Where is oil headed? 45 or 79?

[Falcon + 222]

1 hour ago, Osama said:

Well Iran says it shot down a U.S. drone. Oil prices near $56 (WTI).

 

The way it looks that now Trump will say something aggressive and it might really touch $60 -  @Top Oil Trader you said that right?

But what if there is no deal at G20? The world is still awash with more than 90 million barrel of oil with 40 million increase only in the month of May due to slower demand and global economic growth.

Do you people see a ride till $60 from here?

@A/Plague, @Falcon, @Streamer

First, Orbital Insight survey puts it much higher than 90 mm bbls.  They are the best source for inventory.  OPEC lies.  

Second, I said "close" above $55. I also stated "unless there is an incident".  

The drone downing has to be taken serious.  Interesting to see how Trump responds. If he just takes out an Iranian refinery or a power plant oil could settle down .  Just destroy their economy.

If Merkel continues to facilitate Iranian commerce. Put that 25% tariff on the auto parts she sends to the US assembly plants.

Trump can't be goaded into a Mideast war by any country . . . Iran, Israel or Saudi Arabia.  Each has their own agenda

 

Edited June 20, 2019 by Falcon

[Streamer + 53]

31 minutes ago, Old-Ruffneck said:

Or you could take the steps of announcing to get the women and children out of Tehran and send 10 MOABs to the city. 

That is precisely the reality that worries me, too! 🤔

[Osama + 248]

1 hour ago, Streamer said:

I really don't believe that Mr Trump is interested in a war. He is a businessman and wants to be remembered eventually for all his great deals - not for being responsible for leading the US into another war. But his colleagues certainly DO seem to want a war  - and it seems that the actual government, congress, in the US doesn't have much of a say in anything nowadays!

But the entire middle east situation is complicated and is not just a US v. Iran face-off. If the situation does flare up into a war then I do not doubt that Mr Trump will be ready to throw everything at the opponent, aiming for a quick and decisive end to it. He has started his election campaign and a prolonged war would seriously get in the way right now - especially as it was Mr Trump himself who withdrew from the Iranian agreement in the first place that has led us to this point - that would be good fuel for the Democrats, I think?.

But, also, if we reach that stage, then looking at numbers we might reach such as $60 will be a waste of time . it will no longer be a "normal" supply/demand - technical analysis predictive model scenario. The Hormuz strait is hugely important, passing 30% of global seaborne oil. Any serious threats to merchant shipping on that route will be explosive in several ways!

I think it is worth remembering that old cliché "Buy the rumour, sell the fact". Markets trade the difference between where price is and where they think it ought to be. This G20 meeting between the two leaders is not just about their meeting. As I understand it, teams from both sides will already be meeting even before the Trump/Jinping meet. This does give it a flavour of seriousness and commitment - and why wouldn't they both be looking for a resolution of the situation? But, naturally, it is not going to all happen overnight!

So the markets will continue to trade up on the optimism until and unless there are signs that it is failing to make progress - and if that happens, then, as you suggest, there will be a freefall back to recent lows - unless, in the meantime, we have a war!  

Well, that's my take on it, for what its worth. I've been long oil for 2 days, but just closed out to see what the US reaction is to the downed drone this morning..........

I totally agree. Great analysis! Except re Trump

[Top Oil Trader + 469]

yes this iran thing "he said she said" like a bunch of small children, will get oil to 62. This possibly could be the high for from this point. Once the kids put down their shovels and play nice again, oil should head down to about 46.

Edited June 21, 2019 by Top Oil Trader

[Old-Ruffneck + 1,246]

9 hours ago, Top Oil Trader said:

yes this iran thing "he said she said" like a bunch of small children, will get oil to 62. This possibly could be the high for from this point. Once the kids put down their shovels and play nice again, oil should head down to about 46.

You seem to take this matter as if it's not of importance. 2 oil tankers (Japanese) mined and 2 drones shot down. Not a kids game by any means and like a flick of a switch could escalate to massive strikes from both sides. Price will go up, Trump understands the negative of full all out war. But poke the Bear too many times...…could be a full onslaught incursion and Iranian war Lords seeking asylum. IMHO

[Top Oil Trader + 469]

Just watching the news, will never get you to the bottom of things.

