How High Can Oil Prices Rise? (Part 2 of my previous thread)

[Osama + 248]

22 minutes ago, Dan Warnick said:

Don't count your chickens just yet.  I read those articles to have exactly the opposite meaning as you guys are taking them.

Indeed Mr. Warnick. I am just trying to make myself a little happy hah!

 

I still fear that  the concerns IRANIAN SANCTIONS are far from abated...let alone gone!

[Dan Warnick + 6,100]

5 minutes ago, Osama said:

Indeed Mr. Warnick. I am just trying to make myself a little happy hah!

 

I still fear that  the concerns IRANIAN SANCTIONS are far from abated...let alone gone!

Fair enough, my friend.  The real news is that oil prices will drop by $20 on Monday and Tuesday before reversing back up to current levels and beyond.  Good for you?

[Osama + 248]

9 minutes ago, Dan Warnick said:

Fair enough, my friend.  The real news is that oil prices will drop by $20 on Monday and Tuesday before reversing back up to current levels and beyond.  Good for you?

$20? Well that will be incredible. Even if it hits $70....I can get out of my position.

[Dan Warnick + 6,100]

4 minutes ago, Osama said:

$20? Well that will be incredible. Even if it hits $70....I can get out of my position.

I wasn't sure where your position was, hence $20.  Okay, so it will be a spike down to $69.  Get out quickly!  It is entirely possible.

[Osama + 248]

Well can't wait.....to see that price!

 

 

[ceo_energemsier + 1,818]

8 hours ago, Osama said:

You just made my day! 

 

I suspect we will see a drop in prices just as you do.

The prices will come down but will be shortlived. There has to be "real meat & teeth" in an event, bit of news, real life event to cause prices to fall and stay @ that level. I dont see these bits of info to create a long lasting drop in prices.

As I said, we will have to wait and see how the US hands out these waivers, I do not think the US is going to give waivers to all the buyers of Iranian crude. They may offer some to India and China as a gesture of "diplomacy and good faith", then again it may be a token volume that will be included in the waiver

[ceo_energemsier + 1,818]

On 10/5/2018 at 11:22 PM, Tom Kirkman said:

I still hope oil prices will go down to around $70 by end of this year.  The "Iran Sanctions" threat is overblown out of proportion, in my opinion.

Back in the Spring of this year, I reiterated repeatedly on this forum that I was hoping for $65 oil average this year and $70 average next year.  But also reluctantly conceded a few months ago that oil prices would likely hit $80 by Autumn  (it has now)  and likely head toward $90  (temporarily)  before end of the year  (hasn't yet).  But also gave my opinion that oil prices would be whacked back down below $80 by Trump's Tweets, and that oil prices would likely be mostly bookended between $50 and$80 for the medium term.  You find my multitude of comments about all of this above by using the search function here; none of my opinions above are a secret - I've been very vocal about all of this.

Despite the media and trader hooplah and nailbiting, I'm still hoping for Brent to head back down to $70 by Dec 31st.  

After the Iran Oil Sanctions hype fizzles down a bit by December.

Just my opinion; as always, you are free to disagree.

The elephant in the room is the outcome of the Iran sanctions. As you say, when the smoke settles and the hype fizzles out about that factor in price of oil FEAR, FEAR , FEAR, the prices may come down to 70, I will go further and say that WTI may get down into the mid-upper 60s.

The industry fact is that Saudi and Russia can and will break out their  barrels to supply the thirsty refiners and consumers. I have mentioned this before in posts, that Saudi Arabia will be more than happy to replace Iranian barrels with their own and capture the market share as will Russia for as long as the sanctions last and are enforced.

Even if the US imposes and enforces strict Iranian sanctions, and does not give out any waivers except for token waivers, Saudi Arabia and Russia are able to stabilize the market and China and others will also buy WAF crude as has been shown recently with China buying over 1mil bpd of WAF crude. The US will be fine as well with no real price shock  thanks to the shale boom.

[ceo_energemsier + 1,818]

6 hours ago, Dan Warnick said:

This is the Trump administration showing public evidence of "fighting those damn Arabs" for the American people, AND, it benefits all of their Republican friends (and their donors) in the oil producing States and the voters within those states, and the oil industry (profits) wherever it may be located.  Not that hard to figure out, really.

