Hmmm, sounds oddly familiar... "$70 Oil Could Be Right Around The Corner"

Heh heh, Happy New Year everyone.  Amusing to see my ad nauseum comments last year about $70 oil for 2019 are apparently suddenly matching media's views now.

$70 Oil Could Be Right Around The Corner

Oil markets have always been cyclical, and now even more so with advanced electronic trading, more speculation (which often results in wider oil price swings) and more producers, including the resurgence of U.S. oil production, now reaching over 11 million barrels per day. Added to the cocktail of uncertainty are also a myriad of geopolitical and economic factors, including ongoing U.S.-China trade tensions, angst of U.S. Federal Reserve policy, and wars in Syria, Yemen and elsewhere, which make it increasingly difficult to forecast the direction for future oil prices.

This dynamic has proven true over the past two-and-a-half months as market pundits have watched (often in amazement) how global oil prices reached multi-year highs in October, only to quickly plunge by 40 percent to date. Prices for global oil benchmark, London-traded Brent crude futures were trading in the mid-$80’s range in early October, while U.S. oil benchmark, NYMEX-traded West Texas Intermediate (WTI) crude futures were hovering in the mid $70’s-range, a comfortable price point for U.S. shale oil producers, and around $25per barrel above the average oil production break-even point for shale producers.

 

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Aaaaaand, just a reminder of some of my earlier ad nauseum comments ...

"... Meanwhile, I'll gently remind that I already warned repeatedly this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the harder the eventual crash would likely be.

And over to the news, would everyone kindly lay off guzzling the pots of coffee and stop artificially panicking.  Near as I can tell, $70 - ish oil for 2019 still seems about the right balance between the global economy and oil producers.  I hope the current over-reaction on the oil price See Saw will settle back to around $70 by end of this year or early next year.  Just my opinion; as always, you are free to disagree."

 

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4 minutes ago, Tom Kirkman said:

Heh heh, Happy New Year everyone.  Amusing to see my ad nauseum comments last year about $70 oil for 2019 are apparently suddenly matching media's views now.

$70 Oil Could Be Right Around The Corner

Oil markets have always been cyclical, and now even more so with advanced electronic trading, more speculation (which often results in wider oil price swings) and more producers, including the resurgence of U.S. oil production, now reaching over 11 million barrels per day. Added to the cocktail of uncertainty are also a myriad of geopolitical and economic factors, including ongoing U.S.-China trade tensions, angst of U.S. Federal Reserve policy, and wars in Syria, Yemen and elsewhere, which make it increasingly difficult to forecast the direction for future oil prices. 

This dynamic has proven true over the past two-and-a-half months as market pundits have watched (often in amazement) how global oil prices reached multi-year highs in October, only to quickly plunge by 40 percent to date. Prices for global oil benchmark, London-traded Brent crude futures were trading in the mid-$80’s range in early October, while U.S. oil benchmark, NYMEX-traded West Texas Intermediate (WTI) crude futures were hovering in the mid $70’s-range, a comfortable price point for U.S. shale oil producers, and around $25per barrel above the average oil production break-even point for shale producers.

 

==============================

Aaaaaand, just a reminder of some of my earlier ad nauseum comments ...

"... Meanwhile, I'll gently remind that I already warned repeatedly this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the harder the eventual crash would likely be.

And over to the news, would everyone kindly lay off guzzling the pots of coffee and stop artificially panicking.  Near as I can tell, $70 - ish oil for 2019 still seems about the right balance between the global economy and oil producers.  I hope the current over-reaction on the oil price See Saw will settle back to around $70 by end of this year or early next year.  Just my opinion; as always, you are free to disagree.

 

Maybe we should just start linking people to Adam Smith's "The Wealth of Nations" and let them work it out for themselves. 

Alternatively, if irrational fear & enthusiasm are so easy to spot, could one not earn a killing betting against them? 

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2 minutes ago, mthebold said:

Maybe we should just start linking people to Adam Smith's "The Wealth of Nations" and let them work it out for themselves. 

Alternatively, if irrational fear & enthusiasm are so easy to spot, could one not earn a killing betting against them? 

I've already humorously suggested that oil traders may want to consider doing the exact opposite of what Gartman says, as it might improve their odds.  This is the genius who said in 2016 that oil won't trade back above $44 in his lifetime.   Bwahahahahaha

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If it only costs $40 to pump a barrel of oil, any profit margin above 10% will trigger a stampede of investors into the market. Where else does anyone make 57% margins?

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