WTI now at $70+ headed for $50s

[Top Oil Trader + 469]

Why? It is quite simple. I can't go into it. But the thing that many of you say don't work, (my chart forecasts), are telling me quite clearly now that a some point this year WTI will hit in the 50s. The drop below 70 will come this week. AS regards to my systemes i have been working on, in the Forex market hardly any losses. Here is one more thing, the Emerging Markets are also in for a big drop, as well as the EURO, POUND, and YEN, even GOLD could hit about 1,100.

[Top Oil Trader + 469]

I will try to keep this as simple as possible.

First lets look at the Dollar and compare it to Crude prices.

In Jan 2016 Oil Prices where 41 give or take. The Dollar at that same date was 98.40 give or take.

Dollar price today is 95.13, and WTI is at 70.

My forecast for the dollar is about 98.50, which comes out at 41. But I gave the oil prices leeway since this science is not exact, and said WTI would hit in the 50s.

So let's assume my target is not 100% accurate, and, lets say the Dollar doesn't actually hit 98.50 but somewhere below, still that would make the Crude prices drop quite a bit.

But let's drop the dollar forecasts for a minute, and lets just look at it fundamentally.

But what would cause this glut. Easier ways to move shale. Cheaper production costs. Certain countries still trading with IRAN against US sanction, however in the meantime over production by OPEC to meet, reduced supply from IRAN. Besides if the currencies around the world drop, the US are forced to reduce oil prices, to not cause economic stress on the countries with decreasing currency values.

Why would the currencies drop around the world. Firstly US wants to increase interest rates from 3%. So that would make lots of entities buy US bonds as opposed to other countries where rates are 0% or .5%

 

[Top Oil Trader + 469]

Here is a very fundamental reason why oil will go down. When oil hit high prices it was not affordable for people, and immediately the balls where set in motion to not rely on oil. Solar, EVs,  Nuclear energy etc. And this continues even when oil dropped. At this point even if oil goes to $200, many people don't care, since they have solar panels, electric vehicles, wood burning stoves etc. This fact alone has brought down the demand for now and for the future.

[Dan Warnick + 6,100]

39 minutes ago, Top Oil Trader said:

Here is a very fundamental reason why oil will go down. When oil hit high prices it was not affordable for people, and immediately the balls where set in motion to not rely on oil. Solar, EVs,  Nuclear energy etc. And this continues even when oil dropped. At this point even if oil goes to $200, many people don't care, since they have solar panels, electric vehicles, wood burning stoves etc. This fact alone has brought down the demand for now and for the future.

Okay, finally an opinion about alternative energy sources that I can agree with.  The reason?  Because you are not claiming that they are fast on their way to replacing oil based energy (carbon based?).  There is an undoubted effect of alternative sources on the demand in oil.  The fact is just like @William Edwards points out about oil prices really having nothing to do with oil, it is simply a trader's market essentially.  So, in my opinion, when oil prices go up, there is even less reality involved (i.e. alternative sources are in fact replacing some of the demand.  It might be a small amount or a large amount, but it's there and growing).

[Top Oil Trader + 469]

Dan you and Mr Edwards are exactly correct, Everytime oil will go much above 70 it will only make the path to alternatives much faster. Even if oil hits 50, they will still be at full steam coming out with new Teslars, Solar window power, solar powered cars etc. Yes the war is on, and has been for many years. Dan remember my target for the dow 29,969. Maybe shortly after that, we could see fireworks.

[Dan Warnick + 6,100]

11 minutes ago, Top Oil Trader said:

Dan you and Mr Edwards are exactly correct, Everytime oil will go much above 70 it will only make the path to alternatives much faster. Even if oil hits 50, they will still be at full steam coming out with new Teslars, Solar window power, solar powered cars etc. Yes the war is on, and has been for many years. Dan remember my target for the dow 29,969. Maybe shortly after that, we could see fireworks.

Thanks for the reminder about what you see with the Dow.  I just took a position on the S&P500 today and I've got my skis all waxed up and ready!

