Oil (WTI $69.30) headed for $80, in August.

[Top Oil Trader + 469]

Well it depends, if we look at the new oil discoveries, or shale production seems we're go down. War in Middle east OIl goes up. What do producers want? oil prices up. What do consumers want? oil prices down. Who has more pull? I let you answer that question. Like I said if you want you can trade oil prices up and down daily as it ranges about 150+ basis, just catch the low get out at top, or catch the high get out at the bottom. Easier said than done. don't try this at home.

But long term were are we headed? This is what nations, producers and investors care about. For the immediate run, we are headed above $80, proving the $80 range analysts correct Notice while oil is down for 4 weeks from 76 we hit 66, no one is daring to come up with any new predictions. Fundamental analysts, and chartists right now  are simply baffled, right now about the long term price for oil. This is where I come in, simply looking at longer range charts, next week oil prices should start off with a slight dip,  and then as the month goes on, oil should hit prices above 80.

What is the news that could get it there? Pick a number. Could be some escalation in the Middle East, comment from one of the producers. Bottleneck. etc.

Disclaimer. Trading futures is risky, you could lose more than your investment, you shirt, pants, or leg, arm, or both.

Edited July 27, 2018 by Top Oil Trader

[jaycee + 348]

I think we are going up short term. I don’t trade futures but oil related companies and have bought recently accordingly having sold out after the announcement a while back that OPEC were going to increase production. Turns out the final deal wasn't what the initial hype made it when I sold but now I see too many negatives with Iran's threat to the vital oil routes being the main one.

Long term oil for me is impossible to predict there are so many variables and I believe nobody can predict it apart from by fool’s luck. The lack of exploration over the last few years will catch up some time but then peace may break out in the Middle East and Venezuela get sorted out with a new administration and become a large oil producer again. Electric cars will eventually take a bit of the oil market but we are a long way from having the infrastructure to support them whether it be charging stations or battery changer depots or both. Plus many other unknown unknowns that may affect things, who would have predicted Trump getting elected and causing so many waves in the oil market with his hatred of Iran.

[Jan van Eck + 7,558]

1 hour ago, jaycee said:

Electric cars will eventually take a bit of the oil market but we are a long way from having the infrastructure to support them whether it be charging stations or battery changer depots or both. Plus many other unknown unknowns that may affect things, 

I say again that the biggest shock to the oil markets will take place when the US Administration  (and likely slavishly copied by others) goes out and buys up two dozen used tunnel-boring machines and starts to punch holes in and under mountains, thus removing the up-and-down roads that consume so much fuel.  Building 100 tunnels at the 100 busiest roadway mountain grades will chop US transport fuels consumption by at least 30%, probably 40%.  

This one will blast you a 5-meter hole in one pass, but it does weigh 300 tons, so you need a seriously big airplane to move it.  The Antonov Mirya 225 should do the trick.  Hey, that's what they refine kerosine for!

[Jeffrey Brown + 207]

WSJ:  As Oil Industry Recovers From a Glut, a Supply Crunch Might Be Looming

Dearth of investments in oil projects mean a spike in prices above $100 could be on the horizon

(Behind paywall) 

https://www.wsj.com/articles/as-oil-industry-recovers-from-a-glut-a-supply-crunch-might-be-looming-1532775605#comments_sector

Veteran oil investor Pierre Andurand is betting on a multiyear bull run in oil. Mr. Andurand said Brent could hit highs of $100 a barrel this year and top $150 by the early 2020s. Others forecast more modest price gains but still believe a supply deficit will raise prices.

And as I noted elsewhere:

(1)  Actual global crude oil supply is probably around 70 million bpd, not the 93 million bpd total petroleum liquids number;

 

(2)  Global Net Oil Exports (GNE*) have been below the 2005 level of 46 million bpd for 12 years; 

 

(3)  The Chindia region has continued to consume an increasing share of GNE, with the volume of GNE available to importers other than China & India falling from 40 million bpd in 2005 to 32 million bpd in 2017. 

