Trump vs. MbS

HELLO ALL!!

 

So with the recent spay between US and KSA....many observers have started to talk about, once again, a three digit oil if US sanctions KSA and the latter retaliates as speculated. 

Following is my latest take on this very topic. As always looking forward for a healthy discussion:

https://seekingalpha.com/article/4212042-oil-prices-trump-mbs-face

@Tom Kirkman, @William Edwards, @Jan van der Meer, @Jan van Eck, @ATK, @ceo_energemsier, @Marina Schwarz, @Top Oil Trader, @Keven Tan.

 

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We'll see how this escalates. A lot of tension right now. SA already mentioned they would retaliate against US sanctions. Who spoke to early Trump or MSB? 

Triple digit Oil here we go! 

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(edited)

4 hours ago, Osama said:

HELLO ALL!!

 

So with the recent spay between US and KSA....many observers have started to talk about, once again, a three digit oil if US sanctions KSA and the latter retaliates as speculated. 

Following is my latest take on this very topic. As always looking forward for a healthy discussion:

https://seekingalpha.com/article/4212042-oil-prices-trump-mbs-face

@Tom Kirkman, @William Edwards, @Jan van der Meer, @Jan van Eck, @ATK, @ceo_energemsier, @Marina Schwarz, @Top Oil Trader, @Keven Tan.

 

Your reasoning is sound, Osama. But I might remind you that reason is usually not the guiding principle, either in government officials or oil traders. Therefore the real answer is "Anything can happen". You are absolutely correct, however, that if senseless government or trading activity creates a price spike, the world economy will suffer as a result. On a fundamental basis the price of oil is currently $20 too high to be sustained. If you hit demand with a price spike, followed by the disappointment of the industry who took unwise actions during the spike, disaster is sure to be the result.

Edited by William Edwards
typo
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Good to hear from you Bill; the $20 you assess will make the difference for offshore/deep water operations. Best to be conservative...

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There are too many unusual circumstances behind this event for it to make any sense based upon the news articles released.  For instance, Khashoggi lived in the USA.  Why did he not go to the consulate in America to pick up his papers?  He had five to choose from in America.  Why go to Turkey instead?  Last time I checked, Turkey was a bad actor who allies itself with Iran.  And last time I checked, Iran and MbS do not get along.  Also, last time I checked, MbS put a bunch of his fellow princes behind bars.  I have a feeling that those princes wouldn't mind a little revenge for that one.  Moreover, why does Turkey luckily have the recording to prove it all, and why were they holding out on the recording until the last minute?  Complicit, maybe?  To me, this looks more like MbS being framed by his enemies than MbS acting like a dictator who silences journalists.  Also, why Khashoggi?  Does this really have to do with this articles on Saudi Arabia, or does it have to do with his contacts who had connections with 9/11?  If I had to guess, I'd say the Saudi team of assassins that were sent to eliminate Khashoggi were not sent by MbS, but rather, they were sent by his many enemies to frame MbS while also conveniently silencing Khashoggi.  After all, who had more motive to kill him?  MbS or the 9/11 participants who would like to get their country back from MbS?  I'd say the latter...by a lot.  And if that is the case, then this whole thing will blow over without having any long term effect on oil prices.  The lira might fall, however, when the retaliatory sanctions hit, and a few princely heads may roll when MbS uncovers their plot.  

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12 hours ago, CMOP said:

We'll see how this escalates. A lot of tension right now. SA already mentioned they would retaliate against US sanctions. Who spoke to early Trump or MSB? 

Triple digit Oil here we go! 

We might see a short lived rally..but three digits? Well...we have to wait for it.

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Hi Osama

I have been silence for the past couple weeks. Do you know why? because no matter what factors and news are keep poping out, it’s no longer matter anymore at this moment.

