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Oil price discussion and analysis
- Thread starter wayneL
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Re: OIL AGAIN!
http://www.oil-price.net/
2008 oil recap. and what is next by Steve Austin - 2009/01/05
It took only 5 months for the price of oil to plummet from $150 to under $40 in the second part of the year. Meanwhile oil consumption did not even decrease 10%, so what is the real cause of this collapse you may ask?
Hedge funds. Let me explain.
During the first part of 2008, Western economies were already slowing down noticeably and hedge funds gradually pulled trillions of dollars out of the market and parked them in energy ETFs. At the time Chindia's insatiable thirst for oil and the "decoupling" of east/west economies had many believe commodities were a "sure thing", a sound enough tangible insurance to protect overinflated assets scavenged from made-up bubbles. On top of that, by using leverage, profits were multiplied as oil went up, not a bad deal in a recession.
But when the banking industry collapsed, hedge funds had to raise cash by "deleveraging", liquidating their leveraged energy ETF positions sending the price of oil tumbling. Anecdotally shorting of banking ETFs was suspended by the US Securities Commission during that time but not shorting of energy prices, and the leverage mania soon found an escape route in utrashort oil ETFs, compounding the speed of this downward spiral. By December 2008 the oil price had collapsed 75% and frankly, who would complain about cheap gas these days?
As we enter 2009 the oil landscape has reversed dramatically from a year ago. The price of oil is lower than production costs and new exploration projects are being cancelled. China flush with cash is currently buying all the oil it can get its hands on to pump into its strategic reserves. Once arrogant OPEC countries are willing to sell oil at any price to fund government programs and prevent political instability.
One constant however is the depletion of major oil fields, worse than predicted at 9.1% year over year as we close 2008. It's a matter of when not if the economy recovers and when it does, expect a strong bounce back in the price of oil.
http://www.oil-price.net/
2008 oil recap. and what is next by Steve Austin - 2009/01/05
It took only 5 months for the price of oil to plummet from $150 to under $40 in the second part of the year. Meanwhile oil consumption did not even decrease 10%, so what is the real cause of this collapse you may ask?
Hedge funds. Let me explain.
During the first part of 2008, Western economies were already slowing down noticeably and hedge funds gradually pulled trillions of dollars out of the market and parked them in energy ETFs. At the time Chindia's insatiable thirst for oil and the "decoupling" of east/west economies had many believe commodities were a "sure thing", a sound enough tangible insurance to protect overinflated assets scavenged from made-up bubbles. On top of that, by using leverage, profits were multiplied as oil went up, not a bad deal in a recession.
But when the banking industry collapsed, hedge funds had to raise cash by "deleveraging", liquidating their leveraged energy ETF positions sending the price of oil tumbling. Anecdotally shorting of banking ETFs was suspended by the US Securities Commission during that time but not shorting of energy prices, and the leverage mania soon found an escape route in utrashort oil ETFs, compounding the speed of this downward spiral. By December 2008 the oil price had collapsed 75% and frankly, who would complain about cheap gas these days?
As we enter 2009 the oil landscape has reversed dramatically from a year ago. The price of oil is lower than production costs and new exploration projects are being cancelled. China flush with cash is currently buying all the oil it can get its hands on to pump into its strategic reserves. Once arrogant OPEC countries are willing to sell oil at any price to fund government programs and prevent political instability.
One constant however is the depletion of major oil fields, worse than predicted at 9.1% year over year as we close 2008. It's a matter of when not if the economy recovers and when it does, expect a strong bounce back in the price of oil.
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Re: OIL AGAIN!
Thanks for that agentm,
I work in mechanical design and drafting for the oil and gas industry and it is just flat out as normal, not enough hrs in a week.
Keeping a close eye on oil waiting for the (main) upswing again, meanwhile been having a ball with the swings.
Thanks for that agentm,
I work in mechanical design and drafting for the oil and gas industry and it is just flat out as normal, not enough hrs in a week.
Keeping a close eye on oil waiting for the (main) upswing again, meanwhile been having a ball with the swings.
Re: OIL AGAIN!
Worth a look at this chart from this link
http://www.safehaven.com/article-12380.htm
"Yellow gold vs crude black gold, who's ready for a rally"
Bounce from long term support and off the 200 MA.
and this one useful to indicate lots of volume
Worth a look at this chart from this link
http://www.safehaven.com/article-12380.htm
"Yellow gold vs crude black gold, who's ready for a rally"
Bounce from long term support and off the 200 MA.
and this one useful to indicate lots of volume
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Re: OIL AGAIN!
Thanks for the link & charts
Thanks for the link & charts
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Re: OIL AGAIN!
i follow the price of oil as i need it a touch higher for one of my major investments to be able to be economic. (chalk/shale horizontal drilling)
my personal feeling is that its closer to bottom if not showing signs of a bounce back up.. the graphs above seem to point to it as well imho. great stuff sinner
i follow the price of oil as i need it a touch higher for one of my major investments to be able to be economic. (chalk/shale horizontal drilling)
my personal feeling is that its closer to bottom if not showing signs of a bounce back up.. the graphs above seem to point to it as well imho. great stuff sinner
Re: OIL AGAIN!
