Dr.Masih Rezvani

WTI / ​​​​​​​Price Forecasting 

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(edited)

WTI
Price Forecasting 

Will Down Till 31.00
 

Without any explanation
Please comment your view 

WhatsApp Image 2020-11-22 at 21.47.18 (1).jpeg

Edited by Dr.Masih Rezvani

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Well, I'll offer my view, but it has to be accompanied by an explanation. 

It looks like there will be one more hard correction to the downside before we make a determined run toward $60 WTI. 

This is because of the winter uptick in Covid cases prompting crazy Democrat governors and mayors to impose mindless restrictions on travel and enterprise. Main Street is going to be in sad shape by Christmas. Inventory is building at the Cushing Hub.  

About Feb. 2021, the vaccines will kick in, along with rapidly rising herd immunity (especially in places like Arizona, Texas and Oklahoma), and travel will resume. There is a pent-up demand for cruises, air travel, and "See the USA, in a Chevrolet." That's going on all over the world and will compensate for the lost business class travel because people have learned how to complete transactions via Zoom.

The slingshot effect will burn off excess inventory by summer and we could easily see $60 WTI by then. My opinion is worth what you pay for it. 

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8 minutes ago, Gerry Maddoux said:

Well, I'll offer my view, but it has to be accompanied by an explanation. 

It looks like there will be one more hard correction to the downside before we make a determined run toward $60 WTI. 

This is because of the winter uptick in Covid cases prompting crazy Democrat governors and mayors to impose mindless restrictions on travel and enterprise. Main Street is going to be in sad shape by Christmas. Inventory is building at the Cushing Hub.  

About Feb. 2021, the vaccines will kick in, along with rapidly rising herd immunity (especially in places like Arizona, Texas and Oklahoma), and travel will resume. There is a pent-up demand for cruises, air travel, and "See the USA, in a Chevrolet." That's going on all over the world and will compensate for the lost business class travel because people have learned how to complete transactions via Zoom.

The slingshot effect will burn off excess inventory by summer and we could easily see $60 WTI by then. My opinion is worth what you pay for it. 

You are right 
But Please complete your view 

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I'm with Gerry. I had 2 months till 60$ brent before lockdowns re announced.  So add probably 3 more months . 5 months on the shorter scale IMO. Also not worth a pinch of salt if they make up more problems in this world. 

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(edited)

My view is $35 to $45 range through Q1 2021.  Largely on the back of no US production growth / OPEC cut extension (supply) and stubbornly under performing refinery utilization (demand).  I do see signs of production growth from 3rd party consultants but internally, I just don't see it (capital).  Demand is likely to increase (vaccines) into Q2 2021 where I stretch the range upward to $40-$50.  If the supply and demand prognostications prove accurate (they usually don't) then draws at Cushing accelerate Q2-Q3 2021 and the range moves up to $45-$55.  If this range proves accurate then the shape of the curve dictates whether we see drilling activity.  If we simply move into backwardation (likely) then drilling activity will be muted.  Backwardation moves the range higher which will steepen the curve.  All prices estimates are monthly average pricing.  We will likely see spikes as we rally and I expect to see pricing above $60 in Q-2-Q3.

 

     

 

Edited by Bob D
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On 11/22/2020 at 5:25 PM, Rob Kramer said:

I'm with Gerry. I had 2 months till 60$ brent before lockdowns re announced.  So add probably 3 more months . 5 months on the shorter scale IMO. Also not worth a pinch of salt if they make up more problems in this world. 

Note that the lockdowns are limited in geography and not applied/enforced outside urban cores where some police might cooperate. Some sheriff's depts. are unwilling and stated so publicly. Some will not protect public health officials doing inspections.

The economic effects will be limited.

The oubreaks are more rapid to form and to fall back down. Leaving little excuse to continue them.

They will be over in no time.

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3 hours ago, 0R0 said:

Note that the lockdowns are limited in geography and not applied/enforced outside urban cores where some police might cooperate. Some sheriff's depts. are unwilling and stated so publicly. Some will not protect public health officials doing inspections.

The economic effects will be limited.

The oubreaks are more rapid to form and to fall back down. Leaving little excuse to continue them.

They will be over in no time.

I'm trying to tame my ever bullish ness. I've been waiting since 2018 so don't ruin my therapy haha. But I agree I'm starting to see that there's less difference (than with prior lockdowns). But I'm more focused on EU when I say lockdowns. I've actually had my targets missed yet grown more bullish. My targets for year end were originally (after covid hit) 10.4mm boe for USA and 83.5BCF by year end. Then after more shut ins I was thinking 84BCF and 10.2mm boe. Now closer 10.7 and 88-89BCF. But what I've learnt . Colombia has lost 110k boe, peru 60k and Mexico 50k . Plus the 2.4 from USA. Canada probably 50k not much decline but still some delayed re starts. 2,670mm boe. For the Americas. Then with EV being a big theme I've been looking into cars. And production over 20 years went from 40Mill per year to 90. And total global passenger cars are skyrocketing.  Like 360 mill in the 70's 650 mill in the 90s and up to 1.4Bill now. Add population growth and demand should be booming. My 02c . Between soon and next 10 years we have a nice runway. 

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Weak dollar due to money printing should equate to high commodity prices?

Geopolitical instability was bad in 2020 and will be much worse in 2021.