People are crazy about triple digits of the upcoming oil trend. I believe because they are bidding on a big steak toward expection of winning. I also notice more than 75% people are bullish without taking rational concern on investing.com forum (https://m.investing.com/commodities/crude-oil)

There is always a saying in market, “buy what it is popular rather than real performance.” When there are enough people having faith in something, the thing will be eventually turning in real! BUT won’t last long! 

How many people still remember the “Tulip Mania”, “South Sea Bubble”, 1929, 1997, 2002 and 2008 etccc.. and yes, the next one is coming very soon, once oil hit $100. The Emerging Markets are suffering in such a big economic crises now, and with a $100 oil, they are pretty much done. How about U.S.? Yes, much better than the Emerging Markets because it is called USA. However, we are currently paying $4+ in oil, and how much will it be if oil rises to $100 and even higher like $200? What about the overall world economic? 

My overall conclusions;

1. Iran sanction will be executed, it will and has already caused a higher and higher oil price. Reality: the global oil inventory was not affected since there are blackmarkets.

2. People said triple digits oil unless Saudi gets sanctioned by U.S. which I don’t believe It is going to happen. 

3. Trump has raised his voice in a such highest volume in trade war with China, because he just wants to get more benefits from previous deals. He knows that it would be a double lose to both parties (China lose more for sure), so there is a high possibility to see a come back at G20.  

4. Not only we know a triple digits oil does not make sense, all the major heads know that as well. It is just simple not sustainable and feasible, period. When this turns out a big global economic crises, price of oil just becomes a number. 

5. Recently, WTI has dropped under $70, which I am actually surprise. Why does it not turn to $80 because of Saudi? Is that a signal of the market is actually swing back to more fear-ish and more rational? I don’t know. 

Once again, I am still a bear in oil market at this price range. I hope oil will drop to $65-$60 which is ideal to both buyer and seller. 

Don’t take too serious of my words, personal opinions. 

 

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13 hours ago, William Edwards said:

Your reasoning is sound, Osama. But I might remind you that reason is usually not the guiding principle, either in government officials or oil traders. Therefore the real answer is "Anything can happen". You are absolutely correct, however, that if senseless government or trading activity creates a price spike, the world economy will suffer as a result. On a fundamental basis the price of oil is currently $20 too high to be sustained. If you hit demand with a price spike, followed by the disappointment of the industry who took unwise actions during the spike, disaster is sure to be the result.

Glad to hear back from you Mr. Edwards! Hope you have been doing great.

Yes....I have now experienced what you, and others, have been saying, this market doesn't works on logic, reasoning.

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5 hours ago, Epic said:

There are too many unusual circumstances behind this event for it to make any sense based upon the news articles released.  For instance, Khashoggi lived in the USA.  Why did he not go to the consulate in America to pick up his papers?  He had five to choose from in America.  Why go to Turkey instead?  Last time I checked, Turkey was a bad actor who allies itself with Iran.  And last time I checked, Iran and MbS do not get along.  Also, last time I checked, MbS put a bunch of his fellow princes behind bars.  I have a feeling that those princes wouldn't mind a little revenge for that one.  Moreover, why does Turkey luckily have the recording to prove it all, and why were they holding out on the recording until the last minute?  Complicit, maybe?  To me, this looks more like MbS being framed by his enemies than MbS acting like a dictator who silences journalists.  Also, why Khashoggi?  Does this really have to do with this articles on Saudi Arabia, or does it have to do with his contacts who had connections with 9/11?  If I had to guess, I'd say the Saudi team of assassins that were sent to eliminate Khashoggi were not sent by MbS, but rather, they were sent by his many enemies to frame MbS while also conveniently silencing Khashoggi.  After all, who had more motive to kill him?  MbS or the 9/11 participants who would like to get their country back from MbS?  I'd say the latter...by a lot.  And if that is the case, then this whole thing will blow over without having any long term effect on oil prices.  The lira might fall, however, when the retaliatory sanctions hit, and a few princely heads may roll when MbS uncovers their plot.  

Hmm...interesting perspective, I must say.

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@Dan Warnick----where have you been?