I do not believe that Mr. Goldwyn's statement is true about the Prez's criticism of OPEC is unprecedented... former Prez's have called upon OPEC and criticized them for price manipulation and to open the spigots as have Democratic lawmakers have and going as far as trying to pass NOPEC.

[Top Oil Trader + 469]

Indeed Tom it is blown out of proportion.

[Top Oil Trader + 469]

Basically is it over for oil.?

Indeed, the price will drop to 60s level, maybe high 60s. It looks like from there it should break 80s. And during the Iran Embargo, I expect the news of fear, to cause the masses to bring it up to around $100

 

Edited October 7, 2018 by Top Oil Trader

[Osama + 248]

11 minutes ago, Top Oil Trader said:

Basically is it over for oil.?

Indeed, the price will drop to 60s level, maybe high 60s. It looks like from there it should break 80s. And during the Iran Embargo, I expect the news of fear, to cause the masses to bring it up to around $100

 

Do you think taking a short position tomorrow can help recover some loss? 

[Osama + 248]

@Top Oil Trader WTI is at $74 right now. Do you see a dip, even a slight one, in the price tomorrow? Or it might climb due to no ruddy reason once again to $76-77?

[Top Oil Trader + 469]

Osama, others. The reality is far from the perception. Lets look at dot com where amazon hit 460 then dropped to 5. Look at the tulip craze in holland. Look at oil when it hit high 100s and then down to 26. It usually takes investors a couple of month to see reality. Why? According to most this world is an illusion, (remember the matrix), hollywood does their research, same with star wars, these moves are based on something. So yes reality will be the Sanctions wont matter, but investors wont care and will bring the prices up, due to following misleading perceptions.

[Osama + 248]

1 minute ago, Top Oil Trader said:

Osama, others. The reality is far from the perception. Lets look at dot com where amazon hit 460 then dropped to 5. Look at the tulip craze in holland. Look at oil when it hit high 100s and then down to 26. It usually takes investors a couple of month to see reality. Why? According to most this world is an illusion, (remember the matrix), hollywood does their research, same with star wars, these moves are based on something. So yes reality will be the Sanctions wont matter, but investors wont care and will bring the prices up, due to following misleading perceptions.

I am of the same view as yours. That in the longer run....there is no substantial reason for oil to continue climning up. In the shorter term it might. However, as I noted in my latest article as well, the prices do not reflect the fundamentals.

[Top Oil Trader + 469]

So from the chart like i said it looks like first high 60s will be hit. Since most Crude daytraders are happy if they can catch a 25 cent move, this move will be better than most will ever catch in heir lifetime. 

[ceo_energemsier + 1,818]

S&P Global Platts Factbox: One-Month Countdown to US Sanctions on Iran's Oil Buyers

Washington DC — Iran's oil buyers have a month to halt their trades or risk getting banned from the US financial system for violating secondary sanctions that return November 5.

Oil prices continue to be supported by the deadline and the hard-line enforcement expected by the administration of President Donald Trump. Front-month ICE Brent futures settled above $86/b Wednesday, the highest in four years, before dropping back below $85/b Thursday.

"Iranian export losses have already accelerated faster than we expected," said Paul Sheldon, S&P Global Platts Analytics' chief geopolitical adviser.

More factors to watch as the deadline nears:

TRADE FLOWS

• 1.7 million b/d of Iranian crude and condensate exports will likely leave the market by November, compared with April levels, according to S&P Global Platts Analytics.
• Iran's exports will fall to 1.1 million b/d in October, Platts Analytics projects. "The rate of reduction will slow thereafter, as sanctions-averse buyers will be out of the market by November 5," Sheldon said. Exports will fall to 800,000 b/d by the fourth quarter of 2019.
• Estimates of the sanctions impact have increased sharply since May, when many analysts still expected the US to grant widespread waivers to countries that make significant cuts, as the administration of Barack Obama did in 2012-15.
• Iranian crude oil and condensate exports slumped to just under 1.7 million b/d in September, a fall of almost 700,000 b/d from May, according to Platts estimates.
• China and India are expected to continue to import some Iranian oil after November, while South Korea and Japan will likely halt purchases.
• As Iran's key oil customers look for alternative supplies, they are opting for more medium sour crudes from Saudi Arabia, Iraq, Russia and UAE.
• Top buyer China continues to buy a significant share of Iranian crude, with flows averaging 660,000 b/d in January-September, up from 602,000 b/d last year.
• Exports to India have averaged around 400,000 b/d in August and September, compared with 650,000 b/d in April-June.
• More European buyers are starting to cut their Iranian imports, with flows slumping to around 400,000 b/d in September, from 600,000-700,000 b/d in May or about one-third of Iran's exports.

