Mad Monday coming up!

[Hamed Fakhro 0]

With the insane 30% increase in oil prices after Donald Trump’s tweet, the facts on the ground remain the same: The coronavirus has crippled all transport globally and decimated demand. Refineries report a reduction of 15-20 million barrels per day with no end in sight.

The crazy jump in oil prices were based on unreal optimism that Trump would meet with oil producers at the White house and wave his magic wand, followed by an OPEC meeting where they would rub their magic lamp and demand would magically jump back by 20 million barrels.

The white house meeting produced nothing but hot air, and Trump declared that the markets need to determine their own fate. The OPEC meeting was kicked down the road with some finger pointing and fist shaking. And once again, Trump’s delusional tweets add confusion and carnage at a time where clarity and level-headedness are needed most.

The elephant remains quietly laughing in the back of the room. What about corona? Even if production was cut by 15 million barrels little would change. Global storage is almost full, countries are battling for market share, and even large American shale producers would like to see the small independents fall so they could pick their bones at a discount. 

It’s ironic but perhaps this fall in oil prices is exactly what everyone wants. We all know Monday will again be a historic day for oil. What I’m curious to know is: Do you think it will be a sensational rise, or another historic crash?

Edited April 5, 2020 by Hamed Fakhro
The app is buggy and published it by itself

[Douglas Buckland + 6,308]

So you would prefer that he did nothing?

[El Nikko + 2,145]

6 hours ago, Hamed Fakhro said:

With the insane 30% increase in oil prices after Donald Trump’s tweet, the facts on the ground remain the same: The coronavirus has crippled all transport globally and decimated demand. Refineries report a reduction of 15-20 million barrels per day with no end in sight.

The crazy jump in oil prices were based on unreal optimism that Trump would meet with oil producers at the White house and wave his magic wand, followed by an OPEC meeting where they would rub their magic lamp and demand would magically jump back by 20 million barrels.

The white house meeting produced nothing but hot air, and Trump declared that the markets need to determine their own fate. The OPEC meeting was kicked down the road with some finger pointing and fist shaking. And once again, Trump’s delusional tweets add confusion and carnage at a time where clarity and level-headedness are needed most.

The elephant remains quietly laughing in the back of the room. What about corona? Even if production was cut by 15 million barrels little would change. Global storage is almost full, countries are battling for market share, and even large American shale producers would like to see the small independents fall so they could pick their bones at a discount. 

It’s ironic but perhaps this fall in oil prices is exactly what everyone wants. We all know Monday will again be a historic day for oil. What I’m curious to know is: Do you think it will be a sensational rise, or another historic crash?

You do know the large shale producers are also having a hard time as well? I see these comments a lot but while it might be a good time to pick up a bargain how does an oil company do that when they are cutting dividends and having to service debt like everyone else? There are also some big oil companies in a bind at the moment.

Other than that yes this situation could be with us for quite some time, I do not see the economy bouncing back and going back to normal but then I'm not an economist.

My feeling (and I think it has merit) is that Saudi is doing this because it feels very threatened with it's geopolitical situation and it's lashing out at the two big players in the region..the US and Russia. I think they feel like the US are about to pull out of the ME without (hopefully) destroying Iran and that leaves Saudi on it's own. The grand coalition is dead, they've fallen out with and sanctioned Qatar for going it's own way, they've failed in Syria and started an unwinnable war in Yemen. On top of that the war it wanted so much in Iraq has been a disaster and a large part of the country is now alligned with Iran which means Iranian proxies now border with Saudi Arabia.

Surely it can't just be me that thinks about this? It's not just a price war.