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2 hours ago, Keven Tan said:

Hi Osama

I have been silence for the past couple weeks. Do you know why? because no matter what factors and news are keep poping out, it’s no longer matter anymore at this moment.

People are crazy about triple digits of the upcoming oil trend. I believe because they are bidding on a big steak toward expection of winning. I also notice more than 75% people are bullish without taking rational concern on investing.com forum (https://m.investing.com/commodities/crude-oil)

There is always a saying in market, “buy what it is popular rather than real performance.” When there are enough people having faith in something, the thing will be eventually turning in real! BUT won’t last long! 

How many people still remember the “Tulip Mania”, “South Sea Bubble”, 1929, 1997, 2002 and 2008 etccc.. and yes, the next one is coming very soon, once oil hit $100. The Emerging Markets are suffering in such a big economic crises now, and with a $100 oil, they are pretty much done. How about U.S.? Yes, much better than the Emerging Markets because it is called USA. However, we are currently paying $4+ in oil, and how much will it be if oil rises to $100 and even higher like $200? What about the overall world economic? 

My overall conclusions;

1. Iran sanction will be executed, it will and has already caused a higher and higher oil price. Reality: the global oil inventory was not affected since there are blackmarkets.

2. People said triple digits oil unless Saudi gets sanctioned by U.S. which I don’t believe It is going to happen. 

3. Trump has raised his voice in a such highest volume in trade war with China, because he just wants to get more benefits from previous deals. He knows that it would be a double lose to both parties (China lose more for sure), so there is a high possibility to see a come back at G20.  

4. Not only we know a triple digits oil does not make sense, all the major heads know that as well. It is just simple not sustainable and feasible, period. When this turns out a big global economic crises, price of oil just becomes a number. 

5. Recently, WTI has dropped under $70, which I am actually surprise. Why does it not turn to $80 because of Saudi? Is that a signal of the market is actually swing back to more fear-ish and more rational? I don’t know. 

Once again, I am still a bear in oil market at this price range. I hope oil will drop to $65-$60 which is ideal to both buyer and seller. 

Don’t take too serious of my words, personal opinions. 

 

@Keven Tan---I remain a bear as well. Why? Because one can see.

Remember when oil was rallying up above $76 --I wrote that it won't go higher.

I agree with your conclusions on the whole.

 

However, I still think that the recent and sudden bearishness is only because of the inventory build-ups.and that market still isn't operating rationally---it never will----November 4th is nigh....we will see what happens.

@ATK what are your thoughts?

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15 minutes ago, Osama said:

@Dan Warnick----where have you been?

I'm here, buddy.  I watch the boards every day but my money is tied up in an index trade, so I am following that even more closely.  I wish I had cash available right now, because I would short the WTI, as I see all indicators taking oil down to the $65 range, like JJ also says the charts are telling him.  I don't go by charts, but it is good to know those guys' perspective in every case.  It sure helps if you are straddling the fence, as the saying goes, and would like some other reassuring feelings or to know they are against you, so you can at least choose to wait a while longer.

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2 hours ago, Osama said:

@Keven Tan---I remain a bear as well. Why? Because one can see.

Remember when oil was rallying up above $76 --I wrote that it won't go higher.

I agree with your conclusions on the whole.

 

However, I still think that the recent and sudden bearishness is only because of the inventory build-ups.and that market still isn't operating rationally---it never will----November 4th is nigh....we will see what happens.

@ATK what are your thoughts?

Lol it had to happen eventually! I'm sooooo happy the market is coming to its senses and not overblowing Iranian Sanctions! It was literally 100% hedge fund hype.

I got a ship tracking service to add to my trades and it turns out Iran has just been shutting off their AIS system for a lot of their tankers (aka ghost ships) and still making shipments. The media has 100% been going off of AIS data which is why they are grously miscalculating Iran exports, 1.33 mbd is what they want the media to see due to them benifiting from the higher cost of oil.

