Irrational Oil Market - WTI climbs after 8 million barrel build

[Greg Wild + 4]

It ping pongs between 65 and 75 pretty consistently. Looks like a bunch of guys buying in mid sixties and cashing in at 75. It may even be automated programs doing it. I'm no expert but maybe I should jump on the bandwagon, then I can be a rich trader instead of a dumb old loss control guy.

[TomTom + 183]

6 hours ago, Dan Warnick said:

Well folks, what the devil is happening to WTI today?  Up, down, all around town.  Volume shows a lot of red pushing the price down and then big green pushes it back up again.  I'm flummoxed.

Maybe Genscape knows something that we don't?

[Blackbag99 + 20]

On 10/3/2018 at 4:41 PM, ATK said:

Title says it all, want to know what your thoughts are about recent price movements after EIA reported an 8 million barrel crude build.

Yes bulls we know Iran Sanctions are right around the corner, but please explain why a massive crude build results in a price climb (even attempting a new ATH)

It surprised me. It fell on announcement at they fell on it like a pack of hyenas

Oil has been well anchored on the view that a recession is near. I don't believe that macro view. It could run another 4-7 years with ease.

23 days of commercial oil on current production inputs. Oil has traded much higher on with that little.

Its difficult to get to excited about planned shutdowns and lower crude oil exports.

[ATK + 355]

31 minutes ago, TomTom said:

Maybe Genscape knows something that we don't?

Lol Genscape said their would be a build at the cushing facility this week ahead of the EIA report.

And the market just had a delayed reaction to all the bearish news on Wednesday 

[TomTom + 183]

Just now, ATK said:

Lol Genscape said their would be a build at the cushing facility this week ahead of the EIA report.

 And the market just had a delayed reaction to all the bearish news on Wednesday 

I guess the algo's weren't checking Genscape data then 

[ATK + 355]

6 minutes ago, TomTom said:

I guess the algo's weren't checking Genscape data then 

Got to pay the big bucks to get data from the best of the best, they use satellites and thermal imagery to monitor oil hubs/ports, unlike most analyst who just do fuel survey's lol

[Cowpoke + 70]

20 hours ago, Marina Schwarz said:

I'm so very tempted to say that people expected this, what with refinery maintenance season starting

Yep.

[jonathan yoakum + 13]

Dont believe any pulpit nonsense about technicals, fundamentals, or politics. When the thrashing ensues Oil price is in the hands of mega or conglomerate bank algos, nothing more.

Just like crypto or any CFD server, Oil price action is behaving exactly the same so best to approach with extra care regarding order entry framing and account exposure. Otherwise dont bother trading it until they decide to adjust down the current tick ranges.

[Marina Schwarz + 1,576]

14 hours ago, Dan Warnick said:

Oil at 4-Year High as Iran Sanctions Offset Huge Stock Build

The headline that just won't die!  IRAN SANCTIONS!

Looming. Don't forget the looming. I can't wait for November 5 when the looming will be over. I also can't wait for December when US inventories will creep up above the seasonal average and satellite imaging will reveal Iran is shipping crude everywhere and OPEC will be pumping at max rates and Brent will crash and burn. What, can't an oil penguin dream?

[Marcus 0]

Yesterday 10/4 /2018 was a day like I have never seen . The fist few hours Oil and gas stocks didn't budge even though Oil was losing significantly . EQM was frozen in time and really didn't trade for 1 hour even tho it was open for trading . Other stocks like KMI actually rose . Traders were feeling like oil prices didn't matter .I have been sitting in cash and only bought a few thousand shares at the last hour of the day. Ive got a feeling this is not going to turn out well for anyone except the hedge funds . I am after dividends with good solid companies so I wont get burned too badly if at all . And No KMI is not one of them . RDS A and EQM are solid companies .

[ATK + 355]

6 hours ago, Marina Schwarz said:

Looming. Don't forget the looming. I can't wait for November 5 when the looming will be over. I also can't wait for December when US inventories will creep up above the seasonal average and satellite imaging will reveal Iran is shipping crude everywhere and OPEC will be pumping at max rates and Brent will crash and burn. What, can't an oil penguin dream?

https://www.google.com/amp/s/m.timesofindia.com/business/india-business/india-to-buy-9-million-barrels-of-iranian-oil-in-november-despite-us-sanctions/amp_articleshow/66086954.cms

India buying 9 million barrels of Iranian crude in November, it's either rack up huge amounts of debt in foreign banks to continue buying high priced oil or take their chances with the US and continue to buy Iranian oil at a dicount.

Pick your poison lol, I don't blame them for buying Iranian oil as opposed to ruining the Indian economy with massive debt due to a sliding rupee and high oil prices

Edited October 5, 2018 by ATK

[Marina Schwarz + 1,576]

A penguin does not laugh. But it can say "Cheers!" 

[OilPro_Rolando + 17]

I know I'm a couple of days late to this party, but if I may, I'd like to chime in anyway.  I don't think that the dismissiveness of the build was irrational at all.  We're in a  shoulder month when refiners retool for production of winter fuels.  So, it makes sense that they buy less crude while refineries are down.  It should be expected that we would see a build, perhaps not as big, but a build nonetheless for at least a couple of the reporting cycles.  So, if the build was to be expected then you'd have to assume something else, like impending reimposition of sanctions on Iran; lack of REAL OPEC excess supply; Russian insincerity in terms of cooperating with Saudi to keep prices down; and transportation constraints that keep Permian oil a bit bottled up would affect trader behavior.  On balance, you should expect prices to rise.  And, BTW, I wasn't surprised at all that they promptly pulled back.  It was all too predictable that traders would look to lock in profits once the suckers were in the pool. 

