Oil price discussion and analysis

Smurf1976 · 24 January 2016

luutzu said:
So fossil fuel price will skyrocket within next decade then?

No guarantees there.

If the economy falls in a hole and consumers simply can't pay then we won't get more expensive oil, we'll just be using a lesser volume of cheap oil.

Electric cars may well become mainstream.

Never underestimate the abilities of central banks to pump money out. Now, if that money at a negative interest rate happens to end up invested in tar sands...

Something dramatic happens politically and we end up with Western oil companies back in the Middle East with no restraint on extraction rates.

I do think prices are more likely to go up than down but I don't see it as a certainty.

luutzu · 25 January 2016

Smurf1976 said:
No guarantees there.

If the economy falls in a hole and consumers simply can't pay then we won't get more expensive oil, we'll just be using a lesser volume of cheap oil.

Electric cars may well become mainstream.

Never underestimate the abilities of central banks to pump money out. Now, if that money at a negative interest rate happens to end up invested in tar sands...

Something dramatic happens politically and we end up with Western oil companies back in the Middle East with no restraint on extraction rates.

I do think prices are more likely to go up than down but I don't see it as a certainty.

Yea, can't really predict anything really.

Like the price of oil tomorrow.

The headlines tend to say oil is also low because of the mild winter up North. This weekend just saw a blizzard shutting down NE USA... will demand for oil now go up or down from this snowstorm?

Can't really say how the market will interpret it. Flights are cancelled, cars off the road, schools closing etc. mean less consumption... but then will need more heat for showers and comfort.

DeepState · 25 January 2016

Smurf1976 said:
Something dramatic happens politically and we end up with Western oil companies back in the Middle East with no restraint on extraction rates.

What is the expected supply profile for new Iranian output?
What is the all-in cost of production like for Iran relative to RoW?
What is the Iranian appetite to share the oil field development costs with foreign, including Western, interests now that the embargo has largely been lifted? Chinese FDI being an indication of what a major buyer is permitted/encouraged to do before the embargo was lifted.

daytradeprofit · 10 February 2016

crude oil jumped from a near 13-year low of $27 a barrel last month to as high as $35 last week, yesterday it fell down and broke major support at 29.30 as i mention on my last post this is crucial and I'm expecting to see some more downside moves
we can from the technical aspect Butterfly Pattern:
extension harmonic pattern where sometimes can be found near key market reversal points
D would need to be an extension of BC in the magnitude of 1.618 or 2.618. This should align with an extension of XA in the magnitude of a 1.27 or 1.618.
the bright spot for oil bulls is the dollar. With expectations of a second US interest rate rise also falling, the greenback has fallen back against other countries, which reduces the cost of oil for overseas buyers in critical industrial markets such as China.
crude oil next stop suggest at ....http://www.*********************/

notting · 16 February 2016

OOOOOhh. Now dat's gonna hurt anyone who covered their shorts today.-

Take heart, what's a few % points between on off on again? go to town on 'em again tomorrow.
But check the reals first!
It's rarely perfect.

notting · 18 February 2016

Killing Americans 9/11 etc - rarely has a good result....................

We killed OPEC!

[video]http://money.cnn.com/2016/02/17/investing/opec-dead-texas-congressman/index.html[/video]

luutzu · 18 February 2016

notting said:
Killing Americans 9/11 etc - rarely has a good result....................

We killed OPEC!

[video]http://money.cnn.com/2016/02/17/investing/opec-dead-texas-congressman/index.html[/video]

I thought the Saudis are to do what Uncle Sam tells them to - being one of the unofficial colonies and what not.

Crashing the market certainly hurt Russia and Venezuela, and put those high cost producers into bankruptcy, but I heard from a few geo-political guys (on YouTube of course) that oil is low because the US want it so. With a couple of brigades and a handful of bases on the ground in the ME, I don't think sheiks and sultans could do things because they wanted to.

Maybe the current talk of a "freeze" is for show and Russia got a few more hurting to go; That or Uncle Sam thought maybe it benefits the Chinese too much to have low oil prices - can't really hurt a diminished giant but fed a growing one that's stirring a few islands with great strategic and energy reserves.

Anywho... I have no idea how oil will do next couple years, definitely certain it won't be around this level in the medium term though.

notting · 19 February 2016

Saudis are Frenemies not colony. Muslim nutcases like all the others -They just know where the money comes from.
Bin Laden was the great son who they privatly loved, but publicly condemned.
Plenty of terror money comes from Saudi land woman stoning nut jobs.

luutzu said:
definitely certain it won't be around this level in the medium term though.

Medium term, - Where will it be?

luutzu · 19 February 2016

notting said:
Saudis are Frenemies not colony. Muslim nutcases like all the others -They just know where the money comes from.
Bin Laden was the great son who they privatly loved, but publicly condemned.
Plenty of terror money comes from Saudi land woman stoning nut jobs.

