So oil touched $80! (WTI break $71 twice). What does the future hold?

[Kaiser Soze + 14]

1 hour ago, ATK said:

I'd say the opposite, I think the market is way too focused on sanctions and not enough on trade tensions. Looking at the price action today, you can tell oil bulls are reluctant to let the price drop even though EIA showed a gas and crude build. Some people will say it's unimpressive, but really I think there is a trading bias where the Bulls rallying call is "IRANIAN SANCTIONS!!"

A pullback would be healthy at this point but too many traders have drunk the $100 a barrel Kool aid

1. I think you are misreading the EIA report.

This week's report showed small build but largely due to reduced consumption from last week's storms/hurricanes.

Put another way, if weather was good (as is this week), it would likely have been a draw.

2. Iranian sanctions cause uncertainty. It is easy to speculate in theory how many bbd will be lost. In practice, it is not easy to find new suppliers of Iranian crude as alternatives within short period of time. Saudis have agreed to convert some of their refiners to match the crude quality. But current consensus for most suppliers (esp China) is to de-stock and wait for greater clarity (or sanction loopholes). Might see a spike soon when all the dust settles. 

[ATK + 355]

58 minutes ago, Dan Warnick said:

It's hard to sell a drop in oil prices to the masses as a money making event.  Most small time traders, millions of them, drink the Kool Aid about shorting and do not do it.  You and I know that there is fundamentally no difference between a short and a long trade, but there is that Kool Aid that is on sale each and every day, and it tastes so good.  Oil up = make money; Oil down = don't trade/dangerous.  So, if the majors want to lure in as many Kool Aid buyers as they can to facilitate their money grab, they have to pump up a rising market to get the rest of the crowd in, and then lower the boom on them by driving down the prices until most small players (and not a few larger ones!) fold and take their losses.  Fear = Iran sanctions; Greed = rising prices due to Iran sanctions.  😎

I personally will be taking a break from trading oil until Iran sanctions kick in, data and facts are ignored over pure speculation. Go ahead bulls beat your chest to your hearts content about Iranian Sanctions, just don't be disappointed when it doesn't live up to your expectations of "$100 a barrel" 

[Dan Warnick + 6,100]

11 minutes ago, ceo_energemsier said:

https://www.cnbc.com/2018/09/25/80-oil-supports-investment-as-trumps-steel-quotas-biteshell-ceo.html?__source=yahoo|finance|headline|story|&par=yahoo&yptr=yahoo

 

https://www.thestreet.com/markets/commodities/oil/houston-we-have-a-solution-14720548?puc=yahoo&cm_ven=YAHOO&yptr=yahoo

The article "Houston, We Have a Solution" highlights something that many other news bits point out all the time, but that for some reason not many seem to take into account:  Every other time in the last, what, 50 years that the threat of Iran oil (or some other major producer) being removed from the supply chain, there was no 10+ million barrels per day of U.S. oil!  There was not 3+ million barrels per day coming off the dock in Houston.  This "Iran crisis" is nothing of the sort any more.  It's old news that has nowhere near the impact it once had.  It's a whole new ballgame.

[ATK + 355]

2 minutes ago, Kaiser Soze said:

 

2. Iranian sanctions cause uncertainty. It is easy to speculate in theory how many bbd will be lost. In practice, it is not easy to find new suppliers of Iranian crude as alternatives within short period of time. Saudis have agreed to convert some of their refiners to match the crude quality. But current consensus for most suppliers (esp China) is to de-stock and wait for greater clarity (or sanction loopholes). Might see a spike soon when all the dust settles. 

Here's the thing, the Saudi's went on to say that supply is currently meeting demand and that "they don't know any refiners whose supply needs are not being met". So from the sounds of it people aren't scrambling to find other sources of oil right now.

Like I said earlier, either OPEC is lying about demand or speculative traders are holding too much weight on the supply side of Iranian sanctions.

[Osama + 248]

3 hours ago, ATK said:

Personally, I think the market won't be as tight as traders originally forcasted and the market will trade within a range

That is perhaps the best way to think of it. Today after EIA's inventory report...wr can see the market hasn't responded at all.

[ATK + 355]

25 minutes ago, Kaiser Soze said:

1. I think you are misreading the EIA report.

This week's report showed small build but largely due to reduced consumption from last week's storms/hurricanes.

Put another way, if weather was good (as is this week), it would likely have been a draw

I don't think I'm misreading the report at all, the report showed that refineries reduced production by 900,000 barrels a day indicating to me that they are switching over to seasonal maintenance season, we will likely see further declines as we head more into winter. Additionally, the past 5 weeks with (with the exception of last week for gas), distillates and gasoline have seen nothing but builds where crude fluctuated in terms of crude draws. The market cherry picks data based off of what the weekly narrative and this week the EIA report is "no big deal" you know why? IRANIAN SANCTIONS! (Good to have a universal answer that you can pull out whenever you need to justify going against actual data and inventory reports).

