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

[Osama + 248]

50 minutes ago, ATK said:

Trump slammed OPEC in is UN speech and didn't focus much on Iran, things will get interesting when it starts making headlines

He said more sanctions will follow after November 5th sanctions!!!!!!!

[ATK + 355]

Just now, Osama said:

He said more sanctions will follow after November 5th sanctions!!!!!!!

He's talking about the ones that were already going to go into effect

[Osama + 248]

Just now, Osama said:

He said more sanctions will follow after November 5th sanctions!!!!!!!

But at the same time slamming OPEC...so...he has held oil prices in a certain range? 

[ATK + 355]

9 minutes ago, Osama said:

But at the same time slamming OPEC...so...he has held oil prices in a certain range? 

I'm expecting some kind of a pullback. The Bulls have their OPEC production news, but now that has resulted in a pissed off trump. From the sounds of it, they might have to cover more of the costs for protecting their own oil interests. Hope keeping production where it's at was worth it, because now they will likely lose more money having to spend on defense.

That stuff aside, the Fed is also going to raise interest rates tomorrow, strengthening the dollar and making oil more expensive to emerging markets. WSJ just came out saying $80 a barrel could push Turkey into a recession, India cutting back purchases as well. So as I said earlier, if bulls want higher oil prices, it's going to be on their own dime because I'm sure as hell not buying until we see some pullback

Also, trump made it very clear that he was not going to slow down with China at all, demand will suffer as a result and once people start seeing the impacts of the trade war, Iranian sanctions won't hold as much weight

Edited September 25, 2018 by ATK

[Osama + 248]

1 hour ago, ATK said:

I'm expecting some kind of a pullback. The Bulls have their OPEC production news, but now that has resulted in a pissed off trump. From the sounds of it, they might have to cover more of the costs for protecting their own oil interests. Hope keeping production where it's at was worth it, because now they will likely lose more money having to spend on defense.

That stuff aside, the Fed is also going to raise interest rates tomorrow, strengthening the dollar and making oil more expensive to emerging markets. WSJ just came out saying $80 a barrel could push Turkey into a recession, India cutting back purchases as well. So as I said earlier, if bulls want higher oil prices, it's going to be on their own dime because I'm sure as hell not buying until we see some pullback

Also, trump made it very clear that he was not going to slow down with China at all, demand will suffer as a result and once people start seeing the impacts of the trade war, Iranian sanctions won't hold as much weight

The way you explain it....yes....I can see bearish factors dominating the bullish one. 

Personally I believe that the issue of demand at a certain price will be the cause of stress for OPEC+.....and might trigger a reaction (force them to) come to the market's rescue.

Even at the Algiers meeting they hinted to brining the compliance level back to 100 percent...which also meant increasing production.

[Osama + 248]

Something that we have been discussing here on this forum:

https://www.theguardian.com/business/2018/sep/25/rising-oil-prices-fuel-fears-damage-global-economy

@Tom Kirkman, @Marina Schwarz, @ATK, @William Edwards, @Jan Erik, @Jan van Eck

[ceo_energemsier + 1,818]

Talk of a return to $100 oil has the central bank chief of western Europe's largest petroleum producer worried.

A recovery in the oil price to $80 a barrel has been a boon for the Norwegian economy, helping to narrow a widening budget gap and fueling activity. It even this month triggered the first rate increase in seven years. But the nation's central bank governor is now warning that too high an oil price could again release undue euphoria in the petroleum industry.

"There could be a danger that when the oil price gets too high we'll end up back in the situation where there's too little cost awareness in the industry," Governor Oystein Olsen said in an interview on Tuesday. "The Norwegian petroleum sector would benefit from less volatility over time."

Norway was hit hard by a crash in oil prices in 2014, which saw unemployment soar and slowed revenue to state coffers. A massive injection of fiscal and monetary stimulus saved the economy from an outright recession as the central bank cut interest rates to record lows and the government dipped into its $1 trillion sovereign wealth fund for the first time.

