Oil prices forecast

[William Edwards + 708]

On 1/17/2019 at 12:32 AM, Ashok Coomar said:

Oil prices are likely to be in the range of $40-50 or even lower. All indications are bearish. Impact will be felt only when IMO2020 kicks in. No impact of Brexit. 

Your brief comments are interesting. Can you amplify your thinking?

[Delton Witte + 12]

On 1/17/2019 at 12:32 AM, Ashok Coomar said:

Oil prices are likely to be in the range of $40-50 or even lower. All indications are bearish. Impact will be felt only when IMO2020 kicks in. No impact of Brexit. 

I don't know what will happen, but having watched various stocks and oil over the past 6 months I have an idea. It seems to me that investors, or in a lot of cases algorithms, are driving the market. If you watch stocks like Netflix or Tesla it appears that they don't always react appropriately to the market. Large selloffs after earnings beat expectations and other odd reactions. I think oil has become somewhat the same way. The rise this past fall was QUICK and defied fundamentals. The fall was just as quick if not quicker. I am not going to bet how high it will go or for how long it will stay up, but I'm expecting WTI to reach at least $60. After which point I won't have any financial interest in oil.  

[Tom Kirkman + 8,860]

9 hours ago, TomTom said:

$65 (as you mentioned various times last year) seems to be the sweet spot for Brent. 

Sub-$50 WTI and $70 Brent may be more suitable for 2019  This surprises me somewhat - do you think the spread between WTI and Brent can grow as big as $20+ ?

Yes.  If you read my explanation later in that thread,  WTI keeps shooting itself in the foot by overproducing, while OPEC scales back production. 

$20+ spread between WTI and Brent is very much possible.  Ask Canada about oil price spreads...  WTI is willfully driving down its own price, by overproducing.

[JR EWING + 123]

On ‎1‎/‎17‎/‎2019 at 1:54 AM, Lorenzo said:

OIL Reserves in Saudi Arabia alone, as of January 2007, Saudi Aramco's proven reserves were estimated at 259.9 billion barrels (41.32×10⁹ m³), comprising about 24% of the world total. They would last for 90 years at the current rate of production. 85% of Saudi oil fields found have not produced oil yet.

With demand slowing due to recessionary pressures....and supply being plentiful....it is hard to see crude price increasing other than OPEC manipulation to increase revenues.

you don't get an A for math Lorenzo. I reckon that the Saudis have enough for 2600 days at 100mbod. Closer to but less than 10 years. I reckon the reserves available as we are today are 41 years with no increase in production. Is not that the energy revolution needs to happen, it has to happen. We don't find oil like we did before even with the new technology. In next 20 years we will learn to recover more, but what %. 10 or 20%. energy revolution is ongoing

[William Edwards + 708]

16 hours ago, JR EWING said:

you don't get an A for math Lorenzo. I reckon that the Saudis have enough for 2600 days at 100mbod. Closer to but less than 10 years. I reckon the reserves available as we are today are 41 years with no increase in production. Is not that the energy revolution needs to happen, it has to happen. We don't find oil like we did before even with the new technology. In next 20 years we will learn to recover more, but what %. 10 or 20%. energy revolution is ongoing

Try re-doing your own arithmetic with a more reasonable production rate of 10 mbod instead of 100 mbod. The new, more reasonable, arithmetic will agree with Lorenzo. I cannot comprehend a case where Saudi production supplies the entire world demand of 100 mood.

Please restore Lorenzo's A.

[JoMack + 549]

On 1/18/2019 at 10:18 AM, TomTom said:

Thanks for the observations here @Old-Ruffneck always good to see some on-the-ground factchecking!

How do you see the water supply/disposal situation in these areas? Is everything still normal, or do you expect this to be a disrupting/ cost lifting factor within the next 12 months?

Disposal is a big problem in the Permian Basin since the Delaware and Bone Spring formations produce a very large amount of water.  If an Operator doesn't have a disposal well close to his wells, he'll transport and pay another operator to inject its water.  It does add quite a bit of cost to the well(s) it produces in these formations.

[Top Oil Trader + 469]

Guys listen. You are all basing your views on what happened in 2018. It no longer the same game, there is so much oil being pumped now in us, and will get a lot bigger month by month. Oil being discovered all over, Venezuela, Libya may get back on. OPEC i wish them best of luck. Many surprises that none of you expected, will hit in 2019. Right now oil is going up based on news, not facts. Once the facts trickle in, and people wake up, brace yourselves. People usually wake up 2 months after the fact. Look at last year when prices hit 76. Wasnt until November, that traders and analysts smelled trouble, and then said oh 60 is the bottom, and then it still went down almost another 20 bucks.

Lots of new factors which didn't factor in last year will need to be factored in this year, but by most experts, gurus, it won't be factored in, until its too late.

[Delton Witte + 12]

7 minutes ago, Top Oil Trader said:

most experts, gurus, it won't be factored in, until its too late.

That's why we are so lucky to have you!

