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

[Osama + 248]

5 hours ago, Keven Tan said:

Hi Osama 

new to this forum and I care about oil price as every driver and consumer does hahah, actually I need a way lower WTI price so I can get out my oil bearing ETF. Anyway, it’s great that you started this conversation and I respected all of your valuable thoughts, indeed.

lets see what is going to happen next few conning weeks. 

As the “greatest king of Trump” said: 

Cheers! 

Hello and welcome! 

Yes..interesting times....let's wait and see.

[Osama + 248]

1 hour ago, The Lancer said:

hey ppls,

Seems that the meeting was more reassuring that I expected.

https://twitter.com/Amena__Bakr 

https://twitter.com/javierblas

What do you guys think? The interesting parts is 1mbpd is still the aim and will be possible soon. + another 500 early next year mabye. Then UAE and Saudi have spare capacity of almost 5mbpd or something. And UAE reports inventories up by 7m.

Also the mention of demand destruction being brought up at just 80$ is amazing news. This is the focus of price to demand. Assuming if prices go up to fast and stay high to long people will opt for more efficient stuff to lower demand permanently.

 

This article here gives an opposite view...seems like we are going to see another rally om Monday:

https://www.reuters.com/article/us-oil-opec/opec-russia-rebuff-trumps-call-for-immediate-boost-to-oil-output-idUSKCN1M30DK

 

"In August, OPEC and its allies cut production by 600,000 bpd more than their pact required, mainly as a result of falling output in Iran as customers in Europe and Asia reduced purchases ahead of the U.S. sanctions deadline."

[The Lancer + 6]

1 minute ago, Osama said:

This article here gives an opposite view...seems like we are going to see another rally om Monday:

https://www.reuters.com/article/us-oil-opec/opec-russia-rebuff-trumps-call-for-immediate-boost-to-oil-output-idUSKCN1M30DK

 

"In August, OPEC and its allies cut production by 600,000 bpd more than their pact required, mainly as a result of falling output in Iran as customers in Europe and Asia reduced purchases ahead of the U.S. sanctions deadline."

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...

[ATK + 355]

12 hours ago, 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...

The articles that are coming out are somewhat confusing with how they are worded, it makes it sound like they are not going to increase production, but then it goes on to say that countries have been overcomplying with supply cuts by 600,000 barrels a day and that they will work to increase output to meet 100% compliance (aka increase production to offset the 600,000 barrels a day)

The whole supply and demand equation is f*cked: even though nobody is buying additional oil (refineries) prices will continue to go up regardless just because of supply concerns? Why would supply be a concern if nobody is buying then? The whole thing is really confusing honestly.

[Osama + 248]

4 hours ago, 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...

I completely agree with your analysis! 

 

I believe that we will see a downward trend in prices...when the traders will realize what we have been discussing here. 

[ATK + 355]

I'll be honest I'm pretty sure OPEC is lying about demand, pretty sure they're just up to their old games again.

[Guillaume Albasini + 851]

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.

[AMR + 6]

Saudi’s want to keep Iran and Trump happy, instead said focusing on reaching 100 percent compliance with production cuts agreed in June the effectively means compensating for falling Iranian production. Saudi’s know how to create speculate oil prices.

[Osama + 248]

3 hours ago, 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.

I personally thought that once Trump administration will implement $200 bn of tariffs...oil prices will take a dive (the reason I wrote a "A Bearish September for Oil" and took a short position as well) however, traders are so obsessed with Iranian sanctions that the markets just yawned and continued with their upward streak.

 

I think sooner or later, as you have rightly pointed, attention is going to turn towards the trade war (more dangerous now as China has cancelled trade talks as well) and their will be a correction. When? That we cannot tell.

[Osama + 248]

2 hours ago, 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!

I'd agree with your point on perception. We will see for how long the market 'perceives' the condition as bullish.

