Oil price discussion and analysis

[Smurf1976]

Re: OIL AGAIN!

Accordingly, if new data is not showing inventory builds from a year ago, then the US will be in diabolicals when, eventually, its economy does recover.
...

Only then would we have a meaningful global surplus of oil for an extended period, before the rot truly settles in (and the oil price takes off again).

I am unable to post more details due to confidentiality reasons so you'll have to take (or ignore) my word for it but:

It is my understanding that a significant and credit worthy organisation has found itself unable to obtain a substantial but not huge quantity (multiple full road tanker loads) of bitumen at any price from one of the major oil companies because they don't have, and can not get, enough of it.

I've long thought that we'd see storage run to zero at some point. With at least one product in one Australian state that seems to already have happened. Odds are that won't be the only product or location where stocks are running low.

 

[Kauri]

Re: OIL AGAIN!

The U.S. Minerals Management Service said Saturday 998,000 of 1.3 million barrels per day (bpd) of oil production (76.8%) and 2.75 BLN of 7.4 BLN cubic feet per day of gas (Bcfd) production (37.2%) had been shut in anticipation of Gustav. That is up from 6.62% of oil and 1.84% of gas Friday. CNN reports that energy producers have shut in approximately 77% of oil output and 37% of natural gas production in the Gulf of Mexico. Most of the shut-in production is unlikely to return before the end of next week. According to the report, nearly 1 MLN barrels of daily oil production is now shut down. The last time this happened was in November 2005, after Hurricanes Katrina and Rita. In addition, 2.75 BLN cubic feet of daily natural gas production is now shut down.
Traders on the floor of NYMEX noted on Friday that crude futures actually moved substantially lower before Katrina hit only to surge higher when the storm finally arrived. The near-total shutdown of offshore oil and gas production is likely to last through the end of next week, even if Gustav causes little damage. Producers must fly workers back to offshore installations by helicopter, a process that can take days. Platforms also take several days to return to full output.

Now.. oil and the Dow/SP500.. what relationship.. or dare I say coupling.. do they have??

Cheers
............Kauri

MMMmmmm
...................Kauri

 

[Whiskers]

Re: OIL AGAIN!

Gustav's a bit of a fizzer, looks like it's not intensifyiny.

Probably be close to 109/10 in a day or two... leg iii of 5.

Shaping up for a bit of support just above 100... end of wave 5... wave A?

 

[Whiskers]

Re: OIL AGAIN!

Gustav's a bit of a fizzer, looks like it's not intensifyiny.

Probably be close to 109/10 in a day or two... leg iii of 5.

Shaping up for a bit of support just above 100... end of wave 5... wave A?

Not sure whether wave iii completed and got in a whippy iv today or iii is extending... either way 100 is about to come under pressure.

 

[Kauri]

Re: OIL AGAIN!

Not sure whether wave iii completed and got in a whippy iv today or iii is extending... either way 100 is about to come under pressure.

your'not alone... a negative forecast from one of the leading New York energy analysts impaired overnight sentiment. The forecast that oil prices could hit $70-80 bbl over the next six months irrespective of a probable OPEC production cut next week helped drive oil back down from yesterday afternoon's $110.50 peak

cheers
...........Kauri

 

[numbercruncher]

Re: OIL AGAIN!

$107.76 at last check !

Can we get under 100 tonight ??


No oil shortages , maybe soem refinery shortages , but we got Oil coming out our ears and leaps in technology to smash demand in coming years .....

Oil bulls need a war now more than ever !

 

[jonojpsg]

Re: OIL AGAIN!

$107.76 at last check !

Can we get under 100 tonight ??


No oil shortages , maybe soem refinery shortages , but we got Oil coming out our ears and leaps in technology to smash demand in coming years .....

Oil bulls need a war now more than ever !

World oil production (mmbopd world oil demand (mmbopd) POO 2004 83.10 82.33
2005 84.58 83.65 50
2006 84.54 84.70 58
1Q 07 83.96 85.52
2Q 07 84.20 84.65
3Q 07 84.27 85.23
4Q 07 85.32 86.75
Av 84.44 85.54 64
1Q 08 85.38 85.69 97

Hey numbercruncher, how about you crunch these numbers!! Doesn't look like oil coming out our ears to me. Even with declining US & other developed countries demand, I think developing countries, esp China, increases are going to outdo these.

Only points one way to me! Read my post on Peak Oil and then we'll see what happens when countries with only marginal export capacity and increasing demand decide to stop exporting and start stockpiling!!!

 

[BentRod]

Re: OIL AGAIN!

Oil bulls need a war now more than ever !

They already had one....oil sold off:

 

[rederob]

Re: OIL AGAIN!

LAst week US oil inventory data was propped up slightly by inflows from the SPR after Gustav shut-in Gulf output.
Gulf output is presently around 10% of capacity, which means about a million barrels a day are still shut-in.
The Gulf remains at risk of further weather disruptions:
A twist in Hurricane Ike's path set it west-southwest overnight after earlier suggesting it would run up the Florida panhandle. Right now it's on a trajectory that puts it on a landfall point to the east of Gustav, but it really is too early to take bets.
What it means is that the imminent return of personnel to Gulf rigs and platforms may be on hold for another week.
Presently funds are playing with the USD in preference to oil, but as cycles go, this one is nearing an end. An interesting aside is that almost $20 of oil's price demise is directly attributable to USD strength after oil peaked some months back.
While $100 oil is strongly in play for now, the other reality is that inventory builds across the globe are failing to happen. The funds will be reluctant to dip into oil while economic weakness pervades the markets, although they will also recognise that downside risks from here are at price margins.
From a long term perspective the oilers are well priced again, yet short term a bit more can whittle off their tops. Still a time to watch rather than buy, as the bottom has not set-in.