 

*Combined net exports of oil from (2005) Top 33 Net Oil Exporters, total petroleum liquids, BP + EIA data

 

 

Edited July 28, 2018 by Jeffrey Brown

[jaycee + 348]

14 minutes ago, Jan van Eck said:

I say again that the biggest shock to the oil markets will take place when the US Administration  (and likely slavishly copied by others) goes out and buys up two dozen used tunnel-boring machines and starts to punch holes in and under mountains, thus removing the up-and-down roads that consume so much fuel.  Building 100 tunnels at the 100 busiest roadway mountain grades will chop US transport fuels consumption by at least 30%, probably 40%.  

This one will blast you a 5-meter hole in one pass, but it does weigh 300 tons, so you need a seriously big airplane to move it.  The Antonov Mirya 225 should do the trick.  Hey, that's what they refine kerosine for!

Jan

you ever driven in Europe? Loads of tunnels through mountains. It may cut consumption a bit in the US but most other countries have been at it for centuries.

[Jan van Eck + 7,558]

6 minutes ago, jaycee said:

Jan

you ever driven in Europe? Loads of tunnels through mountains. It may cut consumption a bit in the US but most other countries have been at it for centuries.

Actually, I have NEVER operated a car or truck in Europe.  I am from Holland, and I take the train. 

Getting past that, there is still LOTS of room for more tunnels in Europe.  They have chipped away at the real biggies, yet I invite you to head for the poorer areas, starting at the Czech border and working over to Romania.  Plenty of roads going up and down. 

But the big fuel savers will be in the USA, where Americans are completely casual about driving these big-engined monsters that just suck the stuff up.  Build some tunnels on the Pennsylvania Turnpike, the I-80, the I-68, the I-90, and you will really dig deep into the fuel consumption picture. 

[jaycee + 348]

35 minutes ago, Jan van Eck said:

Actually, I have NEVER operated a car or truck in Europe.  I am from Holland, and I take the train. 

Getting past that, there is still LOTS of room for more tunnels in Europe.  They have chipped away at the real biggies, yet I invite you to head for the poorer areas, starting at the Czech border and working over to Romania.  Plenty of roads going up and down. 

But the big fuel savers will be in the USA, where Americans are completely casual about driving these big-engined monsters that just suck the stuff up.  Build some tunnels on the Pennsylvania Turnpike, the I-80, the I-68, the I-90, and you will really dig deep into the fuel consumption picture. 

I have driven in the Cech republic I worked there in '99 there wasn’t that many cars either though so the cost saving in drilling holes through mountains was not there. May have changed since then but its not like they have had the problem for long for them to get excited about it.

Regards the Americans the easiest solution is for them to actually put real taxes on fuel and make them use smaller cars drilling holes in mountains can be done once they use smaller cars. Pushing down American consumption though will not stop the rise in consumption in the developing markets of India and China so oil consumption savings will be lost there I would say.

Oh I have driven in Holland and I can understand you using the train :0) I even tried driving in Amsterdam and that was completely pointless.

Edited July 28, 2018 by jaycee

[Top Oil Trader + 469]

Pierre Andurand target is not $100, as stated earlier by people, his target is actually $300, i mentioned that in a post before. His target is the highest forecast by anyone. Way before that happens though, the SPRs will have been released, to keep prices down. Even once prices go above 80 which should happen in Aug 2018, there will be talk of SPRs being released.

Edited July 29, 2018 by Top Oil Trader

[Jeffrey Brown + 207]

Re:  Pierre Andurand

He was a little early in regard to calling a rebound from the early 2016 oil price lows, but he was certainly directionally correct, and he also accurately predicted the  2014 to 2015 decline. 

From the 4/5/16 WSJ:

Andurand Capital Management LLP, set up three years ago from the ashes of $2.4 billion hedge fund BlueGold Capital Management LP, has been one of only a handful of funds globally to correctly call moves in the price of oil since the summer of 2014, when crude began its marked slump.