[Aziz Ahmad Siddiqui + 2]

Oil will hit 100 dollars by December and by May/ June 2019, 125 dollars. On the pretext of  Sanctions against Iran. All are making good money!!!

[Steve Hewgill + 1]

If this carries on I could afford half a lambo shocked it hit 8070 today happy days

[Osama + 248]

57 minutes ago, Aziz Ahmad Siddiqui said:

Oil will hit 100 dollars by December and by May/ June 2019, 125 dollars. On the pretext of  Sanctions against Iran. All are making good money!!!

Depends...who you ask. Bulls or Bears.

[ATK + 355]

Keep in mind everyone, it's going to be a volatile week, Trump is expected to talk about Iran at the UN followed by a potential rate hike by the Fed come Wednesday. Emerging markets have already lost a lot of value to the dollar and with oil prices where they are at, could potentially kill demand. India is already cutting back crude purchases as a result. I expect at least some kind of pullback in order to allow more buyers to come in and push this higher (currently touching the top of an upward channel).

Edit: oh I also think it's funny that OPECs comments caused a spike in price that they were trying to "avoid". I don't they are going to do anything if this keeps going up

Edited September 24, 2018 by ATK

[Osama + 248]

16 minutes ago, ATK said:

Keep in mind everyone, it's going to be a volatile week, Trump is expected to talk about Iran at the UN followed by a potential rate hike by the Fed come Wednesday. Emerging markets have already lost a lot of value to the dollar and with oil prices where they are at, could potentially kill demand. India is already cutting back crude purchases as a result. I expect at least some kind of pullback in order to allow more buyers to come in and push this higher (currently touching the top of an upward channel).

Edit: oh I also think it's funny that OPECs comments caused a spike in price that they were trying to "avoid". I don't they are going to do anything if this keeps going up

I am looking for a way out from this (sell and don't take a position).. what can be termed as a hyped up mess. Trade war with billion of sanctions is being ignored....which is potentially extremely dangerous. 

 

I hope oil takes a dip....and there are reasons to believe, as you mentioned, but then do the traders follow reason? 

 

---somebody speak's sotto voce:

PSST: NO!

[ATK + 355]

13 minutes ago, Osama said:

I am looking for a way out from this (sell and don't take a position).. what can be termed as a hyped up mess. Trade war with billion of sanctions is being ignored....which is potentially extremely dangerous. 

 

I hope oil takes a dip....and there are reasons to believe, as you mentioned, but then do the traders follow reason? 

 

---somebody speak's sotto voce:

PSST: NO!

Read an article somewhere that basically the same thing happened in 2007, OPEC claimed demand wasn't changing, yet oil prices kept climbing due too speculation. It wasn't until part way into 2008 that the economic cracks in the global economy started rearing it's head and prices tanked. OPEC largely did the exact same thing aka "we don't see a need to increase production at this time."

I don't expect the market to fully react until we start seeing tariffs eat into earnings of companies. 

[Keven Tan + 85]

1 hour ago, Aziz Ahmad Siddiqui said:

Oil will hit 100 dollars by December and by May/ June 2019, 125 dollars. On the pretext of  Sanctions against Iran. All are making good money!!!

I am wondering how much we have to pay for gasoline if WTI hits $125 as you are projecting in 2019. I am in CA, and I already saw a $4+ at some regions, I am not sure a higher gasoline price will motivate and does anything good to the local or national economy especially we all know we are engaging with too many uncertainties since Trump has been elected.

regardless how the “Strong U.S. economy” and how low the unemployment rates are, the fact the majorities are not intending spending more, or likely they could afford to spend more. With that said, the oil price could rocket as higher as “they” expect, but seriously, is that sustainable? Not saying in a long term but in next couple years. 

 

 

[Keven Tan + 85]

7 minutes ago, ATK said:

Read an article somewhere that basically the same thing happened in 2007, OPEC claimed demand wasn't changing, yet oil prices kept climbing due too speculation. It wasn't until part way into 2008 that the economic cracks in the global economy started rearing it's head and prices tanked. OPEC largely did the exact same thing aka "we don't see a need to increase production at this time."

