Oil price discussion and analysis

[burglar]

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 to their reserves!


Read more:
http://www.csmonitor.com/Environmen...-have-80-percent-of-the-world-s-oil-Maybe-not

 

[Smurf1976]

Re: OIL AGAIN!

An awful lot of people from the likes of governments through to individuals have tried to work out the truth on OPEC reserves.

In short, my own conclusion (after rather a lot of research) is that "official" reserves as stated are actually "total discovered and economically recoverable" reserves. That is, the total amount of oil they have found to date and which can be extracted profitably (bearing in mind that the definition of "profitably" becomes interesting when you have the ability to control the selling price of the product).

So if you take the "official" reserves and deduct cumulative production then you'll have a rough figure for what they have left. Suffice to say that the difference is significant.

Also, the quality of the oil is not taken into account. That is, they don't differentiate between heavy sour (thick with lots of sulphur) oil versus light sweet (what the refineries prefer). That's a bit like discussing your gold stockpile and saying you have 100 tonnes of metal, conveniently neglecting to mention that 50 tonnes of that is copper and most of the rest is lead. It creates an impression not matched with reality.

My "gut feel" says that this seems plausible although I certainly don't have any firm proof. I do know that many others have reached similar conclusions, but again there is no real way of proving it. The odds are that we'll never know - any actual oil shortage will be attributed to anything from environmental protection through to payment disputes. You're not likely to turn on the evening news one day and find there's an announcement from the Saudi's that they've peaked. (That said, Kuwait has sort-of made such an announcement some years ago which itself speaks volumes as to the overall supply situation....)

 

[DB008]

Re: OIL AGAIN!

Saw this on the BBC, can't remember if I posted it on ASF.

Petrol from air: Will it make a difference?

An idea has hit the news on Friday to produce petrol from air and water - removing CO2 from the atmosphere, combining it with hydrogen split from water vapour and turning it into a fuel that can go straight back into the petrol tank.

It's like combustion in reverse, and in essence it is what powers plants: CO2 and water in, energy-rich sugar molecules out.

But in matters of energy, nothing comes for free.

Just as plants need sunlight to pull off the trick, Air Fuel Synthesis, the firm profiled in the UK's Independent newspaper, need to use good old-fashioned electric energy to pull off theirs.

As with any novel fuel production or energy storage method, it is the numbers that matter: efficiency is king.

http://www.bbc.co.uk/news/science-environment-20003650

 

[DB008]

Re: OIL AGAIN!

Could this put downward pressure on oil prices???

Fracking Pushes U.S. Oil Production to Highest in 20 Years

U.S. oil production exceeded 7 million barrels a day for the first time since March 1993 as improved drilling techniques boosted exploration across the country and reinforced a shift toward energy independence.

Bloomberg

 

[boofis]

Re: OIL AGAIN!

well it certainly dropped sweet light crude after the announcement last night if nothing else lol.

 

[CanOz]

Re: OIL AGAIN! - Spread Trading

Has anyone here considered the spread play between Brent and WTI lately?

I'm just updating my data to see if there is an ETF for both, but i was thinking there could be a trade in shorting Brent and going long on WTI?

SKC, might be something up your alley?



CanOz

 

[DB008]

Re: OIL AGAIN!

The US will be self-sufficient in energy by 2030, with only 1% coming from imports, the company's analysts predict

Peak oil theories 'increasingly groundless', says BP chief

The US will be self-sufficient in energy by 2030, with only 1% coming from imports, the company's analysts predict

http://www.guardian.co.uk/environment/2013/jan/16/peak-oil-theories-groundless-bp

The only thing that comes to mind, if the price of oil falls too far, then it becomes unconventional for tar sands to be extracted.

 

[Mr Z]

Re: OIL AGAIN!

LOL!

IF you believe that oil is a finite resource then peak oil is more fact than anything else. The only way that peak oil cannot apply is if there is NEVER peak production which can only occur IF oil supply is limitless..... only the abiotic crowd think that oil is limitless.

Kind of a silly thing to say really... peak oil theory was developed to explain what would happen with US conventional oil supplies, Hubbert was pretty well spot on... now how can the same model not apply to global conventional supplies at some point?

Peak oil theory has always been about the end of cheap oil, not the end of all oil. It always gets twisted in the media!

