Don't Climb Onto the $80+ Oil Price Greed Roller Coaster, Please.

[Tom Kirkman + 8,860]

No.  Just ... NO.
Stick to $70.00 Brent, please.

$70 Brent should keep global oil prices relatively stable.

OPEC getting greedy and pushing for $80+ Brent is very bad news, in my opinion, as it will upset the current, suitable, sustainable balance between most global oil producers and most global oil consumers.

Even $75 Brent is too high, in my opinion, as it will just push down oil prices again later.

Enough already with the $80+ oil price greed roller coaster.

● $70.00 Brent seems optimum to me. ●

Clearly, many others will disagree.  I've heard the many arguments for $80+, $90+, $100+, $140+ oil, but I simply do not agree that these higher oil prices are sustainable.

Short term greed wrecks havoc on global economies.

The Perfect Storm That Could Drive Oil Even Higher

After rallying more than 30 percent year to date, oil prices could be set for a further upside in coming weeks as a combination of near-term bullish supply-side factors could push prices higher than current levels.

... Saudi Arabia and several other OPEC producers need oil prices above $80 for budget purposes and are unlikely to be happy with only $70 a barrel Brent, Hansen said, adding:

“On that basis, we expect supply to be kept tight over the coming months, thereby supporting a potential extension towards $75/b before it eventually runs out of steam amid renewed concerns about the negative impact to global growth.”  

[cbrasher1 + 272]

no need for 80+ oil, will derail the global growth that is nicely at the $70 range. Anyone pushing for higher does not understand economics.  Even for us out here working to high a price is bad, everyone will pump like no tomorrow, therefore creating oversupply again causing prices to drop as we seen 4th quarter last year. So I concur with your assessment of the current prices being just right @Tom Kirkman

[Tom Kirkman + 8,860]

3 minutes ago, cbrasher1 said:

no need for 80+ oil, will derail the global growth that is nicely at the $70 range. Anyone pushing for higher does not understand economics.  Even for us out here working to high a price is bad, everyone will pump like no tomorrow, therefore creating oversupply again causing prices to drop as we seen 4th quarter last year. So I concur with your assessment of the current prices being just right @Tom Kirkman

Thanks @cbrasher1 .  Sometimes I wonder if I don't express the reasons behind my opinions clearly enough. 

While I don't expect others to agree with my opinions, it's nice when others do agree.  It's also good that others do understand the rationale behind my opinions about oil prices that I keep harping about.

[cbrasher1 + 272]

as for KSA, they have brought their woes upon themselves, I look at it in the form of a household income, if you cannot meet your budget and bills, get another job i.e. diversify, but they are dependent on one source of income, and I feel it is to late to change that dependency, but don't make global progress downturn due to your inability to change and your country dependent on government entities that you created on your own.

[Tomasz + 1,608]

Please also dont forget that dollar index is up 10 % in comparison to last year and more than 20 % to 5 years ago.

In euro area or some other emerging markets and also for producers it means something more similar to 90 $ per barrel than 70 $.

[D Coyne + 305]

Tom,

It is not clear that $70/b for Brent will lead to adequate supply on World markets.  If it does, as you suspect, then it might be the Goldilocks price, some (including me) think a little higher, perhaps $75/b for Brent might be needed to keep supply and demand balanced.  Time will tell, restricting Iranian exports to zero as Trump will have in place by May 2 is likely to put upward pressure on the market clearing Brent oil price.

[Tom Kirkman + 8,860]

3 hours ago, D Coyne said:

Tom,

It is not clear that $70/b for Brent will lead to adequate supply on World markets.  If it does, as you suspect, then it might be the Goldilocks price, some (including me) think a little higher, perhaps $75/b for Brent might be needed to keep supply and demand balanced.  Time will tell, restricting Iranian exports to zero as Trump will have in place by May 2 is likely to put upward pressure on the market clearing Brent oil price.

Renember just a few years ago ... the media and analyst mantras for oil prices such as:

"Lower for Longer"

"$40 Forever"

 

My view is if Oil Companies are unable to make a reasonable profit at $70 Brent, then the CEOs of International Oil Companies and the Government Leaders (mostly absolute dictators) of National Oil Companies should be in the running for Darwin Awards for failing to be able to achieve reasonable oil prices in the 21st century.

The glory days of OPEC are fast fading into the sunset.

Countries that require $90+ oil to sustain their absolute dictatorships with their country's one-trick-pony of relying 90% on oil revenues need a serious resetting and a severe reality adjustment.  Darwin Award show time, perhaps, for being too lazy and too corrupt to adapt and survive to global changes.

Countries that require $90+ oil to survive are soon to become akin being as relevant as manufacturers of buggy whips - useful a century ago, but not so much today.

Survival of the fittest.  Darwin.  Adapt or die.

 

Related rant:

Preparing for Zombie Apocalypse for less than $1,200 in just one weekend

... If you are not yet so fat and lazy that you rely on a "free" government scooter to move about the world, then you may still have hope.

These two professional voters were literally stuck in this gutter.  Pathetic.  What are they going to do?  Call AAA?

[Uduak + 22]

On 4/22/2019 at 1:32 AM, Tom Kirkman said:

No.  Just ... NO.
Stick to $70.00 Brent, please.

$70 Brent should keep global oil prices relatively stable.

OPEC getting greedy and pushing for $80+ Brent is very bad news, in my opinion, as it will upset the current, suitable, sustainable balance between most global oil producers and most global oil consumers.

