bullish on oil in the long term. But that does not stop me from making money by shorting oil futures. Oil price has run up too fast and too steep, its due for a correction.

I'm an investor for Tranocean Inc (RIG), the biggest oil rig supplier in the world.

 

[Aussiejeff]

Re: OIL AGAIN!

I think you all have mistaken, I already said that I'm bullish on oil in the long term. But that does not stop me from making money by shorting oil futures. Oil price has run up too fast and too steep, its due for a correction.

I'm an investor for Tranocean Inc (RIG), the biggest oil rig supplier in the world.

You got the short term correction right!


Cheers,

AJ

 

[BREND]

Re: OIL AGAIN!

You got the short term correction right!


Cheers,

AJ

Yippie! Oil price down $3 last night.
Praise the Lord!

 

[dj_420]

Re: OIL AGAIN!

Yippie! Oil price down $3 last night.
Praise the Lord!

With oil having fallen quite a bit from its highs of $98 barrel I am tempted to go long again. What price frame are you looking at to go long BREND?

I might just try and catch some intraday movements until we find out what demand is doing, although it is certainly less volatile after that decrease in price. Do you trade current months or futures that fall in later months?

I think if we see demand slacken off again then a drop to the high 80's would be justified. It depends on the report of US demand which has been delayed by one day.

 

[dj_420]

Re: OIL AGAIN!

From todays chart oil has consolidated nicely between 91.25 and 91.50, it was trending nicely in that channel and then broke out to higher trading channel. Showed some consolidation here and has broken out again above 91.65 ish.

Looks good for a price rise tonight IMO with demand expected to rise, Im currently long on oil from that breakout of the higher trading channel.

 

[dj_420]

Re: OIL AGAIN!

Stopped out, seemed to be a false breakout, it seems volatility is returning to oil again, if it breaks short term support at 91.25 could go next leg down, found short term support around 90.20 ish earlier.

Could this article have something to do with it?

A lot of people feel price of oil has been pushed way to high from speculation. I suppose if US dollar strengthens also or looks like it will stage a recovery oil prices will come off.

http://www.theglobeandmail.com/servlet/story/LAC.20071114.IBENERGYOPEC14/TPStory/TPBusiness/Africa/

 

[Smurf1976]

Re: OIL AGAIN!

I think you all have mistaken, I already said that I'm bullish on oil in the long term. But that does not stop me from making money by shorting oil futures. Oil price has run up too fast and too steep, its due for a correction.

I'm an investor for Tranocean Inc (RIG), the biggest oil rig supplier in the world.

Not mistaken, just a different time perspective. I'm a long term investor (years) and not interested in day to day trading, hence I take a long term view of the oil price.

Nothing wrong with short term trading of course and if you're doing that then obviously you do want to be looking out for the drops in price when they come.

 

[BREND]

Re: OIL AGAIN!

With oil having fallen quite a bit from its highs of $98 barrel I am tempted to go long again. What price frame are you looking at to go long BREND?

I might just try and catch some intraday movements until we find out what demand is doing, although it is certainly less volatile after that decrease in price. Do you trade current months or futures that fall in later months?

I think if we see demand slacken off again then a drop to the high 80's would be justified. It depends on the report of US demand which has been delayed by one day.

I think its too early to be bullish on oil price in the short term.
Tomorrow's inventory level may cause some volatility, but the crucial part is still result of OPEC meeting in December.

My next trading strategy is going long on S&P500 futures, you can check out the details in my blog.

 

[rederob]

Re: OIL AGAIN!

I think its too early to be bullish on oil price in the short term.
Tomorrow's inventory level may cause some volatility, but the crucial part is still result of OPEC meeting in December.

My next trading strategy is going long on S&P500 futures, you can check out the details in my blog.

