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That is really interesting, thanks Smurf, I had no idea Norway had so much oil.
That is really interesting, thanks Smurf, I had no idea Norway had so much oil.Various others regulate the industry not so much with a price objective in mind but still with the effect of reducing production so as to benefit their own national interests. Norway is an example of that
Oil look to be straight up again after today's OPEC cut.
There's report of a car bomb in Iran yesterday [?]... With the stated intention of taking out Iran's "regime", sporadic attacks to start a retaliation you can send boots in... With Trump being friendlier to the fossil industry than most... another war with another Arab state, one that can cut, or drastically disrupt supply from the Persian Gulf if war breaks out... oil and fossil energy looks primed to shoot up.
I believe the car bomb was a Sunni attack on the Iranians who are majority Shia and not Arabs but Persians. I take your point though, any instability can drive the price of oil up.
It occurred at Chabahar which is the Wild East of Iran with many different tribes of Sunni and Shia and is not too far from the border with Pakistan and an area which is unstable in the Wild Southwest of Pak.
If Trump's advisers are wise which may be a longshot knowing the Washington landscape they would be best to ignore this bit of fireworks.
gg
They're not in the same league as Russia or Saudi but still a significant producer and exporter of oil.That is really interesting, thanks Smurf, I had no idea Norway had so much oil.
The oil price looks as though it is tiring. There appears to be a Megaphone shape forming which could mean further falls. It continues to struggle to get to test the $55 resistance line. We will see what this coming week brings.
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I won't stir up ducati by going into my predictions about oil having extreme fundamental support at around $50 at the moment, but even ignoring that, I don't think your megaphone pattern looks valid. Extrapolating the bottom edge of the megaphone from those two early points is stretching it a bit too far. Even if it fell through the bottom edge of the megaphone now (which I don't think it will, for multiple reasons), it wouldn't really count as a megaphone pattern in my opinion. It would need to touch the bottom then bounce back up (at that point it would count as a megaphone, especially if the top of the megaphone was touched another time) then after that fall through.
The US would be the most interesting one in terms of having literally millions of mostly tiny oil deposits. That compares to a small number of huge fields in places like Saudi Arabia.Thanks Smurf, I find it very interesting to see where the highest density of plant and animal life was centred back when oil was first being formed.
Thanks Smurf, I find it very interesting to see where the highest density of plant and animal life was centred back when oil was first being formed. Hard to imagine all those now desert areas being teeming with plants and animals.
The US would be the most interesting one in terms of having literally millions of mostly tiny oil deposits. That compares to a small number of huge fields in places like Saudi Arabia.
Some of those wells in the US have production that's literally under 100 litres per day. They're viable only because there's massive oil infrastructure there, that is it's easy to sell the oil to someone to refine not far away, and due to being on easily accessible flat ground and so on.
A lot of those tiny oil wells are literally just pumping into what any Australian seeing it would at first think to be a rural household water tank. All rather unimpressive to look at. When the tank nears full a truck comes and takes the oil away. Incidentally there's a few of those within walking distance of downtown LA (well, not that walking around LA is a good way of getting around but they're in a very urban area yes).
At the other end of the scale is the huge flow rates from a small number of fields in the Middle East.
For the record every Australian state plus the NT has at some time produced oil either conventional crude oil (Vic, WA, SA, Qld, NT) or oil shale (NSW, Tas, Qld).
Back to the price topic, from a fundamental perspective I question what has really changed to warrant the ~ one third drop in price?
The US backed down on sanctions against Iran. That seems to be the main argument for lower prices - Iran's production won't be curbed as had been expected. However:
Venezuela is still falling apart in every possible way both with oil production and the country in general.
OPEC + Russia just cut 1.2 million bpd of production. Separate to that, since they are not part of or associated with OPEC, is a 325,000 bpd production cut from Canada.
Most of the OPEC countries need prices to be higher than at present in order to balance their budgets and same with Russia. So they're likely to at least try and keep the price up.
The recent price drop has already resulted in falling drilling activity in the USA which will curb future supply. It's only a very minor drop thus far but it's still a drop in what was a rising trend and if price remains where it is now then we can expect further drops as current projects are completed and new ones not started due to poorer economics.
Demand is still trending up.
There has been talk of an oil glut but there is no actual physical glut since almost as soon as production exceeded demand production has been cut back.
Even after the cuts, global spare capacity remains in the order of 2.5% of consumption by most estimates. This is low by historic standards.
So from a fundamental perspective my thinking is that whilst price may well go lower in the short term, which would be more of a "technical" sort of occurrence, before too long it'll be higher than it is now.
They sound more like underground storage tanks. I reckon there are ship loads of little storage areas where investors have thought they will make a fortune, buying low selling high as with any other commodity. That is what I was saying ages ago, it will probably cost them dollars to have the stuff removed.A lot of those tiny oil wells are literally just pumping into what any Australian seeing it would at first think to be a rural household water tank. All rather unimpressive to look at. When the tank nears full a truck comes and takes the oil away. Incidentally there's a few of those within walking distance of downtown LA (well, not that walking around LA is a good way of getting around but they're in a very urban area yes).
Back to the price topic, from a fundamental perspective I question what has really changed to warrant the ~ one third drop in price?
Climate Change?
No I mean actual naturally occurring oil wells or “stripper wells” in industry terminology.They sound more like underground storage tanks
Sdajii, I called the end to gold back in 2012 on the quarterly charts using the start of a rising megaphone pattern with much, much less information than this chart.
I say put up or shut up on your call, show me the reason for your call or just go away.
The thing is Sdajii, it doesn't matter if my call of a megaphone is right or wrong, at least I demonstrate why I am saying something. I don't just curl up like a coy little girl and say, "I have a secret and I know more than youhoo, nahnenahnenah." You have no idea how foolish you are making yourself look.If you called something a megaphone with much less information than this, you have no business telling anyone else to shut up or go away. You will be wrong here.
From a fundamental perspective there's a case for a bottom around here.
What concerns me with that idea however is that the "everything down" trend is still very much alive, the ASX is down ~2% thus far today, and there are also the various "technical" arguments being made to the effect that further downside is likely with oil.
I'm thus sitting on the fence for now.
Whilst we're looking at this from a very different perspective I must say I'm finding your analysis interesting and informative. That comment stands no matter what the eventual outcome with the market (since we both know that the probability of being correct isn't 100% no matter what method is used).I can find no hand drawn levels at or around $50 Smurf but I have very carefully laid a Fibonacci level and that is showing 50% at $51.
The thing is Sdajii, it doesn't matter if my call of a megaphone is right or wrong, at least I demonstrate why I am saying something. I don't just curl up like a coy little girl and say, "I have a secret and I know more than youhoo, nahnenahnenah." You have no idea how foolish you are making yourself look.
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