Having bet against oil in September 2014, Mr. Andurand’s fledgling fund gained almost 60%—a profit of $160 million—in four months as the price of oil almost halved.

Edited July 29, 2018 by Jeffrey Brown

[Top Oil Trader + 469]

Levels where oil will hit resistance as it goes up to $80+.  So like I mentioned a lot of times, wti needs to stay above 69.5 for the up trend to resume, so far it found that level hard to stay above, oil should first hit in the 68.xx range. Once we can close above 69.5, we need to close above 70, then the last major obstacle will be 70.50, if WTI can close above that, then the next obstacle will be it's recent high towards 75. A close above that and 80 is next. 

If oil does close below 66, then it could go down to 62.50,   the charts for the immediate future does no longer show a selloff. The selloff we had started at about $75 4 weeks ago when I first mentioned it, and completed 2 weeks ago at 66.

Fundamentally speaking, pressure to the oil prices will come from various over supply news bits And support for higher prices, will be coming from support for the Iran war. The war in Iran, will be the dominant news article they will bring oil prices higher.

[Dan Warnick + 6,100]

6 hours ago, Top Oil Trader said:

Levels where oil will hit resistance as it goes up to $80+.  So like I mentioned a lot of times, wti needs to stay above 69.5 for the up trend to resume, so far it found that level hard to stay above, oil should first hit in the 68.xx range. Once we can close above 69.5, we need to close above 70, then the last major obstacle will be 70.50, if WTI can close above that, then the next obstacle will be it's recent high towards 75. A close above that and 80 is next. 

If oil does close below 66, then it could go down to 62.50,   the charts for the immediate future does no longer show a selloff. The selloff we had started at about $75 4 weeks ago when I first mentioned it, and completed 2 weeks ago at 66.

Fundamentally speaking, pressure to the oil prices will come from various over supply news bits And support for higher prices, will be coming from support for the Iran war. The war in Iran, will be the dominant news article they will bring oil prices higher.

So, essentially, uncertainty still rules the day?  The prices you mention would seem to indicate this pretty clearly and reinforce your earlier comments that the only short term trading to be made had better not be made by anyone not wanting to risk losing their shirts (arms, legs, etc.).

[Top Oil Trader + 469]

not at all. you misread my comments, which is ok, sometimes it is not clear.

So i am saying we go to 80 in August that is clear. What I am also saying is where all the bottlenectks will be on the way up. And should oil go down, which i don't see except hitting the 68.xx which it is right now, its close to 68.50. So like i mentioned oil at beg of week will first drop to and then will be headed up first to 69.5, 70.5 etc after a while 75 should break etc, and then 80s. But i did give the levels which is 66 that if it breaks then 62.5 is next, this doesn't mean  i see this as happening at least from the charts.

I usually write this very quick, it sometimes has grammar errors.

 

[Top Oil Trader + 469]

The fb news dropped the market like a rock. The fb news could be the beg of the end for the market, give or take a couple more surprises. Twitter could be next, then Google, even Amazon could get their estimates cut soon, due to major competition from others, cutting into their business. If Amazon misses next time, get ready.

[Top Oil Trader + 469]

Yes in oil  Pierre is so far one of the best oil investors, though for the first 2 months of 2018 his fund was down, not sure how its doing lately. Compare that to other funds that started in 2017 and lost 400 mill in a couple of months, and closed down.  But hands down the best oil forecastors out there is G Soros.

But here is why lots of the Oil Hedgefunds don't make it, just when Oil prices reversed up, like they did 2 weeks ago, they go short, on the way up https://www.cnbc.com/2018/06/04/hedge-funds-get-bearish-on-oil-as-shorts-hit-highest-in-6-months.html. Last week you might say was a classic reversal up for the oil prices, but this will become obvious to most once 75 breaks. By then their 67 oil shorts, will be down in the millions. Of course most Hedgies down stop out with just $1 or $2 move against them, so well see if they get out on time, or who knows maybe they will be right in their short oil trades. I don't know about Andurand, but from understand his trading, I would assume he is by now long, he does see the market different from the average trader.