[Top Oil Trader + 469]

Wax can help, if you use the right brand 😉

[Top Oil Trader + 469]

I wont be saying if the dow is going up or down right now, since i dont want to waste your time.

You see in all these instruments oil, dow, euro, pork bellies, you need to understand the land the instrument lives on.

I'll just talk about the dow, ok. Right now while other econs are collapsing, brexit, S. Africa, S. America etc, where do you think the money goes? to US. However, the int rate in us is kind of high 3% as opposed to say 0% in japan. If Us keeps raising what happens? good answer, liquidity dries up not just here but other markets too. Who gets hit first, Turkey, Argentina etc. So far so good? Then lets continue. 

While their markets fall the Dow, and co. continues to go up, until, you guessed it. So investing here, it will go up some more, some more, and then when liquidity is up, down and down she goes. The exact level where that happens, only 1 person (entity) knows. I think though the dow will hit 29969, before liquidity hits the fan.

[ATK + 355]

4 hours ago, Top Oil Trader said:

Here is a very fundamental reason why oil will go down. When oil hit high prices it was not affordable for people, and immediately the balls where set in motion to not rely on oil. Solar, EVs,  Nuclear energy etc. And this continues even when oil dropped. At this point even if oil goes to $200, many people don't care, since they have solar panels, electric vehicles, wood burning stoves etc. This fact alone has brought down the demand for now and for the future.

Lol here is some FA for you, people got overly excited about the tropical storm hitting the gulf Coast and pushed oil above $71. EIA reports are a week behind so this storm has no effect on this week's crude inventory. Genscape, a very reliable oil analyst group, is claiming a crude build at the kushings facility due too pipeline bottle necks. Additionally, for the past 4 years, crude oil prices have always fallen the week after labor day. You add all this with the fact that the dollar is gaining strength due to doubts with emerging markets/interest rate hikes, everything points to oil heading down.

At the start of august, when oil was around $69.40, you also claimed oil would be between 70-80 by the end of the month, it closed at $69.80, but not after going back down to $64 first. So if you make enough guesses, I'm sure your bound to be right eventually.

Still waiting on that $205 apple call you made (its close to breaking $230)

Edited September 4, 2018 by ATK

[Tom Kirkman + 8,860]

No idea what is prompting the downvotes for Top Oil Trader's comments here.  Personally, I don't see anything objectionable, unreasonable, offensive or off topic by TOT for this forum.  No reason that I can see for multiple downvoting.  Scratching my head here.  Anyone can please feel free to message me if you have any issues or complaints.

[Top Oil Trader + 469]

Tom, well thank you for standing up for me my friend. I don't care if people down vote, its freedom of speech. I am so busy with trading Tom, that I dont even notice it, I post my comments on Oil though i dont trade it, since it is always exciting for me to look at charts and talk about them, or talk about any tradable commodity. I do realize that most want oil to go up, Barclays said today they think crude will go up $25. The fact that I say oil will drop to the 50s, and if that comes true, would mean lots of investments would blow up. However, I am not hoping oil drops, all im doing is putting 1 and 1 together, either from charts or from the fundamental picture. I say to all the down votes, (only heard this term today), BRING IT ON !.

[Tom Kirkman + 8,860]

Heh heh, I've received downvotes on this forum as well, Top Oil Trader.  Mostly I find downvotes to my comments amusing.  Heck if you comment on Zero Hedge for example, expect to be downvoted into oblivion if you poke a sacred cow too hard.

Anyway, I just don't see any particular reason for multiple downvotes to your comments in this thread.  This is generally a friendly forum, where amicable discussions rather than downvotes are encouraged.

[Top Oil Trader + 469]

Yes indeed like i have said before the people here are indeed very friendly, this is what a forum should be like. Lots of other forums fights are always breaking out over nothing, sometimes i need to get my whistle step in and referee.

 

 

[Top Oil Trader + 469]

WellI mentioned that WTI would hit uner 70 this week. Here it is!, now at 69.5. Now more pain to follow, not sure if it goes straight to 50s, but it will be a slow painful descent.

[Dan Warnick + 6,100]

The Hong Kong Hang Seng is down 674 points (2.41%) so far today.  Let's see what Europe and New York do later.