Now, with the oil price recovering, cash is again flowing back into the wealth fund, unemployment is back under 4 percent and inflation is once again close to target. The central bank has little interest in seeing a return to spiraling costs in the petroleum sector that would hamper the bank's strategy to hold the krone in check as it carries out its plan to tighten monetary policy.

But Olsen is encouraged by oil executives that seem intent on maintaining the lower costs that were needed to survive the downturn.

"It will take a long time before they rely on the oil price remaining at a much higher level than what we have now," he said. "Paradoxically, the reaction we had in the oil market at least had a positive effect on behavior in the petroleum industry in the short term."

The excess cash oil companies are amassing thanks to higher prices is providing more leeway and investment opportunities, said Kristin Faerovik, the head of Lundin Petroleum AB's Norwegian unit and chair of the powerful oil lobby in the Nordic country. But they're not about to lose control over costs, she said.

"The industry must maintain the structural changes we've managed to make, including new ways of collaborating with the supplier industry," she said in a phone interview on Tuesday. "Most of us are aware that we mustn't contribute to a cost spiral like the one we had in 2013-2014.

[Marina Schwarz + 1,576]

15 hours ago, ATK said:

Okay bulls, you want higher oil, have it, but I'm not buying anymore until we see some kind of pull pack.

Also EU, China, Russia, and Turkey talking about a barter system with Iran for Oil. US will push the world to the point that we completely isolate ourselves and everyone else will trade amongst themselves 

The idea is beginning to sound pretty attractive. Away with money, let's go back to basics!

[ceo_energemsier + 1,818]

Oil at $100? Not so fast, says Goldman Sachs.

The bank’s analysts said in a note Tuesday that “another supply catalyst beyond Iran would likely be needed for prices to meaningfully break to the upside.”

That threw a bit of cold water on bullish forecasts issued this week by trading giants Mercuria Energy Group Ltd and Trafigura Group, who said that supply losses could send oil back above $100 a barrel. Options traders jumped in to buy contracts that would profit from Brent rising above $100 or even $110, sending bullish options volume to a record.

Prices climbed this week after OPEC signaled that it wouldn’t rush to release more oil to the market, but would work to meet demand. The group is faced with a steep drop in Iran supply and Venezuela’s slumping output, while production growth from the U.S. is slowed by pipeline bottlenecks.

 

According to the Goldman analysts, led by Damien Courvalin and Jeffrey Currie, production from other OPEC producers and Russia will offset losses out of Iran. Also, any big jump in prices this fall ahead of U.S. elections would likely lead to President Donald Trump authorising a release from the country’s strategic reserves.

“As a result, we expect Brent prices to stabilise back in their $70-80/bbl range into year-end,” wrote the analysts.

[Tom Kirkman + 8,860]

13 hours ago, Osama said:

Something that we have been discussing here on this forum:

https://www.theguardian.com/business/2018/sep/25/rising-oil-prices-fuel-fears-damage-global-economy

@Tom Kirkman, @Marina Schwarz, @ATK, @William Edwards, @Jan Erik, @Jan van Eck

Yes, I've mentioned this before months ago.  Pretty sure nobody can say I'm not consistent in my views on where oil prices should be.

 

[Osama + 248]

20 minutes ago, Tom Kirkman said:

Yes, I've mentioned this before months ago.  Pretty sure nobody can say I'm not consistent in my views on where oil prices should be.

 

Indeed, Mr. Kirkman!! 

Thanks for links...I am going to read all 'ov them'.

[Osama + 248]

Ladies and Gents--- Trump gives you the SPR !! 

https://www.bloomberg.com/news/articles/2018-09-25/as-twitter-fails-trump-s-next-avenue-is-strategic-oil-reserve

"https://www.bloomberg.com/news/articles/2018-09-25/as-twitter-fails-trump-s-next-avenue-is-strategic-oil-reserve"

 

I have recently said in one of my articles that release of SPR if not for a longer term...but in the shorter term...certainly bring down the prices.

[Dan Warnick + 6,100]

On 9/24/2018 at 6:31 AM, Guillaume Albasini said:

Sanctions and geopolitical tensions are pushing the price up but trade wars are pushing the price down. And all that combined we have a kind of equilibrium between 70 and 80$.