[Dan Warnick + 6,100]

2 minutes ago, Top Oil Trader said:

The fb news dropped the market like a rock. The fb news could be the beg of the end for the market, give or take a couple more surprises. Twitter could be next, then Google, even Amazon could get their estimates cut soon, due to major competition from others, cutting into their business. If Amazon misses next time, get ready.

I agree.  FB shook the world, although I don't think anyone was all that surprised, or even sorry for them to be honest.  Twitter has already become "next" as they missed some target or another and their shares fell @20% as well.  In my opinion, Facebook's drop put a huge spotlight on them and other "FAANGs" and the result of that focus will be a major, much broader re-evaluation of many companies in the sector, and then a readjustment of their share prices, perhaps even more than -20%.  Absolutely right that there is major competition from others, in fact the FAANGs don't really offer much in the way of new technology and that is why there is major competition coming online from all over.  There are correction indicators all over the place.

[Top Oil Trader + 469]

agreed. lots of competition will come from chinese cos. they are already creeping in on amazon, apple and soon google. I guess one thing that will come out of it, that natural social media co will soon be created, who don't silence conservative or the christian view. Advertisers and new users, realized that since fb and others, sensor certain views, that means that many have lost interest in fb, and the investors saw the top of the iceberg, and  from what I see will slowly start dumping in big blocks. you might say that us had monopoly on the cars in 70s, japan slowly took the market over, and bankrupted the us car industry. I do expect the same to happen in technology, from cos, in china, russia, eastern europe, and Israel. Those countries will create better products and prices 70% current prices. So soon we will see comparable phones at $200 instead of $900, etc, Ipads at $200 instead of $800. The monopoly from amazon will be taken over in the products side by smaller cos, who specialize.

[Top Oil Trader + 469]

And then the only business Amazon will keep is their AWS (some say that stands for A Worthless System although it really stands for Amazon Web Services), but in any case, its likely will be taken over by some other co too, someone who can come up with the same solution at a much lower price factor, sure that is already in the works..

[Dan Warnick + 6,100]

Just now, Top Oil Trader said:

And then the only business Amazon will keep is their AWS (some say that stands for A Worthless System although it really stands for Amazon Web Services), but in any case, its likely will be taken over by some other co too, someone who can come up with the same solution at a much lower price factor, sure that is already in the works..

Oho, you have hit on a big one there since cloud services to the U.S. Government is really Amazon's cash cow.  As I recall Mr. Trump does not like Amazon or its leader, at all, to say the least, and given the opportunity to outsource the massive government contracts for cloud services to other vendors, he will take it and force it through.  He may even go as far as to having the government go into the cloud services business themselves.  If that happens, even by half, Amazon's goose is well and thoroughly cooked!

[Top Oil Trader + 469]

Yes Pres. Trump is not impressed with Mr. Money, indeed. We will see how that plays out. He is certainly looking for ways to cut down on expenses. So far he has done it with the defense budget, pharma drugs, and many more to come.  But if other cos, come out with a better way to skin the cat, they too could easily get the contracts.

[Top Oil Trader + 469]

When oil ranges as it has  in the last 3-4 weeks the easiest traders are in and out of 150 basis points. If you understand trading. Of course that is a big if for most. Besides OIl is the hardest instrument to trade for most traders, with stocks being the easiest, then futures (sp500, dow, etc), currencies and then Oil. To me they are all the same, but based on what we see in the trading world, this is usually from easiest to hardest. Of course OIl is part of futures too, but compared to say the sp futures oil is a lot harder for most to figure out. Which is why we have such disparaging forecast from so many experts, one giving us a $40 target, while others giving us a $300 target, and why we see some hedgefund loose in the 100 of millions, when making a wrong bet, it only takes 1 wrong bet to lose that much for those Billion $ funds.