Me three. Altough we have all been happy about the oil price at the bowser, there are clearly numeorus projects that have been put on hold or even profits at levels that are impacting heavily on the S.P. of many junior oil and gas stocks.
A happy medium in the oil price would make me happy as well!
Regards
bazollie
Me three. Altough we have all been happy about the oil price at the bowser, there are clearly numeorus projects that have been put on hold or even profits at levels that are impacting heavily on the S.P. of many junior oil and gas stocks.
A happy medium in the oil price would make me happy as well!
Regards
bazollie
Re: OIL AGAIN!
Hi everyone,
Thanks for the charts and interpretations.
I too, own quite a few Oil & Gas stocks, and have accumulated some recently.
I have a relative who works in the Oil & Gas storage industry in Singapore.
He is still saying that there are lots of ships (super tanker carriers) that have not been utilized in the last couple of months. Many ship owners are NOT running their ships as the cost of running it is huge. So, it's ships @ dry docks in Singapore and else where.
I guess , if the predictions and the stochastics and MACD is correct, we should be able to see some movement soon.
Sorry, I don't have much to contribute except the bit on the ship in the dry dock. Let's hope the ships will be OUT at the seas soon................
Agathos......
Hi everyone,
Thanks for the charts and interpretations.
I too, own quite a few Oil & Gas stocks, and have accumulated some recently.
I have a relative who works in the Oil & Gas storage industry in Singapore.
He is still saying that there are lots of ships (super tanker carriers) that have not been utilized in the last couple of months. Many ship owners are NOT running their ships as the cost of running it is huge. So, it's ships @ dry docks in Singapore and else where.
I guess , if the predictions and the stochastics and MACD is correct, we should be able to see some movement soon.
Sorry, I don't have much to contribute except the bit on the ship in the dry dock. Let's hope the ships will be OUT at the seas soon................
Agathos......
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Re: OIL AGAIN!
Cheers, and this begs the question on fallen demand.
Have the traders got it right?????
It's a fact that demand has fallen and US oil inventories are on the rise
The brokers that I'm hearing are pointing to a $32 bottom resistance Test. But surely fundamentals like population and car ownership growth and heating requirements and OPEC cuts.....have me thinking that up is the only way to go.
Wishful thinking I suppose but we'll see
Cheers, and this begs the question on fallen demand.
Have the traders got it right?????
It's a fact that demand has fallen and US oil inventories are on the rise
The brokers that I'm hearing are pointing to a $32 bottom resistance Test. But surely fundamentals like population and car ownership growth and heating requirements and OPEC cuts.....have me thinking that up is the only way to go.
Wishful thinking I suppose but we'll see
Re: OIL AGAIN!
Try nymex.com for charts, keep in ming warehouse inventories in the US are still 1.9% overstocked, this is even with a blisteringly cold winter in the US.
I would say by autumn here there will be a significant rally, but untill then its choppy waters.
Try nymex.com for charts, keep in ming warehouse inventories in the US are still 1.9% overstocked, this is even with a blisteringly cold winter in the US.
I would say by autumn here there will be a significant rally, but untill then its choppy waters.
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Re: OIL AGAIN!
what n1,n2 and n3 figures are you using Sinner , are they the default 12,26 and 9 or something else, thanks .
what n1,n2 and n3 figures are you using Sinner , are they the default 12,26 and 9 or something else, thanks .
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Re: OIL AGAIN!
I can't provide firm proof of this, but there's a lot of anecdotal evidence emerging that US natural gas drilling has basically fallen off a cliff in the aftermath of the financial crisis and oil price plunge.
US gas supply depends significantly on small wells that deplete rapidly so this suggests that production will fall in the not too distant future.
What it means for price obviously depends on demand, but it's a situation worth watching in my opinion.
I can't provide firm proof of this, but there's a lot of anecdotal evidence emerging that US natural gas drilling has basically fallen off a cliff in the aftermath of the financial crisis and oil price plunge.
US gas supply depends significantly on small wells that deplete rapidly so this suggests that production will fall in the not too distant future.
What it means for price obviously depends on demand, but it's a situation worth watching in my opinion.
Re: OIL AGAIN!
How do I find spot prices at Nymex? All I can see are prices for futures contracts.
Thanks for the reminder. I'm starting my preparation now because I feel there are easy opportunities from the long side in the medium term, not planning to do a "idea today, trade tomorrow" thing.
How do I find spot prices at Nymex? All I can see are prices for futures contracts.
CanOz
Home runs feel good, but base hits pay bills!
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Re: OIL AGAIN!
Spot month for light crude is CLH9.
You can find a chart here:
www.futuresource.com
Look for Light Crude Oil.
CanOz
Spot month for light crude is CLH9.
You can find a chart here:
www.futuresource.com
Look for Light Crude Oil.
CanOz
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CanOz
Home runs feel good, but base hits pay bills!
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CanOz
Home runs feel good, but base hits pay bills!
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Re: OIL AGAIN!
We can see a bounce in crude oil till $62 bbl in a week or two. Crude Oil is once again going to move towards its high.
We can see a bounce in crude oil till $62 bbl in a week or two. Crude Oil is once again going to move towards its high.
Re: OIL AGAIN!
Thanks. I guess I should have clarified about spot prices. What I want is cash price over the years, so that if I want to know the lowest price in the past 10 years, I can look at the chart and find it.
