OIl Targets from Experts to $300, vs. imho $52

What is funny, is how many Analysts still can't see prices collapsing. The reason is because most put too much emphasis to the current events. This shapes their future long term events. However, the way I look at it, is the Past events shapes the future events overriding the current events, sounds a little too philosophical. You may have heard of the saying, "history repeats itself". I am a strong believer of that, both in life and in trading. 

disclaimer: trading futures is risky, you could lose all your capital. 

But just so you understand it is certainly possible we could hit $300 like Pierre Andurand says. However, what I always ask is, what will happen first, will it first tank and then go up, or go up from here, this is critical when you manage your risk, specially for 100 Mill and Billion dollar funds.

First we have from Motley Fool the obvious $85 target which has been very common among many analysts brokers and talking heads.

https://www.fool.com/investing/2017/09/30/oil-prices-next-stop-85-a-barrel.aspx

Here is a target from Forbes $80 again a common recent target.

https://www.forbes.com/sites/michaellynch/2018/04/26/is-80-oil-the-new-target-price/#60bfba39331e

Here we have Goldman Sachs

recently raised it to $82.50

Bernstein analysts to $150

https://oilprice.com/Latest-Energy-News/World-News/Bernstein-Oil-May-Jump-Past-150-On-Chronic-Underinvestment.html

We even have some expert from Russia raising it to $250

https://oilprice.com/Latest-Energy-News/World-News/Bernstein-Oil-May-Jump-Past-150-On-Chronic-Underinvestment.html

Then to top the list off , we have a hedge fund that trades energies and is up 17% so far this year, who has raised his target to $300.

https://www.marketwatch.com/story/largest-supply-shock-ever-could-bring-300-oil-warns-hedge-fund-manager-2018-04-30

Then we have yours truly who said when oil was high 70s we would first go below 72 then hit 60s then 50s, but not without lots of fights on the way down.

https://oilprice.com/ link to the right

So far we did hit under $72, we did hit the $60s again, can we now hit the $50s? Stay tuned. 

Fundamentally I can come up with lots of reasons why it is going down. Each one would just be a guess based on current events though, and since I'm not in Vegas now, I don't like to guess.

But from the charts we see a clear indication since the last 2 weeks, of some serious pause in the Trend, and that my friends is not a guess, which could possibly bring us back down to the 200 Ma, which comes in, in the 50s, and if that breaks then a lot lower. I'm using the 200 ma as a reference since it is a well known indicator used by many large players, and institutions. Again these are just my opinions, I could be way way off, but charts will give plenty of heads up, before.

Hope the links will still be ok, by time you read this.

 

 

 

 

 

 

But here are some recent targets for oil.

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Sorry the Daily 200 ma is at $62.50 so that would be target number 1. On the Weekly chart the 200 Ma comes in at 52. 

Like I said I usually don't pay much attention to the 200 ma, but I just wanted to bring in some landmarks where the $52 price point would hit, so people can follow. 

I guess what I am saying, I think the 200 ma which many use will be broken and price will downtrend to the 50s. 

I should have paid a little more attention to the 200 ma, before I mentioned it. But regardless it didn't change my target.

But if prices do hit $62.50 there will be a major fight at that price point since it will be well defended, before it could move down to the fifties.

Again the above just my views, most as you have seen disagree strongly.

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This sounds like they are playing chicken. Let's see who will dare to make the highest, wildest, ridiculousest price prediction. And they know darn well that you cannot predict oil prices with any accuracy beyond a week, if even that.

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Marina very good point. 

But let me tell you, if the prices drop below $60, people will come out of the woodwork the same ones who predicted outrageous prices, and they will now predict outrageous low prices. The latecomers to the party.

Exactly as you see, you have to analyze the prices in steps, very close to each other. I am not saying oil will hit $150, but in the meantime if it falls $30 bucks, of if it falls $80 from my target who cares. Right now my direction is down on the daily trend, if it bounces of the 200 ma at $62.50 and I see a strong bounce, I may forgo of the $52 target, but so far too early to tell, my saying is a little more to the point "go with the flow or blow!".