Medium term, - Where will it be?

US chose Ibn Saud and his clan to rule it ever since WW2. US been there and done all that. Have also seen it in a George Clooney movie - Syrianna Based on an ex-CIA guy's account of who and what run those countries.

But alright, they're nasty people we don't really like but have to kinda get along because they got lots of the stuff we want.

Medium term... say 3 to 5 years, oil will be higher

If it does not, well a lot of those oil countries will go broke. And going broke mean you don't have money to buy guns to suppress your people and keep waging a couple wars and fund terrorists. Not to mention the palaces and all them jets and yachts.

But I would gladly trade my few bucks if they'd decided to go broke, pack up and head to the US as all former puppets of colonies tend to after the fall.

notting · 19 February 2016

Kinda liking this analysis -

[video]http://video.cnbc.com/gallery/?video=3000494880[/video]

Smurf1976 · 19 February 2016

luutzu said:
And going broke mean you don't have money to buy guns to suppress your people and keep waging a couple wars and fund terrorists. Not to mention the palaces and all them jets and yachts.

It also means you don't have money to reinvest in sustaining oil production.

If you look at oil producing countries that have collapsed in some way in the past, well one of the first and most significant things that happens is that oil production crashes.

luutzu · 3 March 2016

Smurf1976 said:
It also means you don't have money to reinvest in sustaining oil production.

If you look at oil producing countries that have collapsed in some way in the past, well one of the first and most significant things that happens is that oil production crashes.

You mean to maintain (sustain) the existing infrastructure/wells or reinvest in new ones? I think you mean new exploration/dev?

But yea, it would make sense that maintenance of exisiting production facilities are also cut. Sense but kind of strange given how it's their lifeline and they're neglecting it. But then maybe there's not much that could be done to sustain it given how reserves are finite and the more you pump the less there are to pump up - no matter how well you oil the engine or come up with greater efficiency.

---

Looks like oil has hit its bottom and on its way back up past week.

Just read that Saudi just raise its price to Asia; Putin just said Russian oilers all want to freeze production this year at January's level; OPEC seems to also want that.

50% of Russia's revenue are from oil and gas; Saudi and other OPEC maybe up to 80% (guessing there). If they won't be reinvesting towards existing production and some $200Billion worth of exp/dev projects have been cancelled... that an ME and Russia and NATO are fighting wars on all fronts, it is just not possible to keep oil at this level.

On the good news, and one I hope is right for people's sake, is that since oil is being use as a weapon in these current wars: "glutting" the market to drive down the price to bankrupt the other guy(s). Since they can't keep fighting for too long without money; and since money for them comes from oil and oil don't buy as much as they used to... the wars will soon have to stop.

Once it stop and their account is almost empty, better work together to bring prices up to replenish the treasuries (hurrah for innocent people). With high oil comes greenlights for alternatives and renewables (hurrah for Mother Earth and all her children); with higher prices I might start to break even (hurrah for getting back to zero).

That or they decided $40 is a good level that afford both wars and palaces... and so freeze production to bring it there. Dam it.

This is why I don't buy into casinos and weapons manufacturers. But ey, only reason I buy oil is that high oil prices is actually good for the world

tanti · 5 March 2016

luutzu said:
You mean to maintain (sustain) the existing infrastructure/wells or reinvest in new ones? I think you mean new exploration/dev?

But yea, it would make sense that maintenance of exisiting production facilities are also cut. Sense but kind of strange given how it's their lifeline and they're neglecting it. But then maybe there's not much that could be done to sustain it given how reserves are finite and the more you pump the less there are to pump up - no matter how well you oil the engine or come up with greater efficiency.

---

Looks like oil has hit its bottom and on its way back up past week.

Just read that Saudi just raise its price to Asia; Putin just said Russian oilers all want to freeze production this year at January's level; OPEC seems to also want that.

50% of Russia's revenue are from oil and gas; Saudi and other OPEC maybe up to 80% (guessing there). If they won't be reinvesting towards existing production and some $200Billion worth of exp/dev projects have been cancelled... that an ME and Russia and NATO are fighting wars on all fronts, it is just not possible to keep oil at this level.

On the good news, and one I hope is right for people's sake, is that since oil is being use as a weapon in these current wars: "glutting" the market to drive down the price to bankrupt the other guy(s). Since they can't keep fighting for too long without money; and since money for them comes from oil and oil don't buy as much as they used to... the wars will soon have to stop.

Once it stop and their account is almost empty, better work together to bring prices up to replenish the treasuries (hurrah for innocent people). With high oil comes greenlights for alternatives and renewables (hurrah for Mother Earth and all her children); with higher prices I might start to break even (hurrah for getting back to zero).