I'm stil laughing at all this hedge funds that went long above 73 lol

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6 hours ago, Dan Warnick said:

I'm here, buddy.  I watch the boards every day but my money is tied up in an index trade, so I am following that even more closely.  I wish I had cash available right now, because I would short the WTI, as I see all indicators taking oil down to the $65 range, like JJ also says the charts are telling him.  I don't go by charts, but it is good to know those guys' perspective in every case.  It sure helps if you are straddling the fence, as the saying goes, and would like some other reassuring feelings or to know they are against you, so you can at least choose to wait a while longer.

I am sitting on the fence (bench) these days.....market is too confused. 

However, Another buildup and we are off to the lower 60s.

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CNN---Ah! @Tom Kirkman

"Washington (CNN) - Secretary of State Mike Pompeo's smiling photo op with Saudi Arabia's crown prince disguised the reality of a blunt, tough meeting in which the top US diplomat told the royal his future as king depends on his handling of Jamal Khashoggi's suspected murder."

 

Link: https://cnn.it/2CP8cip

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Great, WTI is falling under $69 now. We shall see a $65ish at the end of this month if no more shits would happen. 

1D7BBFE9-BA29-445D-A971-B7556D72B7B1.jpeg

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I think that WTI will test support near 67, and depending on the outcomes of global situations and inventories, oscillate laterally or gradually upward into the next year. Too many factors are clouding predictions, but with the crazy year we have had, it has maintained a relatively tidy ascending channel.

Elections can also be tamping prices down and we may see a bounce from the bottom of the channel after Nov 6.

I'm predicting a calm up and down wave through 2019 between 67-85 throughout the year. Nothing wild or triple digit if global supply isn't shocked by a major producer, and with China's economy/demand for oil slowing down, 100+ oil seems less likely without supply manipulation by Saudis or other bad players.

Screen Shot 10-18-18 at 06.18 PM.PNG

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(edited)

18 hours ago, NatGasDude said:

I think that WTI will test support near 67, and depending on the outcomes of global situations and inventories, oscillate laterally or gradually upward into the next year. Too many factors are clouding predictions, but with the crazy year we have had, it has maintained a relatively tidy ascending channel.

Elections can also be tamping prices down and we may see a bounce from the bottom of the channel after Nov 6.

I'm predicting a calm up and down wave through 2019 between 67-85 throughout the year. Nothing wild or triple digit if global supply isn't shocked by a major producer, and with China's economy/demand for oil slowing down, 100+ oil seems less likely without supply manipulation by Saudis or other bad players.

Screen Shot 10-18-18 at 06.18 PM.PNG

$100 will only be likely in case of drastic scenario..e.g. Iran restarting its nuclear program etc. But I don't think Iran is foolish enough to do that.

Edited by Osama
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I don't either party wants an uphea

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My personal take on this issue is that neither party wants to cause additional upheaval in the ME, although Mr Trump may regret getting too cosy with MBS, under the auspices of Mr. Kushner... 

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I've said it before and I'll say it again: Crude oil at these prices is ridiculously low! The problem is that the world has gotten hooked on cheap prices. The Saudis are lazy and haven't had to do much of anything to sell their oil. And then, like a monster truck, here came shale oil. When you look at the toll effected upon the planet in order to get oil out of the ground, not to mention refining it and using it, we are at unbelievably low prices. At the risk of being redundant, the proper amount of pressure and heat has to be exerted against organic material for over a million years to make a mere cup of oil. At 47 gallons a crude oil barrel, and 12 cups a gallon, if one were to compare Starbucks coffee to oil, a barrel of Starbucks would run you about $3800. Coffee beans, last I checked, are easy to grow annually and any fool can roast them and grind them. 

Every president has toadied up to the Saudis: the Bushes were the worst; Prince Bandar was almost a member of their family. They made scads of money from the Saudis, as did their pals. I can't prove it but I rather suspect the same is happening now. 