There is a common saying in trading "the trend is your friend", my saying is "the trend is your friend, or your end". The problem is though there is a daily trend, a weekly trend, a 4 hour trend, a 1 hour trend, even a 5 minute trend. Someone who is saying oil is in an uptrend on the daily chart, in the 1 hour chart that person is wrong, since at least for now its in a downtrend, whereas 6 hours ago, on the 1 hour chart it was in an uptrend. By the way, most traders believe trading is now so difficult, it is so difficult for them to catch the trend, or any trend because of Algos, or the HFTs, that most hedgies are closing down, or at least returning the investors money before its way too late.

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12 hours ago, Marina Schwarz said:

This sounds like they are playing chicken. Let's see who will dare to make the highest, wildest, ridiculousest price prediction. And they know darn well that you cannot predict oil prices with any accuracy beyond a week, if even that.

We are after 4 years of huge oil exploration and production underinvestment. Dont forget about that.

Well I dont believe in 200 or 300 $ oil  but  I really see no reason for oil going under 60-70 $ floor anytime soon if we dont have major global recession.

Around 80 $ maybe a little less is perfect long term price for oil.

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When has it ever been $300? Predictions like that are laughable.

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Oil will hardly ever surpass 120$, 60$ to 80$ is what the cost should be by now, if it gets to $300 then account inflation rates

There's likely 1 quadrillion barrells of shale oil that can be untapped, which is not that mindblowing taking in mind Shales are made of Kerogen which is made from dead algae, microbes, bacteria and other stuff that has been fossilized for hundreds of million of years if not billions of years, only the weight of all living life is around 724 billion tons, and kerogen deposits are 10,000 times larger than that 

In a world in which Natural gas is a clear competitor against oil and coal there's not a lot of reason why oil prices will ever be that high

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While I enjoy the amusement that I derive from the discussion of how to predict random numbers (speculative futures prices), there is also an element of sadness associated with the fact that these random numbers are adopted as the price of real oil, a significant commodity in the world economy. What a way to run a business! Investment programs become a crap shoot, and economic efficiency is thrown out the window.

One suggestion: In reading commentary on oil business and prices, begin noticing how almost all of the basis for price forecasting boils down to reading charts of past price moves and the assessments of speculators (gamblers) who make a living from astute or lucky guesses on how the other gamblers will act next time. The actual business of oil is hardly mentioned, and even when it is, it is given superficial and inaccurate treatment. It is no wonder that we have a feast or famine industry.

So do not scoff when these same participants talk or $300 oil or $10 oil. Both levels are just numbers, completely disconnected in their creation from the reality of oil utilization. But in the current world those speculative-determined numbers are pricing reality.

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I enjoy reading these companionable pieces, mostly written with good intention, reflecting many different worldview experiences. Mine is that I grew up on a hardscrabble ranch/farm in Western Oklahoma. My grandfather woke me at 3 a.m. to see them "bring the well in." The year was 1952. The thing was a gusher: oil shooting out because the ancient Ram blowout preventer didn't prevent a blowout . . . not under those pressures. It went dry in thirty days. For years, we were offered pennies for royalties and minerals. I worked as a roughneck at age sixteen--you could do that back then--running the Kelly rig while a drunken driller ran the controls. My point? Getting oil out of the ground is hard, risky work. Sure, with computers and robots and safety features, it's less so. But anytime you get too sanguine about just how much oil there is, or how easy it is to get out of the ground, motor over to your closest shale basin and take a look at what's involved. There's a tremendous coordination of work forces, with a lot of moving parts, still with an element of existential risk and a heck of a lot of financial risk. It's a non-repleting commodity. Under great circumstances, a good operator can pull out only about 10% of the deposit. These wells are parabolic. It costs $3M to drill and complete a frack water depository well in Texas. Plugging a well these days (you have to plug 10% a year in Texas . . . talking about end of lifers . . . is a $30,000 deal. Sure, the massive Ghawar Field in SA is massive. But they are now pumping millions of gallons of seawater into those wells, which basically amounts to secondary stimulation. If you compare gasoline at the pump to a loaf of bread, a gallon of milk, a sandwich or a hamburger, oil should be about . . . $150/bll; do the math. Oil trades on sheer emotion. We have done almost nothing in this country to stabilize our energy system. I call it system, because despite having a Secretary of Energy from Texas, and despite all the talk and our country's trials and tribulations, we still don't have an energy policy. Almost all of our refineries depend on some pour-in heavy sour feedstock to even get the job done. We decided long ago not to shut down those refineries in order to make them more friendly toward light sweet--better to import the middle-carbon-length and heavy sour to mix in. We're overlooking huge markets: the Nord Stream II will run under the Baltic Sea from Russia to Germany; the Soud Stream will go to Turkey. The One Belt/One Road Initiative is the new Silk Road from China, through the Middle East, ending in Russia. Russia now is building an LNG pipeline supply down the spine of Pakistan to the warm water port of Lahore, which just happens to be China's main port in that area too. Wanna put a tariff on something? Put it on oil from places that truly want us dead. Don't encourage Saudi Arabia to pump and dump, because Russia hears that and guess what, they pump and dump too. Then we'll have an excess, and the price will overcorrect, and then we'll have another bust, and investment will fall, and then we'll boom again, because supply has dwindled, and then we'll encourage Saudi Arabia to pump and dump, and we'll import from bad places, and people who don't have any skin in the game will spend a hundred dollars for dinner for two and bitch about filling up the Lincoln Navigator for $75, despite the fact that cattle and chickens and fish reproduce, but oil doesn't. A good bottle of wine is $50, yet the winemaking business is like picking your nose compared to removing a barrel of oil from just above the mantle of the earth. I am obviously too old to be writing down my thoughts, as they just keep spilling out and I'm not all that articulate. But to listen to people complain about the price of oil is liking having another colonsoopy just to get a second opinion. Thanks for letting me use your board. I can at least save the $200 for a psychiatrist's fee. 