+ they always seem to fix demand at current levels or project in a linear fashion... really growth of consumption is exponential, that is the killer, that is the thing that tends to stuff up most predictions.

US has been becoming energy independent for close to 50 years now... leme know when it happens. If it ever happens it will prolly be because they are broke and don't need energy, color me skeptical on that one!

 

[Ann]

Re: OIL AGAIN!

I have been watching the POO for a long time now as it developes into a Summetrical Triangle. Will it rise, will it fall? My thoughts are it will fall downward from the Triangle. Reason.... http://www.nasdaq.com/article/oil-futures-weaker-on-high-us-stocks-opec-flow-20130514-00810

If it falls I have done a potential target price using a swing trade calculation. By my estimates the stuff is going to be worthless!

 

[CanOz]

Re: OIL AGAIN!

I have been watching the POO for a long time now as it developes into a Summetrical Triangle. Will it rise, will it fall? My thoughts are it will fall downward from the Triangle. Reason.... http://www.nasdaq.com/article/oil-futures-weaker-on-high-us-stocks-opec-flow-20130514-00810

If it falls I have done a potential target price using a swing trade calculation. By my estimates the stuff is going to be worthless!

Yeah, its been in relative balance for a few sessions now, even rejecting lower prices Friday...

Will pop up a TPO later once i've had my coffee.

NG is also one to watch, unless i missed it last night.

 

[CanOz]

Re: OIL AGAIN!

Here's the COT for Oil this week...

 

[Ann]

Re: OIL AGAIN!

Here's the COT for Oil this week...

I just checked my COT charts for Oil and the Open Interest is very high and has had a very small drop from last week. I think it is getting ready to fall away and perhaps take the POO with it. Let's see!

OI for 30/4/13 = 1,771,193
OI for 5/7/13 = 1,770,442

(Open Interest definition: http://www.investopedia.com/terms/o/openinterest.asp ) Just for anyone wondering what the heck we are talking about!

 

[CanOz]

Re: OIL AGAIN!

This is setting up nicely today Ann, hope your alerts are working!

 

[Ann]

Re: OIL AGAIN!

This is setting up nicely today Ann, hope your alerts are working!

I wonder if $94.40 is going to be its nemesis today?

 

[CanOz]

Re: OIL AGAIN!

I wonder if $94.40 is going to be its nemesis today?

94.32 is current value, 94.50 is resistance, the spike high...

93.85 is the spike low support.

The key really is the DX....bottom chart

Late in the day the index traded and settled above the 3-month high at 83660; the breakout level now becomes support. This doesn’t have to be taken as an exact number but rather a level;
If the market goes straight up the breakout is confirmed
If the market balances around this level for a few days the breakout remains an open question.
A sharp selloff on Wednesday would represent an upside breakout failure.

 

[Ann]

Re: OIL AGAIN!

94.32 is current value, 94.50 is resistance, the spike high...

93.85 is the spike low support.

The key really is the DX....bottom chart

I said $94.40 because looking at your chart there is clearly an inverted flagpole with a pennant formed (very bearish). The price had one only false breakout above that $94.40 and fell back. This is not a heartening view.

...and as pretty as those last charts are they mean absolutely nothing to me, sorry. I prefer to keep my charting as spartan and simple as possible. Otherwise I have no idea what I am looking at! Simple soul you see!

 

[CanOz]

Re: OIL AGAIN!

...and as pretty as those last charts are they mean absolutely nothing to me, sorry. I prefer to keep my charting as spartan and simple as possible. Otherwise I have no idea what I am looking at! Simple soul you see!

Its just volume plotted as a vertical histogram, quite a simple concept, in order to structure the market a little more accurately.

Anyway, back to bearish on oil...

 

[Ann]

Re: OIL AGAIN!

It fell out of the bearish inverted flagpole and pennant as expected!

(This is a ten minute price chart, don't have the 5 minute one but it looked sufficiently similar to call the shape)

Now will it recover?

 

[CanOz]

Re: OIL AGAIN!

Whats your measured move target Ann? 93.85 should be the minimum...but we've broken a major TL as well.

 

[Ann]

Re: OIL AGAIN!

Whats your measured move target Ann? 93.85 should be the minimum...but we've broken a major TL as well.

A rough guestimate $93.40 maybe...at a very quick glance.