[Top Oil Trader + 469]

Yes the stock markets of the poorer countries so Latin American, S. Africa, Eastern Europe are the first to take a hit. But i guess the market wants to be fair, and not leave anyone out. But  i mentioned earlier that as the markets of the EM, (that stands for emerging markets) get hit, the investors or governments will have no choice but to invest in the US, which will make the dow, sp etc go up.

[Dan Warnick + 6,100]

2 minutes ago, Top Oil Trader said:

Yes the stock markets of the poorer countries so Latin American, S. Africa, Eastern Europe are the first to take a hit. But i guess the market wants to be fair, and not leave anyone out. But  i mentioned earlier that as the markets of the EM, (that stands for emerging markets) get hit, the investors or governments will have no choice but to invest in the US, which will make the dow, sp etc go up.

Seems like solid logic, and I am trying to get my head around where the overall U.S. market is going short term and longer term.  I'm also not sure how the Hang Seng reflects mainland China, given its history, but I am watching and trying to gain some insight there as well.  For today though, all of the Asian exchanges are down significantly, just not as much as Hong Kong.

[Top Oil Trader + 469]

JS. Hi no i don't have any money on oil, except for what is in my car. But the Iran story has been told, its old and won't affect the prices of oil. Actually it will affect price of oil, by making the crude prices go down even further. As regards to President Trump, he will not get impeached, not only that, but  he will win the next election, will be the biggest upset in history.

[Dan Warnick + 6,100]

55 minutes ago, J S said:

Do any of you have any of your own money based on your prognostications?  I guess it is based on your honesty.  You got 100k, 500k, 1 million or more on any of this?  I play oil because it is so volatile and can better be predicted based on the behavior of the rulers.  I am long about 1 M.  However for me Long is 3 months to a year.   I am betting on the mad king making me a lot of money.  That said it would not surprise me if oil floats in the 60's till after the elections.    My hope is monkeyboy mixes it up with Iran, we board a tanker going to India.  Oil pops.  He gets booted and the sanctions are taken off.  Then the world economies heat up again and oil goes even higher.  As Mueller ties the rope tighter Trump should panic and pull a Bush1 focusing our attention on Iran-instead of Iraq. Nothing like a good war to get the jingoists to bump his popularity.  Then he will try to fire Mueller's boss and Mueller.  Then he gets tossed by that article which allows his cabinet to toss him.  Dems will not want to impeach him.  He is too good for the party.   If they control the house, they will have a leash on him.  Republicans will want to get Pense in to 'stop the madness' and try to salvage something.  Dear Mr. President, i encourage you to bomb Iran... heh heh heh.  Right now Trump is trying to get oil down before the elections.  11 million released from our reserves should bump it down a little. Most is going to US oil companies.  After the elections watch the fireworks and Pop goes the wheel.

I can only wish I had 1 M to lose.  🙃  I'm with JJ on the rest of your post.  I'll go further, though:  There is a lot of evidence piling up that indicates Trump is going to come out of all this investigative BS well on top of the heap.  In fact, we may see some very well known Democrat figures in handcuffs soon.  The U.S. markets, at least, are about as hot as they can get, so we should expect the Fed to keep raising interest rates, which may then help trigger the next recession no matter what politics is going on and no matter what people want to be true.  The world might be surprised to find that Mueller's big reveal is quite the opposite of what they have been led to believe it will be.  AG Jeff Sessions could even rise up to become known as a legendary crime fighter/corruption buster.  Donald Trump wants to break the chain of U.S. military involvement around the world and I would bet your 1 M that he won't use that particular tool for political purposes.  But any potential adversary wishing to test his resolve will most likely find themselves facing a President of the United States with the firm backing of both the citizenry and the military, possibly even including all or most U.S. allies.  In other words, he will not use the military for any except clear threats against the U.S. or its allies, and he would insist on no half measures.  It is not lost on this President that he can do far more damage to Iran with economic pressure, with far less long term risk, than using boots on the ground.  Finally, who do you think is on Trump's cabinet that would try to oust him?  His daughter?  His son in law?   Mike Pompeo?  General Jim "Mad Dog" Mattis?  Jeff Sessions?  Ben Carson?  Mike Pence?  Rick Perry?  Elaine Chao?  Betsy "the Brains of the Outfit" DeVos?  John Kelly?  Who?  Maybe Linda McMahon, I'll give you that.  I mean, look at this lady and her resume':

Edited September 5, 2018 by Dan Warnick

[Top Oil Trader + 469]

DW I think i will ask OILPRICE to make you a veteran poster.