Going forward, we should see some unusually large draws as refineries come back online and ramp up production.  Shouldn't really cause much gyration in the price, but traders, analysts, and most importantly pundits have memories like dogs.  It's always a new day.  No perspective.  So look for prices to rise as these "surprising" draws are reported.  

Edited October 5, 2018 by OilPro_Rolando
Typos. Clarity

[ATK + 355]

3 minutes ago, OilPro_Rolando said:

I know I'm a couple of days late to this party, but if I may, I'd like to chime in anyway.  I don't think that the dismissiveness of the build was irrational at all.  We're in a  shoulder month when refiners retool for production of winter fuels.  So, it makes sense that they buy less crude whole refineries are down.  It should be expected that we would see a build, perhaps not as big, but a build nonetheless for at least a couple of the reporting cycles.  Going forward, we should see some unusually large draws as refineries come back online and ramp up production.  Shouldn't really cause much gyration in the price, but traders, analysts, and most importantly pundits have memories like dogs.  It's always a new day.  No perspective.  

But if you read the report, refinery utilization was already back up 80% (close to what it was two weeks ago when we were still reporting draws) the main reason for the crude build was due to decreasing exports. Not exactly what one would expect in such "tight" oil market 

[OilPro_Rolando + 17]

Well okay.  There is no shortage of factoids in the oil bidnez and everyone is welcome to latch on to those that they feel are most important.  You may be right.  But, I've seen this scenario play out a thousand times in my 20 years of following the price.  It doesn't mean that my factoids are better than yours or that I'm more right than you.  I'm not here to argue.  I truly appreciate a diverse point of view.  It helps me to test whether I'm being objective or not.  

I long ago let go of my obsessive focus on supply/demand fundamentals.  I try and look at the trend.  Is supply growing fast enough to keep up with demand?  Well, supplies are below the 5 year average.  Demand seems to be growing despite some news of a slow down in emerging markets.  So, this is the kind of environment that lends itself to speculation to the upside.  I don't think we're going to get to a $100.  I suspect prices will trade choppy but trend towards $80 and then pull back sans any news about disruptions or a collapse of the Chinese or Indian economies.  Traders will look to lock in profits, I think, at $78-80.  Just an opinion.        

[ATK + 355]

4 minutes ago, OilPro_Rolando said:

Well okay.  There is no shortage of factoids in the oil bidnez and everyone is welcome to latch on to those that they feel are most important.  You may be right.  But, I've seen this scenario play out a thousand times in my 20 years of following the price.  It doesn't mean that my factoids are better than yours or that I'm more right than you.  I'm not here to argue.  I truly appreciate a diverse point of view.  It helps me to test whether I'm being objective or not.  

I long ago let go of my obsessive focus on supply/demand fundamentals.  I try and look at the trend.  Is supply growing fast enough to keep up with demand?  Well, supplies are below the 5 year average.  Demand seems to be growing despite some news of a slow down in emerging markets.  So, this is the kind of environment that lends itself to speculation to the upside.  I don't think we're going to get to a $100.  I suspect prices will trade choppy but trend towards $80 and then pull back sans any news about disruptions or a collapse of the Chinese or Indian economies.  Traders will look to lock in profits, I think, at $78-80.  Just an opinion.        

Wasn't trying to come at you, I just read the EIA report and looked at the numbers as they are stated. I have a very analytic mindset so it's hard for me to get behind something that doesn't have the numbers to back it up. A lot of analyst claimed the build was due to seasonal maintainance, but the numbers don't lie and show that was not the case.

I'm just a numbers guy

[OilPro_Rolando + 17]

24 minutes ago, ATK said:

Wasn't trying to come at you, I just read the EIA report and looked at the numbers as they are stated. I have a very analytic mindset so it's hard for me to get behind something that doesn't have the numbers to back it up. A lot of analyst claimed the build was due to seasonal maintainance, but the numbers don't lie and show that was not the case.

I'm just a numbers guy

I didn't think you were coming at me at all.  I appreciate the back and forth.  It's just that these days people seem to look for an argument.  I was just trying to head it off. 

I also think the numbers are very, very important.  But, I also think that traders look for opportunities to create volatility.  They get paid on the trade whether up or down. Without clear direction from the numbers, they latch onto trends and crystal ball predictions. I think that's where are.  Traders want $100 oil.  They'll fight for it until the numbers CLEARLY tell them otherwise.  I'm not saying I think it's right, jut saying that's what I see.  

Peace!!

[Tapan 0]

I am new in this community

[James Regan + 1,776]

This topic and conversation has continued for years, whats the end game here, trying to make a profit from trading oil, no quick bucks to be made, no-one can predict how this market will act, one tweet and the market fluctuates. The market has no rhyme or reason. If plastic dog poop was a commodity it would be easier to trade. 

[MaxNix + 12]

You also have to consider options - whether people are selling options and buying crude or vice versa.

 

[Homesite Company 0]

The largest change in the price of oil has come from production in the Permian. In a few years this will stabilize and we'll be left with high prices from fear of low production.......maybe not. What happens when other countries (ie Poland) start using the production techniques in shale deposits ????? We may yet see lower prices...

[Jo Mack + 43]

I have never recalled when oil markets were rational.

[Billwhit11 0]

OK  guys lets remember the deal Rosevelt made during the big ww!!. We settled for constant supply and a cost derived from others sending us crude also.