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(edited)

I am happy you are amused it's good to be happy, especially in this very volatile market.

I certainly agree that $300 is very far off. Just surprised you put my forecasts which have already proven correct a couple of times, since I started posting with such outlandish targets, as the $300 or $10 target, though I'm not sure where you get the $10 target from. Yes I did post someone who has the target of $300, but It was not to agree with that Hedgefund. If you remember Willaim I said last Tuesday when everyone was bullish on Oil at above $74 that by Thursday, 2 days later WTI would trade below $72. But way before that I said we would see WTI at $52 eventually. Now last Wednesday a day after I predicted OIl would go below $72, it did, but a day earlier. Since this happened I now restated we would hit $52, but first $62.50, well a day later we hit $69. So as you can see my friend my targets are not as outlandish as the $300 or $10 target you referred too. So far many of my targets, hit spot on, so I am confused what you find so amusing. So I just wanted to clear up a couple of facts for you. Hope this helps. Cheers.

Edited by Top Oil Trader
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7 hours ago, Top Oil Trader said:

I am happy you are amused it's good to be happy, especially in this very volatile market.

I certainly agree that $300 is very far off. Just surprised you put my forecasts which have already proven correct a couple of times, since I started posting with such outlandish targets, as the $300 or $10 target, though I'm not sure where you get the $10 target from. Yes I did post someone who has the target of $300, but It was not to agree with that Hedgefund. If you remember Willaim I said last Tuesday when everyone was bullish on Oil at above $74 that by Thursday, 2 days later WTI would trade below $72. But way before that I said we would see WTI at $52 eventually. Now last Wednesday a day after I predicted OIl would go below $72, it did, but a day earlier. Since this happened I now restated we would hit $52, but first $62.50, well a day later we hit $69. So as you can see my friend my targets are not as outlandish as the $300 or $10 target you referred too. So far many of my targets, hit spot on, so I am confused what you find so amusing. So I just wanted to clear up a couple of facts for you. Hope this helps. Cheers.

If my comments offended you, JJ, I spoke badly, and I apologize. I was speaking generally, not aiming specifically at you or anyone else. Basically, I was poking fun at those who believe that oil futures trading is a reflection of the oil business rather than a driver of such. Had I addressed your activities specifically, I would have commended you for your astute readings of the charts and price movements to gauge the ebb and flow of trader sentiment that drives speculative markets like oil. Correct reading of those impulses can be quite profitable. Congratulations are in order.