[Top Oil Trader + 469]

So it should be evident by now, that trading in and out daily is impossible unless news is on your side. The reason is, we have too many bots taking profits out of the market at any given time, and therefore profit potential for traders diminished greatly in the last 10 years. However, though the bots are created by Math Phds, the phds are still not traders and as such there are ways to beat them

[Top Oil Trader + 469]

So as i mentioned in the low 50s. 62 will be the area where crude will hit a wall.

Fundamentally it also makes sense. The only thing that saved crude from going to 46 was the news blaming Iran for some attacks.

This must have caused some funds short positions to have been taken out, and the max shorts stops should be sitting at about 62. Now that Trump is touting MIGA and the glut is still there, and once reality sinks in, and the weak hands short positions are cleaned out, unless a war does pan out, which of course depends on the Neocons Warhawks right now stealing the show, Bolton and Pompeo, crude could drop to the forties. So 62 doesn't have to be the absolute top, but crude will show its true colors right around there.

The problem is if war does break out, it will cause some serious trouble, in Iran, Turkey, Iraq, Lebanon, Israel and the Sauds, this obviously could take crude way past 62. So its still possible that Iran could  be blamed for a serious attack, for example to a manned vehicle. Remember Trump said the fact that Iran only took down a $110 Mill drone, and no one was hurt did not justify him taking lives in return.

So in summary at 62 Crude hits a brick wall, if War breaks out, then prices will go much higher, if war ships are withdrawn from hormuz, the prices should sink again, like the Titanic.

[Top Oil Trader + 469]

LIke i said earlier when oil was almost at 51. The only thing that could move oil above 54.5 would be a John Bolton escalation in Iran which happened 1 day later. and brought it up to 53.5 immediately.  The target from that point is 62. From which it should drop again. Unless a full scale war begins. Then 62 is a  springboard for 70

[Markmano + 5]

need new updates here.  WTI climbed $4  this week already, based only on inventory reports, that are possibly fraudulent in order to favor higher prices.   No war even mentioned, yet price flies to $59  on no news, why ?

12 mil inventory draw ?  how could that occur in global slowdown, and rig count is not decreasing.

FEAR of supply disruption , or FEAR of overwhelming demand ?  which is it ?

I say neither, and  WTI will fall back to $55 levels by next week or sooner.

[Top Oil Trader + 469]

Like i said. Most funds trade based on fundamentals, they dont look at charts due to the bots taken them out all the time.

When Oil sank from 66, it became evident that there was an oil glut and the Sauds where no longer able to move the price higher on empty air. Funds began to short, many went green in the shorts. Now those later short sellers are being stopped out, and their positions could take weeks to liquidate, this is why prices are shooting up, even though no war has started.

 

By roughly 62 most short positions will have been liquidated.

 

However should a war break out, 62 will only be a small pause.

[Osama + 248]

16 hours ago, Markmano said:

need new updates here.  WTI climbed $4  this week already, based only on inventory reports, that are possibly fraudulent in order to favor higher prices.   No war even mentioned, yet price flies to $59  on no news, why ?

12 mil inventory draw ?  how could that occur in global slowdown, and rig count is not decreasing.

FEAR of supply disruption , or FEAR of overwhelming demand ?  which is it ?

I say neither, and  WTI will fall back to $55 levels by next week or sooner.

Well...I concur. But a sentiment, albeit false, that Trump and Xi might settle thwir economic scrum at G20, might help it to cross 60. However, as we all agree... It is going to fall again. 

[Top Oil Trader + 469]

Basically once the US_IRAN war or almost war is over, oil will tank to 40s. The Sauds at that point will have lost the  game, to keep prices up. Since Trump put more sanctions on Iran its likely they are trying to push Iran into a corner, which may cause some accident to happen, which will lead to war and prices would sky rocket. Its very likely some accident will happen, which will cause war. And once Iran is taken out of the game, supply will decrease and keep oil up for a bit.