While it may seem that everybody in the oil business is getting rich these days, only about one in ten companies operating in shale oil are actually making a profit. I don't want to insult anyone, but if you haven't seen what is involved from start to finish in getting a shale oil well on line, go to the Permian, or the Bakken, or the D-J Basin, or SCOOP-STACK, or the Eagle Ford. You can watch land being scraped for the pad, the drilling rig brought in, the GPS direction of the lateral, then the fracking. By God, the fracking! 

In doing all this, we're taking billions of gallons of water from the life cycle and sequestering it away in non-recycle disposal wells. There are going to be hundreds of thousands of wells that soon have to be plugged, to the tune of $30,000 each. These things are parabolic. But wait, the Saudis don't have a free ride any longer either, for they're now having to pump billions of gallons of seawater into their wells--waterflooding if you will--in order to make them chug along at their advanced rate . . . these are for the most part old wells in decline. 

When you consider global warming, accentuated no doubt by the greenhouse emissions, the unknown of removing a huge amount of water from the life cycle, the NOX, etc., my gosh it gives me a pain in my behind when I hear about how we must keep the price of oil low. In full disclosure, I have lived all my life off the proceeds of oil and gas, and still do at the ripe old age of 74, so I have a vested interest in a higher price, but I have seen prices ratchet up, then plunge, up and down, and we--America!--still don't have an energy policy. In spite of having a guy in as Secretary of Energy from an oil-producing state--even though the department was one that he planned on eliminating when he became president, or so he said during the campaign--we still don't have an energy policy. For example, every refinery could be made to handle light sweet shale oil, and we could produce it. But it would take about a billion a refinery to get there. Why haven't we converted one at a time. A billion is peanuts in this kind of world. 

Anyway, I apologize, but this saved me a psychiatrist's fee. The price of oil is VERY LOW! Let the free market decide it, but for God's sake, I haven't heard anyone complaining about spending $300/month on Starbucks. 

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Good points Gerry. I do think that we are getting closer to what the 'fair price' for oil should be, considering the cost of extraction and environmental toll. Break even WTI prices per Boe is around 28-40; fluctuating depending upon whether E&P's are ramping up drilling/new operations or employing austerity measures to cut costs and selling what they've got in their existing wells.

We should look to do away with the notion that super cheap crude is economic stimulus because a huge segment of our economy now matches or surpasses the top 3 producers on the planet. I'm baffled when simpletons toss around the old cliche that 'cheap oil is better for everyone, bc cheap gas', when they have not paid enough attention to the fact that American companies are producing it in record numbers on American soil, and paying salaries and taxes. I could care less if gas is a bit more expensive if it means that we have a thriving American energy industry prior to the transition to renewable sources, which I DON'T see taking over 50% of the grid before 2060 despite all the hype. Solar/wind will certainly contribute more and more to the electricity production pie chart, but will not render fossil fuels obsolete overnight like many hippie folk may believe.

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I suspect that we need at least $75-$80 oil consistently to encourage oil companies to find and develop new reserves. We know that at $40 all new projects stopped immediately. We have not yet paid the price for that. In the U.K we are paying £1.45p per litre or £6.90 ish per gallon at the pump,around $9 per gallon. If I was in the U.S paying around $2.50 per gallon or $0.40 cents per litre I think I would keep qiuet.

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On 10/18/2018 at 4:48 AM, Osama said:

Hmm...interesting perspective, I must say.

^Here is a pretty clear explanation.  I'm not saying his explanation is true, but it does make a lot of sense considering all of the strange things that happened: https://www.youtube.com/watch?v=j7GL7Sa0jSI

I'm sure someone around here has seen pictures of Jamal holding his RGP back when he fought for the mujahideen. 

...the one thing that never seemed to make sense to me was how Turkey has audio recordings of something that happened to a Saudi by other Saudis while inside a Saudi consulate.  Turkey can't even get a police investigator in there to search for signs of a murder, but they somehow managed to a microphone recording 24/7 in the secret room in the far back...

  ...hmmm...

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