I, too, make forecasts, but I only suggest numbers based on an expected trend which, in turn, is based upon the assumption that the pricing mechanism remains as it has been for the past thirty years. This method gives me a picture of a thirty-year cycle that will swing from roughly $20 to $150 in today's dollars and back. I see us still in the downward leg of this cycle. Now it is obvious that my forecast provides very little trading guidance. But it does support your notion that the next current move is down. Actually, over the next couple of years I believe it is likely that we will see the lower end of my range. But, as you have suggested, to expect the futures price to move in a straight line is folly.

My main thrust, as I repeat to the point of boredom for most, is that the daily movements of price are not the result of fundamental oil-related factors. The reverse is actually the case. But that concept is not often understood and is less frequently adopted, in spite of its accuracy.

Your proficiency can produce financial rewards from trading oil futures. My proficiency can improve the performance of investment decisions. Both have a place, but the two are fundamentally different.

Thanks for your comments.

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19 hours ago, Gerry Maddoux said:

I enjoy reading these companionable pieces, mostly written with good intention, reflecting many different worldview experiences. Mine is that I grew up on a hardscrabble ranch/farm in Western Oklahoma. My grandfather woke me at 3 a.m. to see them "bring the well in." The year was 1952. The thing was a gusher: oil shooting out because the ancient Ram blowout preventer didn't prevent a blowout . . . not under those pressures. It went dry in thirty days. For years, we were offered pennies for royalties and minerals. I worked as a roughneck at age sixteen--you could do that back then--running the Kelly rig while a drunken driller ran the controls. My point? Getting oil out of the ground is hard, risky work. Sure, with computers and robots and safety features, it's less so. But anytime you get too sanguine about just how much oil there is, or how easy it is to get out of the ground, motor over to your closest shale basin and take a look at what's involved. There's a tremendous coordination of work forces, with a lot of moving parts, still with an element of existential risk and a heck of a lot of financial risk. It's a non-repleting commodity. Under great circumstances, a good operator can pull out only about 10% of the deposit. These wells are parabolic. It costs $3M to drill and complete a frack water depository well in Texas. Plugging a well these days (you have to plug 10% a year in Texas . . . talking about end of lifers . . . is a $30,000 deal. Sure, the massive Ghawar Field in SA is massive. But they are now pumping millions of gallons of seawater into those wells, which basically amounts to secondary stimulation. If you compare gasoline at the pump to a loaf of bread, a gallon of milk, a sandwich or a hamburger, oil should be about . . . $150/bll; do the math. Oil trades on sheer emotion. We have done almost nothing in this country to stabilize our energy system. I call it system, because despite having a Secretary of Energy from Texas, and despite all the talk and our country's trials and tribulations, we still don't have an energy policy. Almost all of our refineries depend on some pour-in heavy sour feedstock to even get the job done. We decided long ago not to shut down those refineries in order to make them more friendly toward light sweet--better to import the middle-carbon-length and heavy sour to mix in. We're overlooking huge markets: the Nord Stream II will run under the Baltic Sea from Russia to Germany; the Soud Stream will go to Turkey. The One Belt/One Road Initiative is the new Silk Road from China, through the Middle East, ending in Russia. Russia now is building an LNG pipeline supply down the spine of Pakistan to the warm water port of Lahore, which just happens to be China's main port in that area too. Wanna put a tariff on something? Put it on oil from places that truly want us dead. Don't encourage Saudi Arabia to pump and dump, because Russia hears that and guess what, they pump and dump too. Then we'll have an excess, and the price will overcorrect, and then we'll have another bust, and investment will fall, and then we'll boom again, because supply has dwindled, and then we'll encourage Saudi Arabia to pump and dump, and we'll import from bad places, and people who don't have any skin in the game will spend a hundred dollars for dinner for two and bitch about filling up the Lincoln Navigator for $75, despite the fact that cattle and chickens and fish reproduce, but oil doesn't. A good bottle of wine is $50, yet the winemaking business is like picking your nose compared to removing a barrel of oil from just above the mantle of the earth. I am obviously too old to be writing down my thoughts, as they just keep spilling out and I'm not all that articulate. But to listen to people complain about the price of oil is liking having another colonsoopy just to get a second opinion. Thanks for letting me use your board. I can at least save the $200 for a psychiatrist's fee. 

