Oil Slips Further From 2019 Highs On Trade Worries

Oil fell further from 2019 highs on Friday as focus shifted to a lack of progress in U.S.-China trade talks, but prices found support from supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela.“Oil prices have come under pressure in today’s trading session because of profit-taking and uncertainty surrounding the U.S.-China trade talks,” said Abhishek Kumar, head of analytics at Interfax Energy in London. Nevertheless, bullish sentiment is set to prevail in the near term, helped by output cuts by OPEC and its allies and sharply falling production from Venezuela and Iran, Kumar said.

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Same reason, higher price...vicious cicle

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Oil prices skyrocketing 30% YTD...

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Trade war has already hurt the oil industry. As a consumer I expect even HIGHER price of oil .... Only the sky is the limit.

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Why has my gas price gone up .25 a gallon over the last week and a half? All the oil is pooled together and traded on the global market.  Interests and money are eternal....

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What about a Mantra of "drill baby drill"... 😀

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Meanwhile, Bayern chief Hoeness ludicrously claims Sheikh Mansour ‘raises oil price’ to fund Guardiola’s Man City transfer.... Soccer, oil, OPEC....😂

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1 minute ago, Pavel said:

Meanwhile, Bayern chief Hoeness ludicrously claims Sheikh Mansour ‘raises oil price’ to fund Guardiola’s Man City transfer.... Soccer, oil, OPEC....😂

Yes, that's how OPEC works. They set the price of oil based on who Man City want to sign.

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Average Brent oil price from 2009- 2019 about $80/b.  With OECD storage levels near the 5 year average, it seems likely oil prices might return to that average price level.  If we look at real oil prices in 2017$, Brent averaged $87/b in 2017$ from 2006-2017.

Seems Brent real oil price "gravitates" to $87/b in 2017$ at least since tight oil production has become important.

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Would anyone be surprised if I mentioned it might be better to ignore random, short term price fluctuations caused by crazy traders and even crazier computer buy / sell GIGO algorithms .... and look at the longer, bigger picture of global oil & gas and its associated long-term political tug of war.

Trump and Xi should be able to work something out, after playing up the verbal saber rattling to the MSM in order to jockey for better bargaining positions in an eventual trade deal.

Political theatre.  Short term random fluctuations.  Maybe try looking futher ahead.  Looks like clear sailing ahead this year for global oil & gas.

This trade war verbiage is a storm in a teacup, and not any real threat to global oil & gas supply & demand, production & consumption.  The world is not ending tommorrow, or in 12 years (go jump in a lake, AOC).

Go ahead, get riled up about the temporary spikes and dips from nervous traders if you want.  But personally, I don't see any real problem this year for global oil & gas.

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

 

 

Here, have a bonus comfy frog with a couple of snails. Feel more relaxed now?

5f32dbd75b4a654c3088dfb16d5495f50b40c75f970eff58de53d2e56a2e62aa.jpg.133605d450f7e541bc68f3b1ef50e028.jpg

 

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On 3/22/2019 at 7:58 AM, Pavel said:

Oil fell further from 2019 highs on Friday as focus shifted to a lack of progress in U.S.-China trade talks, but prices found support from supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela.“Oil prices have come under pressure in today’s trading session because of profit-taking and uncertainty surrounding the U.S.-China trade talks,” said Abhishek Kumar, head of analytics at Interfax Energy in London. Nevertheless, bullish sentiment is set to prevail in the near term, helped by output cuts by OPEC and its allies and sharply falling production from Venezuela and Iran, Kumar said.

Funny how nobody ever cites this line of reasoning the day, or week before the price drops. It’s always price drop, then the “experts” come out of the woodwork with their “reasoning”.

Revisionist history anyone?

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If you look at the net import line on the import/export weekly EIA chart you will find that over time oil prices seem to defy the BS by MSM and follow what is going in or out of storage. No words needed.

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Boat - Thanks for the information and the link for future reference.

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On 3/23/2019 at 4:19 PM, Tom Kirkman said:

Would anyone be surprised if I mentioned it might be better to ignore random, short term price fluctuations caused by crazy traders and even crazier computer buy / sell GIGO algorithms .... and look at the longer, bigger picture of global oil & gas and its associated long-term political tug of war.

Trump and Xi should be able to work something out, after playing up the verbal saber rattling to the MSM in order to jockey for better bargaining positions in an eventual trade deal.

Political theatre.  Short term random fluctuations.  Maybe try looking further ahead.  Looks like clear sailing ahead this year for global oil & gas.

This trade war verbiage is a storm in a teacup, and not any real threat to global oil & gas supply & demand, production & consumption.  The world is not ending tommorrow, or in 12 years (go jump in a lake, AOC).

Go ahead, get riled up about the temporary spikes and dips from nervous traders if you want.  But personally, I don't see any real problem this year for global oil & gas.

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

 

 

Here, have a bonus comfy frog with a couple of snails. Feel more relaxed now?

5f32dbd75b4a654c3088dfb16d5495f50b40c75f970eff58de53d2e56a2e62aa.jpg.133605d450f7e541bc68f3b1ef50e028.jpg

 

Update to what I said a week ago:

China makes unprecedented proposals talks with US

China has made unprecedented proposals in talks with the United States on a range of issues including forced technology transfer as the two sides work to overcome remaining obstacles to a deal to end their protracted trade war, US officials told Reuters.

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I have noticed the quiet around the China Sea quandry. In return the US has caved to N Korea. Is this all related to the trade deal? 

Another thought/speculation. Is Trump asking to China to cave on Iran and Venezuela as suppliers for oil and nat gas using US supplies in replacement. It would take a chunk out of the trade inbalance.

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