[Dan Warnick + 6,100]

5 minutes ago, Top Oil Trader said:

DW I think i will ask OILPRICE to make you a veteran poster.

To steal a response:  I'm here all week.  Try the beef stroganoff.  LOL!

[Dan Warnick + 6,100]

A bit of blood in the streets:

[Dan Warnick + 6,100]

3 hours ago, Top Oil Trader said:

WellI mentioned that WTI would hit uner 70 this week. Here it is!, now at 69.5. Now more pain to follow, not sure if it goes straight to 50s, but it will be a slow painful descent.

Pretty fast move in pre-opening:

[Dan Warnick + 6,100]

3 hours ago, Dan Warnick said:

Sorry, I just couldn't help myself.  This lady is like Chuck Norris!  Look at her resume' again:

1. "Assumed office: February 14, 2017"  It doesn't say appointed on, she just Assumed it.  I think she showed up and nobody had the guts to tell her no.

2. She "Assumed" the office on February 14, Valentine's Day!  May I remind everyone what happened with Al Capone and the Saint Valentine's Day Massacre?  No wonder nobody told her no.

3. Age: 69 - Trump must have fell in love with her immediately.

4. Fun fact:  She was co-founder of the WWE!  This is arguably the premier "deplorables" sport in America!  You think Donald didn't see the beauty in that?  Take that, Hillary!  LOL!  You gotta have this lady on your team, that is as long as she says it's ok.

Edited September 5, 2018 by Dan Warnick

[Bhimsen Pachawry + 72]

18 hours ago, Dan Warnick said:

Okay, finally an opinion about alternative energy sources that I can agree with.  The reason?  Because you are not claiming that they are fast on their way to replacing oil based energy (carbon based?).  There is an undoubted effect of alternative sources on the demand in oil.  The fact is just like @William Edwards points out about oil prices really having nothing to do with oil, it is simply a trader's market essentially.  So, in my opinion, when oil prices go up, there is even less reality involved (i.e. alternative sources are in fact replacing some of the demand.  It might be a small amount or a large amount, but it's there and growing).

Traders only determine some amount of the price in +-5% of the range. Rest is determined by the oil suppliers setting the political price.

19 hours ago, Top Oil Trader said:

Here is a very fundamental reason why oil will go down. When oil hit high prices it was not affordable for people, and immediately the balls where set in motion to not rely on oil. Solar, EVs,  Nuclear energy etc. And this continues even when oil dropped. At this point even if oil goes to $200, many people don't care, since they have solar panels, electric vehicles, wood burning stoves etc. This fact alone has brought down the demand for now and for the future.

 

18 hours ago, Top Oil Trader said:

Dan you and Mr Edwards are exactly correct, Everytime oil will go much above 70 it will only make the path to alternatives much faster. Even if oil hits 50, they will still be at full steam coming out with new Teslars, Solar window power, solar powered cars etc. Yes the war is on, and has been for many years. Dan remember my target for the dow 29,969. Maybe shortly after that, we could see fireworks.

There is no solar or EV that can substitute oil. Oil is much faster and stable than all alternatives. Also, organic chemicals need oil and there is no substitute to organic chemicals.

EV is too slow and problematic. They definitely can't be used for commercial vehicles and have a variety of problems which make them very inconvenient. Solar energy is highly unreliable with clouds and night time interfering. 

Not everything in the world is substitutable. That is why people used to face famines. Even in 1990s, North Korea faced famine. In 1960s, China faced famine. In 1930s, USSR faced famine. Before colonial raw material supply, the west Europe faced famines. The answer to deficient supply is mass death, famines and war, not substitution