Rocketman72

[Rocketman72 + 6]

Who thinks WTI will be $60 a barrel by the end of August?

[Old-Ruffneck + 1,246]

Doubtful, 9 weeks and 20 a bbl? Inventory builds still? Unless something like "war" no in my opinion !

[JoMack + 549]

I believe it will hit or get close to $60 by the end of October.  But it won't be stable.  The volatility is starting to happen and will continue until next year.  Production in the U.S. has dropped by 3 million bbls and investment has dropped significantly.  Baker Hughes rig count is a bit over 200 active rigs from a high of 600 at the beginning of the year.  OPEC+ has pulled exports back to record levels and Canada is in turmoil.  The upcoming 6 months will be something to see.  Getting crude back on track is going to take some major cooperation and the cheaters like Iraq need to be reigned in since they increase instability where volatility in the coming months will be insane.  

I'm interested in seeing what is going on with stripper production.  When those low volume wells lose production if shut-in too long it's bye bye crude since they don't make enough production to perform workovers. 

[wrs + 893]

Well people don't pay enough attention to Cushing IMO.  Too much attention paid to the entire inventory number but Cushing is where the contracts are settled and if it goes below 40mmbbl, that's always bullish and usually puts the market into backwardation.  Currently it's at 45mmbbl and dropping about 1-2mmbbl/wk.  Cushing is filled by Canadian oil which has declined by 1mmbbl/day, Bakken oil and Permian oil.  The Bakken and Permian have seen significant declines and will not be ramping up.  Cushing is emptying and if they can't figure out how to get more oil in there soon, the OP could be right.  Notice that we are actually lower now than last year with less demand.  That says production is dropping faster than estimated by the EIA.  

 

 

Edited June 26, 2020 by wrs

[Rocketman72 + 6]

On 6/26/2020 at 8:16 AM, wrs said:

Well people don't pay enough attention to Cushing IMO.  Too much attention paid to the entire inventory number but Cushing is where the contracts are settled and if it goes below 40mmbbl, that's always bullish and usually puts the market into backwardation.  Currently it's at 45mmbbl and dropping about 1-2mmbbl/wk.  Cushing is filled by Canadian oil which has declined by 1mmbbl/day, Bakken oil and Permian oil.  The Bakken and Permian have seen significant declines and will not be ramping up.  Cushing is emptying and if they can't figure out how to get more oil in there soon, the OP could be right.  Notice that we are actually lower now than last year with less demand.  That says production is dropping faster than estimated by the EIA.  

 

 

I’ve maintained all along that the looming shortage will be unprecedented.We were already close to being a net supply shortage world. Demand is gaining steam and there is not going to be enough oil to maintain a supply surplus.

[Rocketman72 + 6]

Thanks for your insight!

 

[0R0 + 6,251]

There is nothing yet to indicate a breakout past 50 by August.

There is every indication of a period spent just under $50 as inventory clearing by resuming demand and declining production continues steadily. Watch for the price trigger that brings  rigs back into use.

We should be grinding up in the upward channel through the gap at $38-44 and get stuck at $50. The timeframe is likely through Sep. Then we will see the breakout from $50 into the new oil bull market - IF economic activity revives as expected into fall. Don't expect the fireworks to get going all at once. Look for backwardation to form first. There is no sign of it today.. 

[0R0 + 6,251]

COTs are not showing any commercial accumulation which would normally precede price outbreaks upwards. The MACD/PPO and Chaikin money flow are indicating a local peak for the month ahead.