[Top Oil Trader + 469]

Basically there cant be a war. It quite simple, if US attacks IRAN, IRAN will be supported by Russia and China so it will be a short conflict. 

Once oil starts heading down again, a bit after the conflict is over Oil is headed to 18.

[Jan van Eck + 7,558]

4 hours ago, Top Oil Trader said:

Basically there cant be a war.

There cannot be a war, but not for the reasons you say.  Iran has no effective defenses against US technological superiority and massive firepower superiority.  The US can knock out anything and everything with complete impunity, including sending in cruise missiles at 40 feet off the deck and under the radar, to sail right smack into the heart of Tehran and blast any target the US commanders like.  There is no defense. And there is nothing either the Russians nor the Chinese will or would dare to do. Period.  Nobody is riding the cavalry charge to save Iran's rear end, if the Ayatollahs start shooting it out with the Americans.  Since the Iranians know this, all they will do is engage in asymmetrical warfare, using proxies and crafting plausible deniability. 

The US-China trade war will be on, even if in frozen format, simply because the Canadians are still sitting on the vice-chair of Hauwei Telecom, in house arrest prison in Vancouver.  That is not settling any time soon.  The Chinese continue to ratchet up the pressure on the Canadians, including now banning import of Canadian pork.  Canada's big pork export market was China, and that is now down the drain.  Until that mess is sorted out, there is not going to be any trade deal. 

[Osama + 248]

It seems that oil will fall from here or as JJ said 62 maximum. 

I think so because I don't see any progress in trade talks. But still I am hesitant to take any position right now. Why! May be Trump's unpredictability? 

[Top Oil Trader + 469]

So this is a small drop, its a pause. Pause should end somewhere between 56.5 with 54 being the lowest. Before resuming one more leg up to 62.

[Osama + 248]

On 6/29/2019 at 3:40 AM, Top Oil Trader said:

So this is a small drop, its a pause. Pause should end somewhere between 56.5 with 54 being the lowest. Before resuming one more leg up to 62.

It already touched 60.

I agree with you that after 60-62... One can go into selling and get out after taking atleast a 3-4 dollar drop. 

 

[Top Oil Trader + 469]

Yes , indeed the drop was very small, well it dropped to 57.5 from 59.65, a $2.10 drop i expected at least at $3 drop. So now we are headed to 62-63. If the destroyers head back from hormuz then back down. Otherwise 62-63 could be a level of support, due to fear of war eventually breaking out.

Edited July 1, 2019 by Top Oil Trader

[Top Oil Trader + 469]

But due to oversupply prices should be at about $18. But should war break out and prolong, we should see prices above 90. The war outcome is something the charts cant predict.

[Osama + 248]

28 minutes ago, Top Oil Trader said:

But due to oversupply prices should be at about $18. But should war break out and prolong, we should see prices above 90. The war outcome is something the charts cant predict.

I agree. But sans a war... Prices would fall... I am waiting for your 62 to short sell some barrels

Edited July 1, 2019 by Osama
Extension

[Top Oil Trader + 469]

Well 62 is the target indeed maybe later in the summer, for now were headed under 57. The floor should be about 54. To say oil is volatile, like dropping a crystal vase from a 100 feet, is an understatement.

[Top Oil Trader + 469]

Oil will reverse back up after i get 2 buy signals in a row. Last time i had 2 sell signals in a row was at 59.2 on June 20th. Since oil now broke 58, the next stop is 55.5

[Top Oil Trader + 469]

Based on the charts it now looks like that 60 was the Ceiling for the up move from 50, so at this point 55.5 is next then 53.5, oil needs to hold above 46, to not break down to 18. The one thing that  can move oil up above 62, is only an escalation in Iran. This department belongs to Bolton (the one that got us into the Iraq war and wants a N. Korea war)  and Pompeo's, ( former CIA head).

[Top Oil Trader + 469]

57.5 next, then if it cant hold and go to 58, then 53.5 next.