Here we go! Oil Heads Up To $74 a Barrel, But U.S. Bonds, Crude Supply Cast A Pall

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Oil eased on Wednesday, but held in sight of three-year highs reached the previous day, as rising U.S. fuel inventories and production weighed on an otherwise bullish market. A rise in U.S. government borrowing costs to their highest since 2013 this week has tempered some investor appetite for risk, but analysts said they believed Brent crude may have another attempt at marking new 2018 highs above $75 a barrel. Weekly data on Tuesday that showed a rise in U.S. crude inventories also subdued the oil price somewhat. Like MBS said $80 per barrel....

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After all work to bring down oil to break OPEC and control Russia it seems to me  that Russia and the Arab countries are back in the game. This administration have to do something... or maybe it's already late

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Also I've found this and it could be in correlation(though not the only reason) with "$75 per barrel"
"... Yemen's Houthi rebels have put a bullseye on Aramco, targeting Saudi oil facilities in a bid to inflict some economic damage. The Houthis say they have attacked Aramco installations using missiles and drones at least eight times since the beginning of March....."

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It's a good news just for crude oil producing countries and bad news for all of  others... 

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Crude oil price above $74 per barrel first time since November 2014. And, will not stay on this...

- 15th of January, 2016: $28.9

- 15th of January, 2017: $55.4

- 15th of January, 2018: $69.1

- April, 2018: > $74.

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There used to be a saying where there's muck there's money ,that's now changed to where there's war threat there's money....

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Oil prices (latest) are result of fears mounted over the prospect of new US sanctions on Iran... 

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12 minutes ago, Pavel said:

Oil prices (latest) are result of fears mounted over the prospect of new US sanctions on Iran... 

It helps Russian and Iran...

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Markets closed and oil prices managed to finished higher, erasing some losses over inventory reports and back to geo fears re Iran. 

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The oil market has turned from a buyers market to a sellers market and will not change direction soon...we will start seeing increasing numbers of large industrial users hedging forward prices as they realize that prices will continue up and they better get covered now. Current values, when deflated, are good values and should be booked as soon as possible by users. They will pay the price by waiting and not acting now.

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Not sure i see the fundamentals lining up for higher oil prices (Venezuela aside) to create such a lucrative sellers market. Would love to hear more ...

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1 hour ago, Johnny Mac said:

The oil market has turned from a buyers market to a sellers market and will not change direction soon...we will start seeing increasing numbers of large industrial users hedging forward prices as they realize that prices will continue up and they better get covered now. Current values, when deflated, are good values and should be booked as soon as possible by users. They will pay the price by waiting and not acting now.

While I mostly agree with @Johnny Mac here, let's not forget that we have a huge amount of ultra-bullish hedge funds out there already... once sentiment turns sour, these people will cover their bets and take profits. I think there'll be a better moment to pull the trigger on hedging 

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Greed will take its place with hedge funds...they will bide their time and be patient...they know the trend is their friend and will wait ....the game is just beginning.

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"Crude is going to go from a glut to a shortage in the next two years," Bass, the founder and chief investment officer of Hayman Capital Management, told Richard Quest on CNNMoney's "Markets Now" on Wednesday.

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Neil Dwane, with Allianz Global Investors, issued a report in May, 2017 in which he outlined "Five reasons to expect higher oil prices."  The five reasons are listed below.  

Note that Brent averaged $46 in June, 2017, and Brent currently is at $74, up 60% from the mid-2017 monthly price.

Five Reasons to Expect Higher Oil Prices:

1)  Global oil demand is reassuringly stable

2)  Multiple factors will constrain the oil supply

3)  New discoveries are dwindling

4)  The US shale industry has problems

5) Domestic production is falling in a booming Asia


Note that Mr. Dwane references Mexico as a point of concern, but Mr. Dwane did not get into Mexico's problem with net oil exports, and Mexico's net oil exports fell by about 50% from 2016 to 2017.  

In any case, Mr. Dwane was interviewed on CNBC in July, 2017 and he made the following points:

There's still a major reason why oil could jump back to $120, experts say

http://www.cnbc.com/2017/07/07/theres-still-a-major-reason-why-oil-could-jump-back-to-110-experts-say.html

Oil supply could easily be threatened by geopolitical risks, and such a disruption could cause oil prices to skyrocket, experts tell CNBC.

Neil Dwane, global strategist and chief investment officer of European equity at Allianz Global Investors, warned that oil production supply is looking threatened around the world.

"Venezuela's 2 million barrels of oil a day could literally go any day. Mexico looks poor. Azerbaijan's in trouble. China's own production is collapsing rapidly," he told CNBC's Squawk Box on Friday.

"One only has to have one mistake and the only thing you'll be talking about all morning is oil at $120."

Dwane said geopolitical risks could cause prices to skyrocket as several oil producing states are fragile, and oil prices are currently too low for anyone to want to drill fresh wells which may be needed in the future.
 

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Let me add to the list....CapEx on exploration is markedly down...

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