I share your frustration, Gerry, at the absence of a US energy policy. I am more distressed with the complete absence of any understanding regarding the role of prices, supply and demand on the workings of the industry. Our inept activities could be improved if a sound policy were adopted, but for a sound policy to be implemented would require us to first understand, fundamentally, how the business works, especially the mechanism whereby prices are formed and managed. You can be sure that the Texas-produced Secretary of Energy has not a clue as to why prices behave as they do.

Pricing is the single most important factor in our business, but our energy industry operates and plans on a platform of random roller-coaster prices. It is no wonder that it is a haphazard operation. Until we first gain an understanding of the fundamental workings of our business, I see little chance that we will do anything different.

I hope that I did not push you toward another $200 session.

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HaHa, no, I'm not going to the psychiatrist, but man, this is a tough time to be either a Republican or a Democrat. If a person voted for this president, and I did, it's very disconcerting to see the president tweet down the price of oil. He said he wants energy-independence. Well, there are certain hoops to jump through in order to get there . . . and the first one is to secure a sound and reliable stream of medium-chain and heavy crude to mix with the light sweet in our refineries. That source could just as easily be Canada. Their heavy stuff (tar sands) is so heavy it has to be heated to get it moving in the pipeline, especially in the winter, but it works fine as a minor mixture. Looks to me like it would have been easy to sit down and make a deal with them. The way to energy-independence is to let the free market take care of prices. Stop importing so much from OPEC and I'll guarantee the Permian, Eagle Ford, Bakkan, D-J Basin, SCOOP/STACK, Granite Wash and the rest will soon make us energy-independent. But in order to do that, in order to encourage drilling in tier 2 properties, and new properties like the Powder River Basin, we have to operate under the protection of $80-85 oil . . . that's just a fact of life. These boom and busts prevent energy-independence, in addition to making people crazy. We've got some great big deposits in this country. Perhaps the biggest of them all--the salty Paradox Basin--is just sitting there, waiting on someone to come up with an idea to separate out the salt, lithium, nickel, cobalt, magnesium, and give back water that can be reused to frack the next well on the pad. A tiny company called MGX may be solving that. An energy policy would see to it that an American company--or at least a participant--got in on the action. It's a damn shame that it's going to probably require a Middle East war in order to get us off the knife edge.

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1 hour ago, Gerry Maddoux said:

HaHa, no, I'm not going to the psychiatrist, but man, this is a tough time to be either a Republican or a Democrat. 

And now you know why I am and remain a firmly committed Monarchist!

I would also comment that long before salty oil gets tangled with, US coal will be attacked for conversion into diesel and gasoline.  That process is mature and well understood, the Germans ran their entire Wehrmacht and Luftwaffe on fuel from coal.  The US has the world's largest deposits of coal, easily 500 years' consumption that we know about so far, and probably quite a bit more that has not even been discovered.  

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In over 40 years as an independent oil and natural gas producer I've had to learn to live with some really stupid attempts at meaningful energy "policy" in America. The fella rowing our domestic oil boat at the moment has been, like many American's, brainwashed into a false belief of  shale oil abundance. Its everywhere, Mr. Trump believes (because Harold says so!), and there is so much of the stuff that he can use it as foreign policy tool.

But also like most Americans, Trump has completely ignored how expensive shale oil is to extract, that it is woefully unprofitable (as in it has never been profitable to extract), that it is essentially 'here today, gone tomorrow' (as in 85% decline rates the first 3 years of production life), that the upstream shale oil industry is a little south of $300B in debt and, short of $100 oil prices, sustained, will never be able to pay that debt back and sustain any dependable production rates America can count on. The United States shale oil phenomena is no miracle of technology, or "resilience;" its existence is based entirely on low interest QE credit and massive amounts of debt.

In the interest of full disclosure I am a conservative Republican and have made money (free of all costs, tank 'ye, Lord) in shale oil wells. Having said that, Mr.Trumps current hydrocarbon policies remind me of bumper cars at a theme park...  

 https://www.oilystuffblog.com/single-post/2018/07/10/Cartoon-Of-the-Week

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No no i never get offended, I just didn't want you to put me in same category as those others.