 

[rederob]

Re: OIL AGAIN!

Hurricane Ike was heading up the Florida panhandle when I posted the other day: It's now on a path that will put it south of New Orleans in 5 day's time, with a chance it will head northwards thereafter.
Ike was originally forecast to follow close on Hanna's track but has deviated south-westerly and on consensus trends will head into the Gulf of Mexico, and possibly intensify further unless it downgrades substantially as it passes over Cuba tonight/tomorrow.
What is interesting about Ike is that keeps moving out of its forecast window, making it difficult to work out when it will landfall in USA. If it stays on its present path it will move into an area riddled with rigs and platforms, and may do as much damage as Katrina did 3 years ago.
I again expect that the SPR will release a near-equivalent amount of oil to that shut-in as Ike moves into the Gulf. While this may reduce the chance of oil spiking, the main lookout will be on possible rig damage, and impacts on refining capacity.
Either way, oil's move to $100 will be on hold for a few more weeks unless US inventories show signs of improvement.

 

[jonojpsg]

Re: OIL AGAIN!

What, noone going to comment on my figures showing world demand exceeding supply for the last two years and extremely unlikely to go back to the good old days??!!

 

[Whiskers]

Re: OIL AGAIN!

What, noone going to comment on my figures showing world demand exceeding supply for the last two years and extremely unlikely to go back to the good old days??!!

Why? Ya want an arguement about them do yer?

I think there's more at work here than simply just supply and demand. The oil cartel is trying to balance between keeping a strangle hold on the supply of oil and continuing to make a good profit while watching their industry probably starting to give way to alternative energy sources, and not to mention a lot of 'horse trading' power politics.

All the surveys I've seen show people are overwhelmingly going to continue to save 'oil' and switch to more economical vehicles even if the price comes back. The oil producers would no doubt be noticing such surveys too.

In the short term, I think there will be some consolidation around 100 to maybe 120 for a couple of weeks not necessairly because of, but coinciding with the hurricanes as rederob points out, before it ultimately falls further.

 

[rederob]

Re: OIL AGAIN!

This map show's Ike's likely path over the coming week.
You can see it's headed smack into the oil rig/platform region off southern US states.
I expect that by tomorrow most oil and gas in the Gulf will be again shut-in, halting inventory builds for another week.
The oil price saviour is GWB and his oil mates releasing oil to the domestic market through the SPR.

 

[Kauri]

Re: OIL AGAIN!

Oil and crude contracts have gone bid after the news that a 6.1 magnitude earthquake struck southern Iran. The quake has hit near Bandar Abbas, site of a major Iranian oil refinery, with Iran"s state-owned TV describing the tremor as "strong". No casualties have been reported but prices are back on the rise in the wake of the news

Cheers
............Kauri

 

[rederob]

Re: OIL AGAIN!

With OPEC cutting back on output by a half million barrels a day and Hurricane Ike moving closer to the US coast it looks as though $100 oil will not be breached on closing prices for a little while longer.
Ike has slowed considerably today and is quickly decreasing in pressure, which means it's intensifying in strength, again. Forecasters put Ike at a category 2 within 24 hours, with a strong probability of category 3 being reached, and a chance at category 4 in the next few days.
While intensity will be important when Ike crosses the coast, the more critical aspect of its life is its direction. Although consensus forecasts put Ike as a safe crossing on the Texas coast in about 3 days, the history of September hurricanes shows a very high probability of a sharp north turn, rather than a steady norwesterly path.
Ignoring the forecasters, my preference is for Ike to dwell a little longer than expected nearby Cuba and intensify into a category 3 before following a path more north-reaching than projected below. Having viewed September Hurricane paths, I think a coastal crossing in Louisiana is a reasonable chance.

 

[Kauri]

Re: OIL AGAIN!

I've seen a touch of COT talk on tother treads doin the rounds... here's a tad more..
$49bn "non- commercial" interests have bowed out of the oil futures markets, and prices collapsed 30%.... hey "welcome back Kotters".. just reinforces for me that trading the chart is the only way to travel... I love the news and data... butt it usually follows the moves.. I thunk anyways... and thunks Joe for opening the gates..

Slainte
.............Kauri

 

[CAB SAV]

Re: OIL AGAIN!

Yikes. Or should I say Ike's. Hurricane Ike hasn't had the attention in regards to oil/gasoline disruption as most concentration is on the Lehman's etc. and oil prices will keep coming down forever.
Fed's better "oil" up the money printing machine, Ike is going to cost a "fist full of dollars".

 

[wayneL]

Re: OIL AGAIN!

You heard it here first:

Spot NYMEX Crude is < $100

Has traded as low as $98.50

Demand Destruction??

 

[rederob]

Re: OIL AGAIN!

You heard it here first:

Spot NYMEX Crude is < $100

Has traded as low as $98.50

Demand Destruction??

Given that demand destruction was just kicking in at plus $140 it's hardly likely to be important at sub$100.
Last time I looked at the window another wall crumbled onto the street and melted into a subprime mire.
Stories are neatly packeaged into beginning, middle and end.
The beginning was just on a year ago and ended with with Lehman's collapse. The middle began with AIG's demise a few day's ago and will end when the gold price trends sharply down.
The end will be marked with a quarter on quarter turnaround in the US housing market. I think we are looking at 2010, or later.

 

[rederob]

Re: OIL AGAIN!

US oil inventories and petroleum stocks are down considerably after Ike and the next report will still include data reflecting refinery constraints. So I expect some steadiness around current price levels for the near term.