I think it will start heading up but the MSM aren't talking about either of those two things, they're just obsessed with covid

and the lack of CAPEX for years...it didn't go away

I have no idea what prices will be but I wouldn't be surprised at anything from 50-80 depending on what else happens.

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(edited)

Well if we take into account that the main driver of the increase in world oil production in the last decade was unconventional oil, mainly shale oil, a certain price threshold is required.

I assume that vaccines are rather effective because the problem is not to create an effective vaccine for this coronavirus only the safe one. However, given that 4 vaccines currently available - Pfizer, Moderna, Astra Zeneca and Sputnik-V have been tested each oonne a group of 30-40,000 people and there were as I assume no dramatic history of many patients' deaths, it is probably logical to assume that they are relatively safe, but each one man should be aware that each of these vaccines, due to lack of time, is not thoroughly tested and everyone will be a guinea pig.
So for oil prices, demand should recover by about at least 2/3 compared to 2020 in 2021.

However, shale requires at least $ 50 in the long run, and preferably some closer to $ 60.

So if the price of shale on the Permian field is to be about $ 55, then WTI price will be around $ 60 and the Brent price will probably be about $ 65.

In the long run, however, I would be worried more about the consequences of the drastic collapse of investments in the oil and gas sector after 2014 as a producer.

Yes I would be worried because I think that prices above $ 80 in the environment of the madness associated with renewable energy sources and the decline in the cost of renewable energy production are starting to be dangerous for the entire sector.

The age-old question arises for global oil industry - is it better to live briefly and richly or modestly and for a long time.

Personally, considering that most of the world's large oil producers still have reserves for quite a long production time at the current level, I would choose the longer and more modest option.

Edited by Tomasz
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20 hours ago, Rob Kramer said:

I'm trying to tame my ever bullish ness. I've been waiting since 2018 so don't ruin my therapy haha. But I agree I'm starting to see that there's less difference (than with prior lockdowns). But I'm more focused on EU when I say lockdowns. I've actually had my targets missed yet grown more bullish. My targets for year end were originally (after covid hit) 10.4mm boe for USA and 83.5BCF by year end. Then after more shut ins I was thinking 84BCF and 10.2mm boe. Now closer 10.7 and 88-89BCF. But what I've learnt . Colombia has lost 110k boe, peru 60k and Mexico 50k . Plus the 2.4 from USA. Canada probably 50k not much decline but still some delayed re starts. 2,670mm boe. For the Americas. Then with EV being a big theme I've been looking into cars. And production over 20 years went from 40Mill per year to 90. And total global passenger cars are skyrocketing.  Like 360 mill in the 70's 650 mill in the 90s and up to 1.4Bill now. Add population growth and demand should be booming. My 02c . Between soon and next 10 years we have a nice runway. 

I'm giving that an UP arrow simply because, while I had no idea what you were talking about or referencing, I thoroughly enjoyed the reading nonetheless.  :) 

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(edited)

Quote

Russia increased its condensate production in October by 5.3% (year on year) - to 3,269,000 tonnes. Ton - the source said, Interfax, citing the statistics of the Central Dispatch Office, which appear with a month delay.
Thus, the average daily production of condensate amounted to 105 thousand. Ton and was 4.8% higher than in September.
The production of oil with condensate in September amounted to 42.188 million tonnes (4% more than in September), thus only crude oil production - 38.9 million tonnes, i.e. 1,297.3 thousand tonnes. Tonnes per day, which is 3% more than in September ...
With the average bbl / d for Russian crude oil at 7.22, oil production in October amounted to 9.366 million b / d, although under the terms of the OPEC + agreement it should be 9 million b / d, i.e. the level of transaction execution was 82% compared to 97 % in September.
OPEC in its report wrote that Russia exceeded its limit in September by 320,000. Barrels a day, i.e. fulfilled the contract by 84%. The IEA calculated that Russia implemented the deal by 95% in October against 96% in September.

Transaction execution level for all OPEC + countries is calculated from six secondary data sources - International Energy Agency (IEA), Platts and Argus Media price agencies, Energy Intelligence, US Energy Information Administration (EIA) and consulting company IHS Markit

Well, 82% execution is a bit far from 100% and it is worth following the issue even if it was the first such month of non-performance of the contract.

Because last year there was a  big scandal with the contamination of the Druzhba pipeline and because it has such big impact paradoxically it contributed to the fact that oil exports in the second quarter, especially in June, were not really much lower than in 2019 and the effects of export cuts were not felt by Russia until 3rd q.

Thus, officially, in the second quarter, the Russian GDP fell only by 8% year on year and in the third quarter by 3.6% and, according to the Ministry of Economy, 1.6% of these 3.6% is a decline in oil production.

Edited by Tomasz

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After only 2 days with have also information about first 29 days of November

Quote

The average daily production of oil with condensate in Russia for the 29 days of November amounted to 1365.4 thousand tons, which is 1.5 thousand tons (0.1%) higher than in October, according to statistics reviewed by Interfax.
As previously reported by Interfax, the average daily production of condensate in October, statistics for which are published with a monthly lag, increased to 105 thousand tons against 100 thousand tons in September.
If we assume that condensate production in November remained at the October level (usually condensate production in the autumn-winter period increases with the growth of gas production), then oil production alone in November may amount to 1260.4 thousand tons. When converted to barrels with an average coefficient of 7.22, oil production is 9.1 million b/d. Under the terms of the OPEC deal+ Russia in November should keep oil production at 9 million b / d

http://www.finmarket.ru/news/5364891

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