US crude exports cannot increase rapidly enough to replace Iranian barrels, until the Permian pipeline bottleneck eases in mid-2019.

PRICES

• Tight global oil supply in the fourth quarter as a result of Iran's rapidly falling exports and Venezuela's economic collapse have led some analysts to predict Brent futures will surge to $100/b.
• Rising US gasoline prices ahead of midterm elections have caused President Donald Trump to ratchet up pressure on Saudi Arabia to increase production. US retail gasoline prices topped $3/gal in 13 states as of Friday, with the national average of $2.91/gal sitting just below the peak summer price in May.
• Iran's key oil customers are opting for more medium sour crudes from Saudi Arabia, Iraq, Russia and UAE, which is causing prices of these grades to soar and putting pressure on global refinery margins.
• Prices of alternative Middle Eastern sour crudes surged to four-year highs, with the Platts December Dubai crude benchmark rising to $82.95/b earlier this week.
• In mid-September, Russia's Urals was trading around multi-year highs relative to Dated Brent in both Northwest Europe and the Mediterranean.

Prices for Iranian crude, however, have not risen as sharply, as Tehran is luring less-risk-averse buyers with discounts. This is why Iranian grades are also showing their continued competitiveness in China, a market that could prove more resistant to sanctions pressure.

INFRASTRUCTURE

• Iran has started concealing the movement of its oil tankers by turning off and on transponders in a bid to furtively sell its crude, a practice expected to increase once the sanctions kick in. Five VLCCs have disappeared from global satellite tracking systems since late August, while six recently reappeared after previously vanishing.
• Other Iranian tankers laden with crude have stayed put offshore, likely being used as floating storage. Iran had around 8 million-10 million barrels of crude and condensate on floating storage as of October 3, mostly off its main crude oil terminals. This compares with 15 million-17 million barrels about three weeks ago before some takers turned off their transponders.
• Iran held some 50 million barrels of its crude and condensate in tankers when US and EU sanctions were in effect in 2012-15.

As exports have fallen, domestic refinery runs have increased sharply. A third-phase expansion at the Persian Gulf Star plant is expected to start up this month, as Iran hopes to be self-sufficient in gasoline by early 2019.

[ceo_energemsier + 1,818]

3 minutes ago, ceo_energemsier said:

S&P Global Platts Factbox: One-Month Countdown to US Sanctions on Iran's Oil Buyers

Washington DC — Iran's oil buyers have a month to halt their trades or risk getting banned from the US financial system for violating secondary sanctions that return November 5.

Oil prices continue to be supported by the deadline and the hard-line enforcement expected by the administration of President Donald Trump. Front-month ICE Brent futures settled above $86/b Wednesday, the highest in four years, before dropping back below $85/b Thursday.

"Iranian export losses have already accelerated faster than we expected," said Paul Sheldon, S&P Global Platts Analytics' chief geopolitical adviser.

More factors to watch as the deadline nears:

TRADE FLOWS

• 1.7 million b/d of Iranian crude and condensate exports will likely leave the market by November, compared with April levels, according to S&P Global Platts Analytics.
• Iran's exports will fall to 1.1 million b/d in October, Platts Analytics projects. "The rate of reduction will slow thereafter, as sanctions-averse buyers will be out of the market by November 5," Sheldon said. Exports will fall to 800,000 b/d by the fourth quarter of 2019.
• Estimates of the sanctions impact have increased sharply since May, when many analysts still expected the US to grant widespread waivers to countries that make significant cuts, as the administration of Barack Obama did in 2012-15.
• Iranian crude oil and condensate exports slumped to just under 1.7 million b/d in September, a fall of almost 700,000 b/d from May, according to Platts estimates.
• China and India are expected to continue to import some Iranian oil after November, while South Korea and Japan will likely halt purchases.
• As Iran's key oil customers look for alternative supplies, they are opting for more medium sour crudes from Saudi Arabia, Iraq, Russia and UAE.
• Top buyer China continues to buy a significant share of Iranian crude, with flows averaging 660,000 b/d in January-September, up from 602,000 b/d last year.
• Exports to India have averaged around 400,000 b/d in August and September, compared with 650,000 b/d in April-June.
• More European buyers are starting to cut their Iranian imports, with flows slumping to around 400,000 b/d in September, from 600,000-700,000 b/d in May or about one-third of Iran's exports.