[Kaiser Soze + 14]

27 minutes ago, ATK said:

Here's the thing, the Saudi's went on to say that supply is currently meeting demand and that "they don't know any refiners whose supply needs are not being met". So from the sounds of it people aren't scrambling to find other sources of oil right now.

Like I said earlier, either OPEC is lying about demand or speculative traders are holding too much weight on the supply side of Iranian sanctions.

Yes, which is why I said "But current consensus for most suppliers (esp China) is to de-stock and wait for greater clarity (or sanction loopholes)."

Hedge funds and quants (who drive speculative trading) base their positions on empirical data of storage well levels. Observation is that China are destocking and also not buying now (because of Iran sanctions). Devil is in the details - these suppliers will have to restock later.

I think you need to see Saudi's choice of words. They are right to say supply meets demand - I mean c'mon supply is always going to meet demand, but just at what price?

 

[Kaiser Soze + 14]

2 minutes ago, ATK said:

I don't think I'm misreading the report at all, the report showed that refineries reduced production by 900,000 barrels a day indicating to me that they are switching over to seasonal maintenance season, we will likely see further declines as we head more into winter. Additionally, the past 5 weeks with (with the exception of last week for gas), distillates and gasoline have seen nothing but builds where crude fluctuated in terms of crude draws. The market cherry picks data based off of what the weekly narrative and this week the EIA report is "no big deal" you know why? IRANIAN SANCTIONS! (Good to have a universal answer that you can pull out whenever you need to justify going against actual data and inventory reports).

Um I think you should look at the algo price action seconds after the EIA report was announced. Clearly bullish reaction to the numbers by the bots. Expected a far larger crude draw.

[ATK + 355]

11 minutes ago, Kaiser Soze said:

Um I think you should look at the algo price action seconds after the EIA report was announced. Clearly bullish reaction to the numbers by the bots. Expected a far larger crude draw.

Bots are dumb and easy to trick, that's why when I read the report I wasn't worried. Give it time for the market to react.

Just like last week, based on the sell volume you could tell bears were looking for anything to start a sell off. So when the EIA report came out as squarely bullish, bears did what they could to keep the price down, but you can only swim against the current for so long until you tire yourself out. Sure enough we hit $72 a barrel once bears finally gave in

Edited September 26, 2018 by ATK

[ATK + 355]

Fed report coming out at 2 also, rate hike =bearish for oil

[Osama + 248]

25 minutes ago, ATK said:

Fed report coming out at 2 also, rate hike =bearish for oil

Yes....Oil has already tamed a bit. I believe the upcoming refinery maintainence season and dollar strength plus when Trump in the coming weeks...get on to trade war once again...we will see a correction. 

 

(I being irritatingly reiterating...sorry).

 

Update: https://www.cnbc.com/2018/09/26/us-bonds-and-fixed-income-fomc-decision-in-focus.html

 

The Federal Open Market Committee concluded its September monetary policy gathering Wednesday and elected to hike the federal funds rate by one quarter-point. The hike pushes the funds target to 2 percent to 2.25 percent, where it last was more than 10 years ago.

 

Edited September 26, 2018 by Osama
update

[Dan Warnick + 6,100]

24 minutes ago, ATK said:

Fed report coming out at 2 also, rate hike =bearish for oil

We'll see.  These short term moves seem to be contradictory in many cases these days.  That goes for other markets as well.  We'll see.

[ATK + 355]

1 hour ago, Dan Warnick said:

We'll see.  These short term moves seem to be contradictory in many cases these days.  That goes for other markets as well.  We'll see.

Yeah, especially with.... IRANIAN SANCTIONS!

[Dan Warnick + 6,100]

4 hours ago, ATK said:

Yeah, especially with.... IRANIAN SANCTIONS!

The sun is just coming up here and it's looking like it's going to be a lovely day....except for IRANIAN SANCTIONS!

😮

[oilfutures + 39]

You've been nailing these moves ATK, I am listening

[Aljo + 1]

On 9/23/2018 at 7:17 PM, J S said:

Blah ha ha ha ha! I love monkeys.

 

https://www.youtube.com/watch?v=swiRQ20HcF0

 

That said: 

https://www.bloomberg.com/news/articles/2018-09-23/saudi-russia-reassurance-on-oil-supply-lacks-solid-guarantees?srnd=premium

 

and

• All Prices
• OPEC Blends
• Canadian Blends
• U.S. Blends

WTI CRUDE •11 mins

71.54

+0.76

+1.07%

 

Sustainability blah ha ha ha !