My opinion is that the markets have probably overestimated the Iran sanctions impact and underestimated the trade wars impacts on world growth. So this could lead to a light downwards correction in the coming weeks. And this is the reason why the OPEC doesn't want to increase production and is rather insisting on targeting the 100% compliance.

Production will go up when there is a buyer for more oil.  You simply cannot fit 10 gallons of oil in a 5 gallon bucket!

[Dan Warnick + 6,100]

On 9/23/2018 at 7:09 PM, The Lancer said:

Ah i see.

But also “The biggest issue is not with the producing countries, it’s with the refiners, it’s with the demand. We in Saudi Arabia have not seen demand for any additional barrel that we did not produce.” 

I think them trying to get the 1 million is important but what really helps is that they capped oil. Check what UAE had to say. Apparently has plenty of spare capacity. and Spare inventory. Seems that no one in OPEC wants prices to stay above or to close to 80$ yet. Lots of confidence came out of the meeting I think. 

https://www.wsj.com/articles/oil-producers-signal-confidence-in-managing-supply-disruptions-1537698598

UAE has 3.5 million barrels of spare capacity but will not be increasing production, as it is not needed, says country’s oil minister Mazrouei #JMMC #OOTT #Opec

opec and non Opec will remain committed to supplying the market with its needs - saudi oil min #OOTT

Also China and USA is still having trouble... will see which the market this has more impact...

This is the most accurate comment here.  They, all suppliers combined, are filling orders, and will fill any additional orders as needed.  It simply does not get more simple than that.  Prices, I repeat, prices are being manipulated, and not by OPEC, Trump, Iran, or the U.S.  It's the big players/trading houses pumping fear and greed, nothing more, nothing less.  Where will the prices go?  Short term, I think no one can say with any accuracy unless you have the full picture of what the traders are doing.  Long term, they will go down when the facts can not be hidden in plain sight any longer.

[Tom Kirkman + 8,860]

37 minutes ago, Dan Warnick said:

This is the most accurate comment here.  They, all suppliers combined, are filling orders, and will fill any additional orders as needed.  It simply does not get more simple than that.  Prices, I repeat, prices are being manipulated, and not by OPEC, Trump, Iran, or the U.S.  It's the big players/trading houses pumping fear and greed, nothing more, nothing less.  Where will the prices go?  Short term, I think no one can say with any accuracy unless you have the full picture of what the traders are doing.  Long term, they will go down when the facts can not be hidden in plain sight any longer.

^ this.

 

My comment earlier today, title is self-explanatory: 

$80 oil is simply not sustainable long term. $100 oil will crash. Iran fears overblown. Traders greedy.

 

[jaycee + 348]

1 hour ago, Dan Warnick said:

This is the most accurate comment here.  They, all suppliers combined, are filling orders, and will fill any additional orders as needed.  It simply does not get more simple than that.  Prices, I repeat, prices are being manipulated, and not by OPEC, Trump, Iran, or the U.S.  It's the big players/trading houses pumping fear and greed, nothing more, nothing less.  Where will the prices go?  Short term, I think no one can say with any accuracy unless you have the full picture of what the traders are doing.  Long term, they will go down when the facts can not be hidden in plain sight any longer.

Its the futures market that is setting the price,as normal, the future is uncertain people are worrying rightly the impact of Iranian sanctions and Venezuelan cuts and are pushing up prices. To me that's rational not fear and greed. When the future was stable last year prices were low. If peace breaks out between the US and Iran then watch what happens to the oil price, its not speculators, though there is an element of that both when prices are rising and falling as they accelerate trends but simple forward supply and demand.

EG you own an airline and need fuel 365 days a year you are going to forward buy your fuel now to avoid possible supply problems in the future but it pushes up oil prices if all airlines do it at once which I presume they are.

[ATK + 355]

2 hours ago, Dan Warnick said:

Production will go up when there is a buyer for more oil.  You simply cannot fit 10 gallons of oil in a 5 gallon bucket!