[JR EWING + 123]

12 hours ago, William Edwards said:

Try re-doing your own arithmetic with a more reasonable production rate of 10 mbod instead of 100 mbod. The new, more reasonable, arithmetic will agree with Lorenzo. I cannot comprehend a case where Saudi production supplies the entire world demand of 100 mood.

Please restore Lorenzo's A.

I'm tempted to stick with my statement but on reading again its seems clear that Lorenzo is saying that Saudi oil production alone will last 90 years. Not my original interpretation that Saudi could supply world oil demand for 90 years. Sorry Lorenzo.

Saudis don't have 24% of recoverable oil. Its more like 15%. Recoverable oil in reserves in all known reservoirs world wide is enough for 40 odd years at 100mbod consumption, with that consumption rate rising every day since the 70's and apparently likely to peak at between 120 and 140 mbod in 2040 that figure of 40 reduces significantly. To think that we are not in a global energy crisis with the likes of trump talking the price down which is increasing the demand and in long term reducing the availability is a real worry. The US is giving its last remaining oil reserves away at a pittance when its clear that it would be a great back stop in the even of war or other catastrophe. That's capitalism for you.

 

[Top Oil Trader + 469]

 

Doesn't matter how much the Saudis have, the US will soon have a lot more than the Saudis. Saudi Arabia has 258 Billion barrels, of oil reserves and produces about 10 mbpd but can produce about 12 mbpd. In the US current oil reserves are 36 Billions of barrels but with about 200 Billion barrels undiscovered, and by 2020 some estimates are the US will produce 14 mbpd, far exceeding even the Saudi's capacity.

With the millions of EV vehicles soon to be produced by VW, Mercedes, BMW, Chevrolet and some by Tesla, demand will plummet, why 51% of oil consumption is for gasoline, since Tesla will soon produce a car with a 600 mile range, and others will follow, way past most gasoline engines ranges, by that time, there won't be any reason to buy a gasoline powered engine.

Indeed the Saudi 's have no advantage in lowering production since the  US is not part of OPEC and never will be, so they will always be able to make up the slack for the Saudis. Besides demand will eventually plummet anyways. LIke i said whatever you knew last year, has no relevance to the future prices of oil, new factors will come into play, that will throw most so-called analysts and traders off the beaten track.

In trading it is the same, whatever simple little chart or charts people use today for trading, is now so obsolete, no matter what combination they look at, pattern, indicator, price setup, its over, prices moves are so advanced today compared to say the 1900, or the 90s, or 2010, there is no chartist today, that even comes remotely close to having a chance to predict future price movements, unless...(I will leave that open). Any chartists or guru out there, who wants your money to teach you their system,  and who claims different, I invite you to look at their track record, their track record is but a mirage. They will claim the futures commission won't allow them to publish their track record, which of course is completely false. So when people here claim technical analysis is smoke and mirrors they are 100% right, The question they need to ask is this, well then who does make the money in crude, and what do they use? For a  fact, 99% of small traders on average don't make money in crude, although they will get lucky once in a while, (so in that sense you could say they do make money),  and all you will hear about for the next 6 months is that one trade. You can't blame the traders for losing, it's not that they have low IQs, but that crude has so many fake moves before a breakout or breakdown happens, that most traders are wiped out for the day, before a move starts. Even the hedge funds who don't daytrade, and have a serious advantage over day traders, will many times have to close their accounts due to 100s of millions in losses. 

[Auson + 123]

31 minutes ago, Top Oil Trader said:

 

Doesn't matter how much the Saudis have, the US will soon have a lot more than the Saudis. Saudi Arabia has 258 Billion barrels, of oil reserves and produces about 10 mbpd but can produce about 12 mbpd. In the US current oil reserves are 36 Billions of barrels but with about 200 Billion barrels undiscovered, and by 2020 some estimates are the US will produce 14 mbpd, far exceeding even the Saudi's capacity.

With the millions of EV vehicles soon to be produced by VW, Mercedes, BMW, Chevrolet and some by Tesla, demand will plummet, why 51% of oil consumption is for gasoline, since Tesla will soon produce a car with a 600 mile range, and others will follow, way past most gasoline engines ranges, by that time, there won't be any reason to buy a gasoline powered engine.

Indeed the Saudi 's have no advantage in lowering production since the  US is not part of OPEC and never will be, so they will always be able to make up the slack for the Saudis. Besides demand will eventually plummet anyways. LIke i said whatever you knew last year, has no relevance to the future prices of oil, new factors will come into play, that will throw most so-called analysts and traders off the beaten track.

In trading it is the same, whatever simple little chart or charts people use today for trading, is now so obsolete, no matter what combination they look at, pattern, indicator, price setup, its over, prices moves are so advanced today compared to say the 1900, or the 90s, or 2010, there is no chartist today, that even comes remotely close to having a chance to predict future price movements, unless...(I will leave that open). Any chartists or guru out there, who wants your money to teach you their system,  and who claims different, I invite you to look at their track record, their track record is but a mirage. They will claim the futures commission won't allow them to publish their track record, which of course is completely false. So when people here claim technical analysis is smoke and mirrors they are 100% right, The question they need to ask is this, well then who does make the money in crude, and what do they use? For a  fact, 99% of small traders on average don't make money in crude, although they will get lucky once in a while, (so in that sense you could say they do make money),  and all you will hear about for the next 6 months is that one trade. You can't blame the traders for losing, it's not that they have low IQs, but that crude has so many fake moves before a breakout or breakdown happens, that most traders are wiped out for the day, before a move starts. Even the hedge funds who don't daytrade, and have a serious advantage over day traders, will many times have to close their accounts due to 100s of millions in losses. 