Even $75 Brent is too high, in my opinion, as it will just push down oil prices again later.

Enough already with the $80+ oil price greed roller coaster.

● $70.00 Brent seems optimum to me. ●

Clearly, many others will disagree.  I've heard the many arguments for $80+, $90+, $100+, $140+ oil, but I simply do not agree that these higher oil prices are sustainable.

Short term greed wrecks havoc on global economies.

The Perfect Storm That Could Drive Oil Even Higher

After rallying more than 30 percent year to date, oil prices could be set for a further upside in coming weeks as a combination of near-term bullish supply-side factors could push prices higher than current levels.

... Saudi Arabia and several other OPEC producers need oil prices above $80 for budget purposes and are unlikely to be happy with only $70 a barrel Brent, Hansen said, adding:

“On that basis, we expect supply to be kept tight over the coming months, thereby supporting a potential extension towards $75/b before it eventually runs out of steam amid renewed concerns about the negative impact to global growth.”  

Is anyone tying the actions of U.S. President Donald Trump to the current increase in oil prices? I mean with regards to Iran and Venezuela?

[Tom Kirkman + 8,860]

53 minutes ago, Uduak said:

Is anyone tying the actions of U.S. President Donald Trump to the current increase in oil prices? I mean with regards to Iran and Venezuela?

Trump's Latest Oil Market Gamble

Global oil prices started the week by spiking around 3 percent on reports that Washington was preparing to announce that all buyers of Iranian oil will have to end those imports soon or face U.S. sanctions. Reuters cited a Washington Post article and sources stating that the U.S. will announce the termination of Iranian oil import sanctions waivers on Monday.

... However, it’s also possible that Trump is raising the geopolitical ante with Iran, figuring that with the loss of Iranian barrels from the market in addition to the OPEC+ production cut still in place and the loss of barrels from Venezuela and Libya, that Saudi Arabia will be forced to take action and ramp up production. After all, it was the Saudis, according to numerous reports, that influenced Trump to reimpose crippling sanctions against regional foe Iran last year. ...

[Old-Ruffneck + 1,239]

16 minutes ago, Tom Kirkman said:

Trump's Latest Oil Market Gamble

Global oil prices started the week by spiking around 3 percent on reports that Washington was preparing to announce that all buyers of Iranian oil will have to end those imports soon or face U.S. sanctions. Reuters cited a Washington Post article and sources stating that the U.S. will announce the termination of Iranian oil import sanctions waivers on Monday.

... However, it’s also possible that Trump is raising the geopolitical ante with Iran, figuring that with the loss of Iranian barrels from the market in addition to the OPEC+ production cut still in place and the loss of barrels from Venezuela and Libya, that Saudi Arabia will be forced to take action and ramp up production. After all, it was the Saudis, according to numerous reports, that influenced Trump to reimpose crippling sanctions against regional foe Iran last year. ...

Now the oil is 65bbl WTI maybe now would be a good time to sell of the SPR oil in 2mmb increments. At 2mmb daily there is approx. 1 years at that rate. Soften the blow so to speak by adding. Since a lot is sour crude, keep it here and sell more sweet. Just a thought.

@Rodent just posted: https://oilprice.com/Latest-Energy-News/World-News/US-Wont-Release-SPR-Barrels-To-Calm-Oil-Markets.html

Edited April 23, 2019 by Old-Ruffneck
new info

[Rodent + 1,424]

1 hour ago, Old-Ruffneck said:

Now the oil is 65bbl WTI maybe now would be a good time to sell of the SPR oil in 2mmb increments. At 2mmb daily there is approx. 1 years at that rate. Soften the blow so to speak by adding. Since a lot is sour crude, keep it here and sell more sweet. Just a thought.

@Rodent just posted: https://oilprice.com/Latest-Energy-News/World-News/US-Wont-Release-SPR-Barrels-To-Calm-Oil-Markets.html

It really is an interesting situation. You have Saudi Arabia salivating over the finally complete crackdown on Iranian oil exports. Bahrain too, as they have a super high breakeven. It's really a win, win. Iran gets hurt financially and its people will get squeezed, putting pressure on those in power. Add to that the higher oil prices that The Kingdom will enjoy, allowing for more juicy perks for its own people. OPEC still has the option to turn on the taps to compensate, and to reclaim market share that Iran will be losing. The US will be happy to let the Saudi's snag some of it for themselves.

I guess I don't see the United States letting go of anything in the SPR. They will wait for OPEC to ramp up production if they are able. The American people can weather higher gasoline prices. These higher oil prices will help US shale who are struggling under a mountain of debt that others here have discussed at length. Also in the mix is the fact that China may not stop buying Iranian crude, a fact that will put a lid on the price hike. Washington knows that, I'm sure.

I expect that prices will not go too high or stay too high. 

[Auson + 123]

3 hours ago, Old-Ruffneck said:

Now the oil is 65bbl WTI maybe now would be a good time to sell of the SPR oil in 2mmb increments. At 2mmb daily there is approx. 1 years at that rate. Soften the blow so to speak by adding. Since a lot is sour crude, keep it here and sell more sweet. Just a thought.

@Rodent just posted: https://oilprice.com/Latest-Energy-News/World-News/US-Wont-Release-SPR-Barrels-To-Calm-Oil-Markets.html

Thats a great plan however. https://www.bloomberg.com/news/articles/2019-04-12/tainted-oil-exxon-others-say-u-s-government-sold-toxic-crude