If the world was logical and sustainable we would never have Trump as president and so many farmers blowing their brains out because they are going belly up because soybeans are less than 8.50 a bushel, and World War I would have never happened.  Wait: Fake News!  World War I never happened and Farmers are doing fine a dandy and love the tariffs.

Oil prices above 80 might not be sustainable for some but are very sustainable for the people selling it.

It is all a matter of perception.  That said understanding other people's perception is how you make money!

 

Do a lot of farming, eh?  

sure.

Sure have the TDS going though.  

[Osama + 248]

EU is considering an alternate plan to sidestep "IRANIAN SANCTIONS"

"Legal sanctions experts and oil traders said the creation of a special purpose vehicle and payments channel to keep trade open with Iran, unveiled this week by EU Foreign Affairs chief Federica Mogherni, would still leave traders handling crude from the Islamic Republic vulnerable to punitive actions by the U.S. treasury department."

https://www.bloomberg.com/news/articles/2018-09-26/eu-plan-to-sidestep-iran-sanctions-won-t-keep-its-oil-flowing

[Dan Warnick + 6,100]

4 hours ago, Osama said:

EU is considering an alternate plan to sidestep "IRANIAN SANCTIONS"

"Legal sanctions experts and oil traders said the creation of a special purpose vehicle and payments channel to keep trade open with Iran, unveiled this week by EU Foreign Affairs chief Federica Mogherni, would still leave traders handling crude from the Islamic Republic vulnerable to punitive actions by the U.S. treasury department."

https://www.bloomberg.com/news/articles/2018-09-26/eu-plan-to-sidestep-iran-sanctions-won-t-keep-its-oil-flowing

IRANIAN SANCTIONS!  Like I said, does the bureaucrat or corporate buyer take the risk of Iranian oil being intercepted?  Or do they buy from IRANIAN SANCTIONS-free suppliers, ship on legitimate ships with legitimate full coverage insurance, and do it all out in the open to supply their long term needs?  There has to be more than one bureaucrat saying "what if the Americans blow up the tanker, Prime Minister?!?".  

[ATK + 355]

Rick Perry said they won't sell US reserves to offset oil prices (media headline and where bulls stop reading)....... because he says producers are more than capable of offsetting global shortfalls.

So yeah, we are in full blown $100 a barrel speculation mode

[ATK + 355]

https://www.cnbc.com/amp/2018/09/27/saudi-arabia-will-quietly-add-extra-oil-to-the-market-to-offset-a-drop-in-iranian-production.html

 

Saudi Arabia will be adding more barrels to the global market, who here thinks the media will put a bullish spin on it or mostly ignore it altogether? 

Edit: CNBC is bipolar, they posted this after the first one

https://www.cnbc.com/amp/2018/09/27/iran-sanctions-could-push-oil-prices-above-100-strategists-say.html

Edited September 27, 2018 by ATK

[ATK + 355]

What do you say when stuff comes out about Saudi Arabia increasing production? Simple! Speculate they don't have spare capacity! Bullish momentum saved!

Edit: https://seekingalpha.com/article/4208495-weekly-oil-storage-report-refinery-turnaround-season-underway

Refinery maintenance season you say? Well.... IRANIAN SANCTIONS!!!!

Edited September 27, 2018 by ATK

[Osama + 248]

1 hour ago, ATK said:

What do you say when stuff comes out about Saudi Arabia increasing production? Simple! Speculate they don't have spare capacity! Bullish momentum saved!

Edit: https://seekingalpha.com/article/4208495-weekly-oil-storage-report-refinery-turnaround-season-underway

Refinery maintenance season you say? Well.... IRANIAN SANCTIONS!!!!

Hah! Well....I was searching for some articles on Oil on Google and all of the headlines were "Oil edges higher due to IRANIAN SANCTIONS" or "Supply Concerns drives oil to 4 year high". 

The job of the editors just got easy!

[ATK + 355]

On 9/27/2018 at 10:57 AM, Osama said:

Hah! Well....I was searching for some articles on Oil on Google and all of the headlines were "Oil edges higher due to IRANIAN SANCTIONS" or "Supply Concerns drives oil to 4 year high". 

The job of the editors just got easy!

God I'm just sick and tired hearing about it, just want it to be November so everyone can shut the f*** up about it already god damn

[Dan Warnick + 6,100]

The Kavanaugh Senate sex allegations hearing is in recess, probably due to someone bringing up IRANIAN SANCTIONS!

[ATK + 355]

Literally nothing will stop $100 barrel of oil, go ahead bulls! It's all yours! Iranian sanction to your hearts content !!!!

Every news article out there buries the truth of, they don't want cheap oil! Barely any body has said anything about the Saudi''s output and the one article that does puts a spin on it by saying "they are conflicted due to potential supply gluts"

Market is well supplied with prices reflecting supply concerns! It makes perfect sense!

Edited September 27, 2018 by ATK