I don't expect the market to fully react until we start seeing tariffs eat into earnings of companies. 

No wonder elders always say history is always repeating itself over and over. 

By your discover of how OPEC acted back to 2017, isn’t that a very similar situation we arw going to engage?  Once Trump is off the stage in 2020, stock market will likely crashes, then another financial crisis again. If that will happen, real estate crashes next. 

Regaless how the realities are, thinking of what Street and Monopolies are thinking is the point; “ while Trump is here with a strong economy, let’s grab as much as we can then leave all these fools in the dark.” Isn’t that always the case through the entire history book, and no matter its eastern or western, it’s all the same pattern. 

 

[Robert Ziegler + 121]

10 minutes ago, Keven Tan said:

I am wondering how much we have to pay for gasoline if WTI hits $125 as you are projecting in 2019. I am in CA, and I already saw a $4+ at some regions, I am not sure a higher gasoline price will motivate and does anything good to the local or national economy especially we all know we are engaging with too many uncertainties since Trump has been elected.

regardless how the “Strong U.S. economy” and how low the unemployment rates are, the fact the majorities are not intending spending more, or likely they could afford to spend more. With that said, the oil price could rocket as higher as “they” expect, but seriously, is that sustainable? Not saying in a long term but in next couple years. 

 

 

So you better move to Texas, I am still filling up for 2.28/gal Regular by shopping around.

[Osama + 248]

53 minutes ago, ATK said:

Read an article somewhere that basically the same thing happened in 2007, OPEC claimed demand wasn't changing, yet oil prices kept climbing due too speculation. It wasn't until part way into 2008 that the economic cracks in the global economy started rearing it's head and prices tanked. OPEC largely did the exact same thing aka "we don't see a need to increase production at this time."

I don't expect the market to fully react until we start seeing tariffs eat into earnings of companies. 

Patience...then...is the key---I fancy! 

 

I would be grateful if you can mention a link to any of the article regarding the event you mentioned above...would love to read---will also try to look for some myself.

[Osama + 248]

38 minutes ago, Keven Tan said:

No wonder elders always say history is always repeating itself over and over. 

By your discover of how OPEC acted back to 2017, isn’t that a very similar situation we arw going to engage?  Once Trump is off the stage in 2020, stock market will likely crashes, then another financial crisis again. If that will happen, real estate crashes next. 

Regaless how the realities are, thinking of what Street and Monopolies are thinking is the point; “ while Trump is here with a strong economy, let’s grab as much as we can then leave all these fools in the dark.” Isn’t that always the case through the entire history book, and no matter its eastern or western, it’s all the same pattern. 

 

This repetition of history reminda me of Stoic philosphy and Marcus' Meditations. Any way---not to digress....I agree with ATK rhat we might have to wait till the effects of the recent trade ear might began to surface.

[ceo_energemsier + 1,818]

I expect Brent to be $88-94/bbl towards the end of the year and WTI $75-80$/bbl towards the end of the year

[PeterfromCalgary + 60]

When politicians and diplomats communicate displeasure with Saudi Arabia using twitter is a very bad idea!  

Chrystia Freeland Canada's foreign minster found this out the hard way after tweeting about her concerns about a Saudi prisoner.  https://www.thestar.com/news/canada/2018/08/10/ottawa-was-surprised-by-saudi-arabias-angry-reaction-to-its-human-rights-concerns.html

Saudi didn't react well to Trump recent tweets about oil prices either.  https://www.haaretz.com/us-news/saudi-energy-minister-rips-trump-tweet-i-do-not-influence-oil-prices-1.6494121

When communicating with Saudi Arabia private correspondence will lead to better results than public statements on twitter.

Edited September 24, 2018 by PeterfromCalgary

[ATK + 355]

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 

[ATK + 355]

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