BREND
I guess if you are trading then our daily posts make little difference to anyone's decision making processes.
Smurf recognises, rightly, that crude output peaked in 2005 and has since been flat. The "oil" supply gap has been filled by natural gas liquids and oil sands.
However, presently we are seeing supply declines in so many mature oilfields that expected output appears to have been miscalculated.
Accordingly, the "gap fillers" need to ramp up output more significantly that anyone has forecast.
And the clincher here is that investment decisions needed to be made many years ago in order to ensure adequate future supply, because the oil tap takes year to tum on, not weeks or months.
Going into the northern summer, US has adequate "gas" (petrol) inventories, but is already tight on heating oils. Should it be a harshly cold winter, the chances of inventory being adequate are not good: The US has not built a new oil refinery in almost 30 years and capacity expansions don't look like cutting it.
Moreover, with Asian demand increasing more rapidly than that for the US, it is possible that they get preference of supply. You see, it's cheaper to ship oil to China than the US, so if Asian buyers matched the bids from US customers, the shippers make more delivering to Asia.
In a world of extremely tight supply, diverting one VLCC (very large Crude carrier) to Asia would take away 2 millions barrels of crude from the US market.
That's enough to send an even bigger shiver to Americans suffering a bleak,
cold winter over coming months.

But I digress.
I believe peak oil is now upon us.
2008 will, at best, see some price relief based solely on demand destruction that will consistently occur henceforth.
That said, there is still plenty of oil.
It just won't be produced quickly, or cheaply, anymore.
I am therefore going long term bullish copper as "electric" transport options based on gas, coal, renewables and nuclear power become the new paradigm.

 

[BREND]

Re: OIL AGAIN!

BREND
I guess if you are trading then our daily posts make little difference to anyone's decision making processes.
Smurf recognises, rightly, that crude output peaked in 2005 and has since been flat. The "oil" supply gap has been filled by natural gas liquids and oil sands.
However, presently we are seeing supply declines in so many mature oilfields that expected output appears to have been miscalculated.
Accordingly, the "gap fillers" need to ramp up output more significantly that anyone has forecast.
And the clincher here is that investment decisions needed to be made many years ago in order to ensure adequate future supply, because the oil tap takes year to tum on, not weeks or months.
Going into the northern summer, US has adequate "gas" (petrol) inventories, but is already tight on heating oils. Should it be a harshly cold winter, the chances of inventory being adequate are not good: The US has not built a new oil refinery in almost 30 years and capacity expansions don't look like cutting it.
Moreover, with Asian demand increasing more rapidly than that for the US, it is possible that they get preference of supply. You see, it's cheaper to ship oil to China than the US, so if Asian buyers matched the bids from US customers, the shippers make more delivering to Asia.
In a world of extremely tight supply, diverting one VLCC (very large Crude carrier) to Asia would take away 2 millions barrels of crude from the US market.
That's enough to send an even bigger shiver to Americans suffering a bleak,
cold winter over coming months.

But I digress.
I believe peak oil is now upon us.
2008 will, at best, see some price relief based solely on demand destruction that will consistently occur henceforth.
That said, there is still plenty of oil.
It just won't be produced quickly, or cheaply, anymore.
I am therefore going long term bullish copper as "electric" transport options based on gas, coal, renewables and nuclear power become the new paradigm.

That's right, I'm bullish on oil in the long term. Looking to add on to my Tranocean Inc holdings if price goes lower.

The best time to go long on copper is end of Dec or early Jan, that is when demand for copper is at its most quiet stage.

And usually rise during Chinese New Year period, this is because funds will come in and accumulate long positions in copper before Chinese merchants start to buy copper inventory for their operation.

But I'm bullish on BHP Billiton, Rio Tinto, CVRD all year round. See the difference again? Trader for futures, but investor for equities.

 

[rederob]

Re: OIL AGAIN!

A short term look at oil suggest that it really cannot sustain itself in the plus$90 range.
That might sound good, but how does it look?
Tracking oil's trend over the past 3 years suggests that if it is to regain its former glory, then it presently remains underdone.
Below I have simply added a channel it could follow, were it to be truly bullish.
In fact, being under $100/bbl places it below trend!
So reaching $100 will be a formality - could even be tonight.
The question is what will oil average next year.
My view is that oil will average at least $120 in calendar 2008.
My suspicion is that I have underestimated.
Certainly, if POO returns to its trend channel next year, then a much higher average price is inevitable.