For Example, Just last year  the so called Oil Gd, Andy Hale, started an Oil Hedgefund, due to him having success when he traded Oil for City bank. So It looks like he started some OIl Hedgefund in 2016, or early 2017. From what I gathered it had about 1.4 Billion invested, or more. Well of course in Early 2017 or late 2016 was not the time to buy OIl, but I guess his people or himself thought Oil had bottomed at about $50 or so. Chart still showed another drop to come. Well anyways his fund went down 30% and he just closed the fund, in August 2017. So even people with amazing experience, are getting it wrong, but in a very large way.And I will say  that even looking at charts, could end up, just being a guess, for most.

So no worries even when I am wrong, I have the best to support me.

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4 hours ago, Top Oil Trader said:

No no i never get offended, I just didn't want you to put me in same category as those others.

For Example, Just last year  the so called Oil Gd, Andy Hale, started an Oil Hedgefund, due to him having success when he traded Oil for City bank. So It looks like he started some OIl Hedgefund in 2016, or early 2017. From what I gathered it had about 1.4 Billion invested, or more. Well of course in Early 2017 or late 2016 was not the time to buy OIl, but I guess his people or himself thought Oil had bottomed at about $50 or so. Chart still showed another drop to come. Well anyways his fund went down 30% and he just closed the fund, in August 2017. So even people with amazing experience, are getting it wrong, but in a very large way.And I will say  that even looking at charts, could end up, just being a guess, for most.

So no worries even when I am wrong, I have the best to support me.

Be assured that I detected your being in a different category early on.

I learned about trading oil futures the hard way. I though that it was oil trading. Sometime later I was forced to realize that not only was it not oil trading, the fact was that the better you understood real oil, the worse would be your futures trading results. Your comments told me that you are aware of the reality of oil futures trading -- it is a historical chart inspired short term game. Apparently you are good at playing that game, whereas I am a terribly poor guesser.

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4 hours ago, Mike Shellman said:

In over 40 years as an independent oil and natural gas producer I've had to learn to live with some really stupid attempts at meaningful energy "policy" in America. The fella rowing our domestic oil boat at the moment has been, like many American's, brainwashed into a false belief of  shale oil abundance. Its everywhere, Mr. Trump believes (because Harold says so!), and there is so much of the stuff that he can use it as foreign policy tool.

But also like most Americans, Trump has completely ignored how expensive shale oil is to extract, that it is woefully unprofitable (as in it has never been profitable to extract), that it is essentially 'here today, gone tomorrow' (as in 85% decline rates the first 3 years of production life), that the upstream shale oil industry is a little south of $300B in debt and, short of $100 oil prices, sustained, will never be able to pay that debt back and sustain any dependable production rates America can count on. The United States shale oil phenomena is no miracle of technology, or "resilience;" its existence is based entirely on low interest QE credit and massive amounts of debt.

In the interest of full disclosure I am a conservative Republican and have made money (free of all costs, tank 'ye, Lord) in shale oil wells. Having said that, Mr.Trumps current hydrocarbon policies remind me of bumper cars at a theme park...  

 https://www.oilystuffblog.com/single-post/2018/07/10/Cartoon-Of-the-Week

Creating oil policy with no understanding of the fundamental elements of the business is a guaranteed road to disaster.

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Are you saying if oil doesn't hit $100, the shale guys are going bankrupt? If that is the case, which way do you see oil going and how far? If you don't have a target, then in which direction do you think oil is going. Now should Oil hit my target of 62.5 or 50s, what would happen to the frackers?

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7 hours ago, Gerry Maddoux said:

HaHa, no, I'm not going to the psychiatrist, but man, this is a tough time to be either a Republican or a Democrat. If a person voted for this president, and I did, it's very disconcerting to see the president tweet down the price of oil. He said he wants energy-independence. Well, there are certain hoops to jump through in order to get there . . . and the first one is to secure a sound and reliable stream of medium-chain and heavy crude to mix with the light sweet in our refineries. That source could just as easily be Canada. Their heavy stuff (tar sands) is so heavy it has to be heated to get it moving in the pipeline, especially in the winter, but it works fine as a minor mixture. Looks to me like it would have been easy to sit down and make a deal with them. The way to energy-independence is to let the free market take care of prices. Stop importing so much from OPEC and I'll guarantee the Permian, Eagle Ford, Bakkan, D-J Basin, SCOOP/STACK, Granite Wash and the rest will soon make us energy-independent. But in order to do that, in order to encourage drilling in tier 2 properties, and new properties like the Powder River Basin, we have to operate under the protection of $80-85 oil . . . that's just a fact of life. These boom and busts prevent energy-independence, in addition to making people crazy. We've got some great big deposits in this country. Perhaps the biggest of them all--the salty Paradox Basin--is just sitting there, waiting on someone to come up with an idea to separate out the salt, lithium, nickel, cobalt, magnesium, and give back water that can be reused to frack the next well on the pad. A tiny company called MGX may be solving that. An energy policy would see to it that an American company--or at least a participant--got in on the action. It's a damn shame that it's going to probably require a Middle East war in order to get us off the knife edge.