That or they decided $40 is a good level that afford both wars and palaces... and so freeze production to bring it there. Dam it.

This is why I don't buy into casinos and weapons manufacturers. But ey, only reason I buy oil is that high oil prices is actually good for the world

So where will oil stop at? $40pb?
I think and its pretty obvious that there is some good coin to be made in oil atm. But will turf wars fire back up again?

luutzu · 7 March 2016

tanti said:
So where will oil stop at? $40pb?
I think and its pretty obvious that there is some good coin to be made in oil atm. But will turf wars fire back up again?

From memory, some OPEC oil minister was thinking $45 to $65 over next two years is where they'd preferred it. But, he goes on, market forces etc. mean it'll go where "the market" takes it.

From Chomsky, yes, Noam Chomsky, oil is priced at where the US want it priced at. And the US want it where the oilers tell them to want it: Not too high that it will hurt other US (and some favoured Western) corporations' profits, but not too low that ExxonMobils and other big and little Rockefellers can't make much money either.

Oil is too important to be determined by the market. (that's totally my saying )... so with a lingering global economic recession, with greater offshoring of jobs and manufacturing that need to be brought back home to consume (as observed by ViJay Prashad, a leftwing professor of politics) - because let's face it, if we in the West think we're doing it tough, imagine the poor bastards in the developing countries on $1 or two a day... Then with something like a seven or eight wars happening across the ME and Eastern Europe... we all could do with lower oil prices.

As said before, short term low oil price will not hurt big oilers. They will take the opportunity to write down their assets as impaired (and pay no taxes), then using their muscles they will take over weaker rivals with lots of undeveloped fields or newly developed assets with big debt they can't repay... It's like a steal. Much cheaper than developing in the Arctic and deep offshore (think of the animals and Mother Nature, they'd say).

So that's oil. Or we can hire a few consultant and analysts and do the economics of supply and demand so that a 1.5% oversupply is somehow a glut in a world with increasing demand for a finite resource that's due to be emptied in another 100 year (right about when Global Warming needs to be stopped too).

notting · 4 April 2016

Not only is it all about supply and demand.
But this would be freaking out the Arabs more than anything ever has.
It's like the final middle finger offered up from the States to Allah Land after it's decade of go blow yourselves up, may as well just blow ourselves up and try to look scary -

http://www.bbc.com/news/business-35953817

Boo!

And oil plummets again.

notting · 21 April 2016

Ooooops.
I took profits and went short on about 5 oilers yesterday.
WTF

Covering ask question later

One answer, China is increasing consumption and is pumping a lot less.
Another - The Doha 'Dho' was priced in, it wasn't all about the strike in Kuwait.

luutzu · 21 April 2016

notting said:
Ooooops.
I took profits and went short on about 5 oilers yesterday.
WTF

Covering ask question later

One answer, China is increasing consumption and is pumping a lot less.

ouch.

Just to rub salt to injury, I've been doing pretty well on oil lately. Almost break even

Read oil is going down over in the US though, so might be good for you next week.

CanOz · 21 April 2016

47 for a minimum target on WTI.

Smurf1976 · 21 April 2016

luutzu said:
You mean to maintain (sustain) the existing infrastructure/wells or reinvest in new ones? I think you mean new exploration/dev?

But yea, it would make sense that maintenance of exisiting production facilities are also cut. Sense but kind of strange given how it's their lifeline and they're neglecting it. But then maybe there's not much that could be done to sustain it given how reserves are finite and the more you pump the less there are to pump up - no matter how well you oil the engine or come up with greater efficiency.

The basic thing with oil is that you have to keep investing in order to maintain flat production. If you stop investing then production starts to fall pretty quickly as the wells deplete if you're not drilling any new ones.

So if a country falls into crisis and stops spending, then it's a given that oil production drops simply due to natural depletion of whatever fields they have in production. In reality that can also be hastened by things like people blowing up pipelines etc but production still falls (slowly) even if that doesn't occur.

luutzu · 21 April 2016

Smurf1976 said:
The basic thing with oil is that you have to keep investing in order to maintain flat production. If you stop investing then production starts to fall pretty quickly as the wells deplete if you're not drilling any new ones.

So if a country falls into crisis and stops spending, then it's a given that oil production drops simply due to natural depletion of whatever fields they have in production. In reality that can also be hastened by things like people blowing up pipelines etc but production still falls (slowly) even if that doesn't occur.

I knew it was silly to think they just need to drill a couple of holes in an entire field

The oil rally this week was unexpected by me... not that I'm ever good at expecting it. With the freeze falling sideways Monday's drop was expected, but then the massive gain right after. Read on Reuters it's due to worker's strike in Kuwait (?) and drop in stockpile in the US.

Again, oil literally moves the world and its economies and militaries. How a 1.5 to 2% oversupply become a glut is just beyond me.

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