However, when oil breaks out of its range, that is when you can just hold on and rake in the big bucks. So when it ranged from 70s to 25 it was an amazing move and very foreseeable on the charts, a move which destroyed many bulls, and then the move now from 25 to this range from 75 to 66, was another big move. Trick is to know when it ranges, (always a confusing point), to know when the trend resumes (an even more confusing point fo rmany), and then when the trend is reversing, (usually only a few get that one correct). In most cases what destroys traders who previously may have guessed the trend right, is when it gets to Elliot wave 3-4, for most this is where their luck runs out, since that is whey profits are giving back, or the weak get destroyed. Problem is most don't realize they are in wave 3-4 until its too late.Not saying elliot is the holy grail, but certainly wave 3-4 is where there is major confusion and uncertainties, by analysts, hedge funds and many traders. But elliots are subjective, and ask 10 traders you will always get 10 different answers, since many will look at the same moves and count it differently.

[Dan Warnick + 6,100]

2 hours ago, Top Oil Trader said:

Yes Pres. Trump is not impressed with Mr. Money, indeed. We will see how that plays out. He is certainly looking for ways to cut down on expenses. So far he has done it with the defense budget, pharma drugs, and many more to come.  But if other cos, come out with a better way to skin the cat, they too could easily get the contracts.

There are more key company earnings to be released this week.  I wonder if we see tech, and indeed the S&P500 overall, take a bit more of a dive.  Could it be the start of something more significant?  I guess we'll see as the earnings come out...

[Top Oil Trader + 469]

The start of the fall will be when the tariffs go into effect, and when Us in return will get hit by counter tariffs. The reason in a nutshell why there has not been a correction yet is simple. It simple mathematics, for of all yes some correction should happen, but why hasn't it so far. Well, if the pe is very high usually some correction takes place. Well with low interest rates, the cos been buying back their shares, therefore less outstanding shares, and therefore artificially the pe is higher, so the stock market prices is just a mirage, but in a  twilight zone. Once the feds, starts raising, and the tariffs hits, and the cos starts selling stock again, the PEs will go down, more public shares, and the domino effect will starting with the big boys, google, amzn, apple, etc and slowly trickling down, to others. So in short it is simple mathematics. If you look at it my way.

[Dan Warnick + 6,100]

1 hour ago, Top Oil Trader said:

The start of the fall will be when the tariffs go into effect, and when Us in return will get hit by counter tariffs. The reason in a nutshell why there has not been a correction yet is simple. It simple mathematics, for of all yes some correction should happen, but why hasn't it so far. Well, if the pe is very high usually some correction takes place. Well with low interest rates, the cos been buying back their shares, therefore less outstanding shares, and therefore artificially the pe is higher, so the stock market prices is just a mirage, but in a  twilight zone. Once the feds, starts raising, and the tariffs hits, and the cos starts selling stock again, the PEs will go down, more public shares, and the domino effect will starting with the big boys, google, amzn, apple, etc and slowly trickling down, to others. So in short it is simple mathematics. If you look at it my way.

Other than a couple of minor nuances, I do see it your way.  Not if, but when and how fast.

[Top Oil Trader + 469]

well yes it will be at some day. It will happen when the interest rates go up, or/and when quantitative easing goes down, and stock buyback decrease significantly, and or when tariffs hit back. I am not watching the dow charts too much. But from looking at the longer term charts, it is in the begging stages of setting itself up for a major retrace or worse. 

[Dan Warnick + 6,100]

36 minutes ago, Top Oil Trader said:

well yes it will be at some day. It will happen when the interest rates go up, or/and when quantitative easing goes down, and stock buyback decrease significantly, and or when tariffs hit back. I am not watching the dow charts too much. But from looking at the longer term charts, it is in the begging stages of setting itself up for a major retrace or worse. 

Like I said, there are correction indicators all over the place.  What will be the straw that broke the camel's back?  We'll see....