That's the thing though, they are claiming that the market is well supplied yet prices are going up because of supply concerns? Either OPEC is lying about the market having enough oil or speculative traders have now taken the reins and are driving prices up themselves. I know many here believe it's entirely speculation that drives oil prices, but I disagree to an extent and think speculation comes and goes with oil. The commodities market has been doing the opposite of what crude has been doing, you look at copper and prices have dropped due to increasing trade tensions yet trade concerns are almost ignored with crude oil. So I think it goes back what we said where the market is too focused on Iranian sanctions and the supply side and not enough on tariffs/trade issues. 

Edited September 26, 2018 by ATK

[jaycee + 348]

16 minutes ago, ATK said:

So I think it goes back what we said where the market is too focused on Iranian sanctions and the supply side and not enough on tariffs/trade issues. 

The question you need to ask yourself is what will have the effect soonest. My money is on Iran til Xmas after world slowdown may start looking likely and prices may fall in antcipation.

[ATK + 355]

1 hour ago, jaycee said:

The question you need to ask yourself is what will have the effect soonest. My money is on Iran til Xmas after world slowdown may start looking likely and prices may fall in antcipation.

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

[Dan Warnick + 6,100]

1 hour ago, ATK said:

That's the thing though, they are claiming that the market is well supplied yet prices are going up because of supply concerns? Either OPEC is lying about the market having enough oil or speculative traders have now taken the reins and are driving prices up themselves. I know many here believe it's entirely speculation that drives oil prices, but I disagree to an extent and think speculation comes and goes with oil. The commodities market has been doing the opposite of what crude has been doing, you look at copper and prices have dropped due to increasing trade tensions yet trade concerns are almost ignored with crude oil. So I think it goes back what we said where the market is too focused on Iranian sanctions and the supply side and not enough on tariffs/trade issues. 

With respect, I think you might be too focused on Iranian sanctions because, although some ships full of Iranian oil are going to get through here and there, the suppliers have been ready to open the valves for a long long time, making up for any possible shortfall.  Oil is sold on future demand and, as such, if you are a country buying oil do you want to be caught out if the Iranian oil gets intercepted?  Do you want to risk a real shortage at home because you wanted to save a few bucks to deal with Iran?  I don't think so, not if you want to keep your cushy bureaucrat job.  And governments and corporations don't want shortages, no matter what, so you go with the legal oil and the legal ships with the legal insurance and the dependable supply chain.  Just my opinion, of course.

How difficult do people think it is for Saudi Arabia (or the U.S. or Russia) to increase the output of crude oil?  I always get a kick out of this question.  The Saudis may not know what the price of oil will be 6 months from now, but they sure as heck know that they want to be in a position to sell more oil if the opportunity to do so comes along, Iran and everybody else be damned.  Do you think they have not expanded that capability?  Do you think they reached maximum capacity and had a meeting and the bosses said "well, that's enough, we don't want to buy any more pipe."  What else do they do there?  Oil!  Pumping oil and filling ships full of the stuff.  Open the main valves up a quarter turn and fill up those ships over there, too.  

[Dan Warnick + 6,100]

39 minutes ago, J S said:

That said saying traders are greedy is like saying we need air to breath and frogs hop. 

Do you not realize that traders that know what they are doing make money whether oil crashes up or crashes down: Hedging the bet.

No shxx, er, no kidding Sherlock!  And the traders that know what they are doing are the ones taking advantage of everyone else's greed.  Just a point, but any trade requires someone on the other side of it.  If the big boys can make you bet wrong, that means you are on the opposite side of their successful trade.  And, just for the record, I don't like pantsuits, especially when they are worn by ole Hillary!  LOL!

[ceo_energemsier + 1,818]

4 hours ago, Dan Warnick said:

Production will go up when there is a buyer for more oil.  You simply cannot fit 10 gallons of oil in a 5 gallon bucket!

Oil blivet!!!

[ATK + 355]

1 hour ago, Dan Warnick said:

With respect, I think you might be too focused on Iranian Sanctions

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

[Dan Warnick + 6,100]

5 minutes 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!!"

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.  😎

[ceo_energemsier + 1,818]

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