Most people do not realize that most product demand is light oil, approximately 40° API. Billions of dollars have been spent for refining capacity to break down the large molecules of the heavier portion of crudes to change the oil from 20° API to 40° API product. This money was not spent because of a surplus of money, it was spent because, otherwise, the heavier oil would have to have been thrown away. Canadian oil is mostly heavy, about 12° API. It requires expensive equipment to convert it into the quality that flows out of the Bakken, West Texas and Saudi fields. US refiners still buy the heavy oil because they have already spent the money to convert the heavy stuff. But to choose, from the start, high cost conversion of Canadian oil versus running your own light oil would not be a wise or economical choice.

Self-sufficiency is a wonderful thought, but it comes at a price.

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Dear William, you say you are a terrible guesser of prices. Well I have good news for you, i don't know if you follow people like Peter Schiff, this guy is all over the news, but but has been proven wrong quite a few times, https://www.youtube.com/watch?v=LaP69CPrpeQ. Then we have the Oil Gd Andy Hall, who lost 30% of his hedgefund, going long at the wrong time, you must have heard of him. The we have Jim Rogers, this guy with the bow tie, he is all over the news, https://www.fool.com.au/2017/06/14/why-you-should-totally-ignore-jim-rogers-worst-crash-in-our-lifetime-call/. Then we have John Taylor who messed up a 14 Billion fund, https://www.orbex.com/blog/en/2017/11/tale-john-taylor-hedge-fund-titan-gone-bust. I can go on and on, the fact that you can't guess on prices correctly, does not in any way, make you less valuable in your opinions. I can tell you know a lot about the industry, way way too much. I think your posts, are extremely valuable, for people who are trying to gauge the future demand or supply of oil. But I do agree that it is sad and amusing when you listen to some of the famous gurus on oil out there, I am not famous, so I'm not part of that group. Cheers.

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25 minutes ago, Top Oil Trader said:

Are you saying if oil doesn't hit $100, the shale guys are going bankrupt? If that is the case, which way do you see oil going and how far? If you don't have a target, then in which direction do you think oil is going. Now should Oil hit my target of 62.5 or 50s, what would happen to the frackers?

May I take a shot at answering your question "Now should Oil hit my target of 62.5 or 50s, what would happen to the frackers?" The answer is that they will simply tighten their belts, borrow more money and keep producing while the price drops further. When it gets to the $30's they will start thinking different.

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2 minutes ago, Top Oil Trader said:

Dear William, you say you are a terrible guesser of prices. Well I have good news for you, i don't know if you follow people like Peter Schiff, this guy is all over the news, but but has been proven wrong quite a few times, https://www.youtube.com/watch?v=LaP69CPrpeQ. Then we have the Oil Gd Andy Hall, who lost 30% of his hedgefund, going long at the wrong time, you must have heard of him. The we have Jim Rogers, this guy with the bow tie, he is all over the news, https://www.fool.com.au/2017/06/14/why-you-should-totally-ignore-jim-rogers-worst-crash-in-our-lifetime-call/. Then we have John Taylor who messed up a 14 Billion fund, https://www.orbex.com/blog/en/2017/11/tale-john-taylor-hedge-fund-titan-gone-bust. I can go on and on, the fact that you can't guess on prices correctly, does not in any way, make you less valuable in your opinions. I can tell you know a lot about the industry, way way too much. I think your posts, are extremely valuable, for people who are trying to gauge the future demand or supply of oil. But I do agree that it is sad and amusing when you listen to some of the famous gurus on oil out there, I am not famous, so I'm not part of that group. Cheers.

Thanks, JJ.

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