US crude exports cannot increase rapidly enough to replace Iranian barrels, until the Permian pipeline bottleneck eases in mid-2019.

PRICES

• Tight global oil supply in the fourth quarter as a result of Iran's rapidly falling exports and Venezuela's economic collapse have led some analysts to predict Brent futures will surge to $100/b.
• Rising US gasoline prices ahead of midterm elections have caused President Donald Trump to ratchet up pressure on Saudi Arabia to increase production. US retail gasoline prices topped $3/gal in 13 states as of Friday, with the national average of $2.91/gal sitting just below the peak summer price in May.
• Iran's key oil customers are opting for more medium sour crudes from Saudi Arabia, Iraq, Russia and UAE, which is causing prices of these grades to soar and putting pressure on global refinery margins.
• Prices of alternative Middle Eastern sour crudes surged to four-year highs, with the Platts December Dubai crude benchmark rising to $82.95/b earlier this week.
• In mid-September, Russia's Urals was trading around multi-year highs relative to Dated Brent in both Northwest Europe and the Mediterranean.

Prices for Iranian crude, however, have not risen as sharply, as Tehran is luring less-risk-averse buyers with discounts. This is why Iranian grades are also showing their continued competitiveness in China, a market that could prove more resistant to sanctions pressure.

INFRASTRUCTURE

• Iran has started concealing the movement of its oil tankers by turning off and on transponders in a bid to furtively sell its crude, a practice expected to increase once the sanctions kick in. Five VLCCs have disappeared from global satellite tracking systems since late August, while six recently reappeared after previously vanishing.
• Other Iranian tankers laden with crude have stayed put offshore, likely being used as floating storage. Iran had around 8 million-10 million barrels of crude and condensate on floating storage as of October 3, mostly off its main crude oil terminals. This compares with 15 million-17 million barrels about three weeks ago before some takers turned off their transponders.
• Iran held some 50 million barrels of its crude and condensate in tankers when US and EU sanctions were in effect in 2012-15.

As exports have fallen, domestic refinery runs have increased sharply. A third-phase expansion at the Persian Gulf Star plant is expected to start up this month, as Iran hopes to be self-sufficient in gasoline by early 2019.

[ceo_energemsier + 1,818]

Just now, ceo_energemsier said:

From my perespective,

It all depends on

1) When the sanctions will be enforced and if the importers of Iranian crude & condensate will be given any additional time to "wrap up" loose ends with their Iranian cargoes

2) If the US will provide waivers to certain countries and for how much volume , will it be just a token? and for how long?

3) It is a fact that buyers of Iranian oil & condensate can successfully lift oil cargoes from South America, West Africa , Russia and Mid East (Q8, KSA, UAE, Oman) and North Sea as well as US crude that can make it down to the USGC for exports.

4) The Panama Canal can facilitate more US barrels moving across the Pacific to FEA & PACRIM (S. Korea, Japan etc minus China due to Tariff issues , however no tariffs on US crude yet). China suppliers may also be able to circumvent the tariff and political hot potato of buying US crude via blending of US crude with crude oils from other countries by carrying out lightering and ship to ship transfers and this has been done and is being done. This process is also fairly normal practice in physical crude trade.

5) The desire and courage? of countries to defy US sanctions. Risk VS reward for India, China, EU  states and other countries to keep buying a large volume of Iranian oil

6) The willingness and resolve of the US to enforce the sanctions and go after violators

7) US willingness to use the stick and carrot on the enforcement of sanctions

8.)  We have historical evidence of the capabilities of the US to enforce navy blockades and enforcement of embargoes in the Arabian Gulf, Hormuz Straits and the Red Sea and the Suez Canal. The bottlenecks work in favor of the naval enforcement of sea trade outflow within that region

9) The US's ability to impose financial blockade

10) We have to wait and see Saudi Arabia's response to the supply issue, however, I strongly believe they will work in their best interests to capture as much market share as possible for however the length of the sanctions , not to forget Russia wanting to do the same. These two will be the "key suppliers" to China and India in the event of a truly enforced sanction and blockade of Iranian barrels as their crude oil grades and condensates fall in line with the requirements of the major Chinese and Indian refiners and their refineries product slates.