Top (ahem) Oil Trader,

I think what you are missing in your analysis is a clear and complete understanding of the fundamentals which interlink with your charting based guesses. As we are plucking statistics out of the air I would say in my experience more than 1% of retail traders make money probably closer to 8%. Even with spread betting and CFDs the failure rate is much lower than 1 in 100. These numbers can be confirmed by analysis of any of the large spread betting Brokers and their customers performance ( or lack of.)   

You also conflate the physical Oil market ( tangible deliverable barrels ) with speculation and made up derivatives which can become worthless in the blink of an eye just as they were created from thin air in about the same time

[Outlaw Jackie + 78]

Well, this is usually a good place to start..

https://www.reuters.com/article/us-mexico-oil-hedge/mexico-hedges-2019-oil-at-55-per-barrel-spends-12-billion-on-options-idUSKCN1P42N5

[Top Oil Trader + 469]

Actually, as I explained to many here when I said that at 76 on October we would crash or drop hard. Noone saw the fundamentals then, it was only after it dropped to 60, and 50 that the news and analysts slowly came up with the news for the drop. Was there any news when prices hit 42 and I one day hit 46, what news caused that spike, only in January do we find out that OPEC had been cutting production more than they said they would. However, what I'm saying is even the fundamentals you are told, is always way after the fundamental has caused a big move in the price. So you have to be a couple of steps ahead of the news, to know how prices fundamentally will move, and in what direction. For now, yes trend seems to be up at least until 55, 55 on wti will cause some pullback in prices. But once we see supply increase dramatically above supply, of course, that won't become evident right away but will take months to sink in, by then prices will have dropped again. A while ago we had a discussion if charts were random, or had a trend, indeed they do trend but for most its random. Same with the news, though the news is concrete when it comes out, by the time the news hits the masses, crude has already made its move. And the news is then used as an afterthought to explain the change in trend. Therefore both fundamentals and charting is indeed a random walk for the masses.

[Top Oil Trader + 469]

Asshok, thats a good guess 40-50. right now prices are almost @ 54. and they are going to at least 55. So far your 50 range is like way off.

[Top Oil Trader + 469]

so we didnt hit 55 today, but today we almost hit it . so maybe today a new high was set, and was as far as crude will go before it takes a break. For tomorrow looking for a nice short. Crude for now has hit a brick wall. Would need to eventually hit the low 50s, or maybe worse,  Only god knows where it will go.

[William Edwards + 708]

23 hours ago, Top Oil Trader said:

A while ago we had a discussion if charts were random, or had a trend, indeed they do trend but for most its random.

I completely agree with your assessment that price movements are random, although guided by trends dictated by fundamental factors. Accordingly I am impressed with your  hardened steel nerve in going us numbers. Keep up the good work!!

[Top Oil Trader + 469]

So as i  mentioned yesterday, the 54.5 - 55 would be a top for now, and that today would head for the low 50s, right now prices are at 53.6 and indeed are headed for 51.6. What can I say, by now oil runs in my veins. And yes charts the way the world, analysts, and traders look at it, is indeed completely random.

Edited January 22, 2019 by Top Oil Trader

[Top Oil Trader + 469]

For example here are some current views of where crude is going since it hit 54.

 

https://www.investing.com/analysis/wti-crude-daily-forecast--22-january-2019-200377803

https://www.investing.com/analysis/oil-longerterm-prospects-look-bullish-200377720

[Top Oil Trader + 469]

Although wti is now down $1.4 from yesterdays highs. It hasn't even begun to go down.

[Top Oil Trader + 469]

so now back to 53 again. but will head back down.

[Top Oil Trader + 469]

Let make the target nice and simple for today, dont want to be precise to the penny. But 52 is the sweet spot.

[A/Plague + 50]

On 1/22/2019 at 6:40 PM, Top Oil Trader said:

Let make the target nice and simple for today, dont want to be precise to the penny. But 52 is the sweet spot. 

 

Edited February 9, 2019 by A/Plague

[Top Oil Trader + 469]

indeed very good. it will go below 52. 

[Top Oil Trader + 469]

well it looks like for today the low will be 52.02, and indeed they may not be able to break it any further. But they should break 52 if not later then tomorrow. Most likely target 51.7 or lower. So good luck, if you know ahead of time, trading is easy.

[JoMack + 549]

If prices continue to stay in the $50 range, vendors will start to drop prices and companies will take advantage of it.  I see more drilling in the Permian at lower prices if vendors start to get with the program, which they usually always did in the past.