11) Iran may barter with Russia for crude swap to other commodities.

[Top Oil Trader + 469]

ceo this indeed is some serious news for making a case for oil to go to 100. However, my view is fundamentally we have a glut, that needs to be absorbed, how? Decreasing prices to meet demand. So at about $68 is where the demand will meet the supply, and then from there, well see how the iran scare tactics, will bring up mass hysteria, and bring up the crude oil prices. If traders dont fall for it, and they wake up and smell the coffee, or if for a change the traders act rationally, (wont happen),  then oil could hit even below 50. What traders dont realize is there always will be oil from somewhere, The artic alone which has yet to be pumped has more than 30 Trill barrels alone.

Edited October 7, 2018 by Top Oil Trader

[Tom Kirkman + 8,860]

@ceo_energemsier just a note.  It is generally considered not a good thing to quote (copy & paste) entire articles onto forums.

It should usually be sufficient to copy & paste just a paragraph or two - or even a few if necessary (Fair Usage) along with a link to the article.  But not the entire article.

That way, readers can click on the source article for further information, and not deprive the source link of reader traffic.

[ceo_energemsier + 1,818]

1 hour ago, Tom Kirkman said:

@ceo_energemsier just a note.  It is generally considered not a good thing to quote (copy & paste) entire articles onto forums.

It should usually be sufficient to copy & paste just a paragraph or two - or even a few if necessary (Fair Usage) along with a link to the article.  But not the entire article.

That way, readers can click on the source article for further information, and not deprive the source link of reader traffic.

Thanks for keeping me informed on the etiquette

In this particular case, I included the entire article with the graphics and added my perspectives about the info in the article so that everything is right there to compare.

Duly noted for future quotes.

[Tom Kirkman + 8,860]

16 minutes ago, ceo_energemsier said:

Thanks for keeping me informed on the etiquette

In this particular case, I included the entire article with the graphics and added my perspectives about the info in the article so that everything is right there to compare.

Duly noted for future quotes.

No worries.  

What I tend to do is quote a paragraph or 2, post the link to the article, and then add my own comments / opinions about it.  That "Fair Use" method seems to be pretty acceptable for posting on social media and forums.

Copying & pasting entire articles is generally a bad idea, legally:

Using Copyrighted Content on a Website – Including News Articles and Videos

[Dan Warnick + 6,100]

8 hours ago, Osama said:

@Top Oil Trader WTI is at $74 right now. Do you see a dip, even a slight one, in the price tomorrow? Or it might climb due to no ruddy reason once again to $76-77?

There is a big reason for it to climb: Uncertainty

[Dan Warnick + 6,100]

7 hours ago, ceo_energemsier said:

Estimates of the sanctions impact have increased sharply since May, when many analysts still expected the US to grant widespread waivers to countries that make significant cuts, as the administration of Barack Obama did in 2012-15.

Then I would posit that far too many people are NOT getting Trump's message.  The quote above takes their interests into account; Trump is not concerned with their interests nearly as much as he is concerned with his, which at least in his mind seems to be what he thinks is in the interest of the U.S. and its people.

Another reason that I do not believe this statement holds water: If Trump is aware (and why wouldn't he be?) that Obama did things that way, he will make sure he does not.  Especially after the ugliness that was just on public display in Washington about his Supreme Court Judge appointee, who is now seated for life.

[Dan Warnick + 6,100]

3 hours ago, Tom Kirkman said:

@ceo_energemsier just a note.  It is generally considered not a good thing to quote (copy & paste) entire articles onto forums.

It should usually be sufficient to copy & paste just a paragraph or two - or even a few if necessary (Fair Usage) along with a link to the article.  But not the entire article.

That way, readers can click on the source article for further information, and not deprive the source link of reader traffic.

Hi Tom.  To also highlight your point "It should usually be sufficient to copy & paste just a paragraph or two - or even a few if necessary (Fair Usage) along with a link to the article.".  I find it to be very interesting to have a taster, if you will, of a paragraph or two/three that gives me some idea if I want to pursue a further read.  And to the opposite end of the spectrum, if a paste job results in a TLDR (too long, didn't read), what's the point.  And, lastly, if an entire long article is pasted, it makes it more difficult to respond to.  Thanks for bringing it up and addressing it.