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Can Oil hit 70$

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Haven't been here for a while. But back when oil was trading in the 50s I said unless we have some serious escalation with Iran Oil wont move above 60. I thought the war would start after 2020, likely after Trump is reelected, but i guess the neocons couldnt wait. Trump is realizing he will have no problems winning again, no matter what, and since regime change in Iran has to happen, for whatever reason the neocons have, annoying Iran by killing soleiman, was a way to start a war. or at least get them to threaten.

Now Trump says he doesn't want war, the democrats think he did it to due to the impeachment news, who knows.

Looking at a chart, Oil eventually will trade between 25-15. But not now during the uncertainties of war. Once the uncertainties are done with And regime change is done with, Oil will start crashing again. For now the fear of war, made the hedgefunds cover their big shorts from the 60s of last year. And since not all hedgefunds are convinced there will be a war, some will need to cover at higher prices, once they meet their pain thresholds.

So yes should Iran make some dumb moves Oil could continue to rise, however, the assumption is Iran will eventually play it safe. 

For now the US is keeping prices high, this will benefit the sauds for now. But once the Sauds and Iran/US make peace, it will be the beginning of the end of the prices in the 60s, or higher 70s+  in the sad event that war breaks out

So my view here is longterm not the in and out everyday, of course oil will continue to fluctuate everytime we have more tweets either from Trump or the Iranians. 

But look for the price of oil to eventually come down, once we have peace between the sauds and Iran or Iran and US. Or a forced regime change.

Other threats to the eventual fall of crude will be the brick nations, especially Russia, circumventing the petrodollar..

Russia can be put out to pasture, should the us drop the prices to $30 - $40, which is a card the US can replay once the tweets between Iran and the US are over. 

So therefore, I still think prices will continue to move higher due to more talk of a potential war. but this will be near term.

 

 

 

 

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4 hours ago, Top Oil Trader said:

Russia can be put out to pasture, should the us drop the prices to $30 - $40, which is a card the US can replay once the tweets between Iran and the US are over. 

Some interesting analysis, but at $30 - $40 there will be very little oil being pumped in the USA unless producers are happy to burn money.

Edited by remake it
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We can get out the crystal ball and play ‘forecast the price of oil’ until the cows come home. We’ve essentially been doing this for the past 4+ years.

The global political situation will drive it up or down until the present issue is resolved and the next issue arises - this is temporary in the overall scheme of things.

The same could be said for the actions of OPEC+. This is an artificial constraint on production. What do we expect to happen once this alliance falls apart?

We keep hearing about a ‘surplus’ of oil, where does this come from? To the best of my knowledge the only region which even attempts to realistically quantify supply is North America. What about the rest of the world? We could just as easily wake up tomorrow to a global shortage.

At the end of the day, the only thing that will positively affect the price of oil, in the ling term, is global demand.

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The US, Canada and Mexico could freeze the oil price at say $55-$60 for N America and let the oil games begin. If Iraq loses control of their security the world importers will be in trouble.

GW and the Republicans who gave Iraq to the Shiite were brilliant eh?

PS, N America is oil independent. How convenient in these turbulent times.

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22 minutes ago, Douglas Buckland said:

We can get out the crystal ball and play ‘forecast the price of oil’ until the cows come home. We’ve essentially been doing this for the past 4+ years.

The global political situation will drive it up or down until the present issue is resolved and the next issue arises - this is temporary in the overall scheme of things.

The same could be said for the actions of OPEC+. This is an artificial constraint on production. What do we expect to happen once this alliance falls apart?

We keep hearing about a ‘surplus’ of oil, where does this come from? To the best of my knowledge the only region which even attempts to realistically quantify supply is North America. What about the rest of the world? We could just as easily wake up tomorrow to a global shortage.

At the end of the day, the only thing that will positively affect the price of oil, in the ling term, is global demand.

World oil demand has been around 1.3 mbpd since 1950. Don’t look for that to change much. 
Venezuela oil has been curtailed, Iranian oil has been curtailed, Russian and Saudi oil has been curtailed. Plenty of oil out there. Higher prices are dependent on weather and the whims of politicians. 

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In the long run the huge developing populations in China, India, Africa, Asia and South America will drive demand. These developing populations will aspire to the prosperity in North America and Europe (as presented on mass media daily) and are not going to give a damn about ‘climate change’ or related renewable nonsense...and who can blame them?

This has absolutely nothing to do with the weather or whims, these people feel entitled to a better standard of living, which can realistically only be provided by oil.

It could be years before we see the effect on demand, but rest assured it is coming.

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When I wrote this post I hadnt bother to look at the chart, since I don't trade WTI. Today I looked at the chart, and at least 65+ is a given. Fundamentally, some more news stories about a potential war in IRAN will cause a major spike, and a mass exodus of hedgefunds, with shorts from last year.

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23 hours ago, Douglas Buckland said:

We can get out the crystal ball and play ‘forecast the price of oil’ until the cows come home. We’ve essentially been doing this for the past 4+ years.

You may have been, I will stick with the 8ball and tortoise shells.

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1 minute ago, DayTrader said:

You may have been, I will stick with the 8ball and tortoise shells.

Good call!!!!

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(edited)

We see demand rising dramatically fast in comparison with historical context, look at the last decade, oil+natural gas together would give you better picture.

4 billion people are going fast in the direction of 1.5 billion OECD+Gulf countries  Populations as far as per capita comsumption is concerned.

My crystal ball, since 2025-2027 oil would be permanently over 80 USD in 2019 money.

Look at supply, No new significant discoveries, Ok technology is more advanced every year, but somehow we are utilizing the last drops: shale oil, oil sands, deep offshore, in the near future Arctic.

Edited by Marcin
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23 hours ago, Boat said:

World oil demand has been around 1.3 mbpd since 1950. Don’t look for that to change much. 
Venezuela oil has been curtailed, Iranian oil has been curtailed, Russian and Saudi oil has been curtailed. Plenty of oil out there. Higher prices are dependent on weather and the whims of politicians. 

I disagree.  Venezuela is pumping as much as possible for Cuba Russia and China. Iran mabey some is curtailed but the rest is black marketed. If theres money involved people will go to any length to get it ...like "cutting" supplies to raise prices Saudi style (perfect cover for aging fields). Russia... not a large enough curtailment to matter.

So if I re word your last sentence..."the whims of dictators" and remove the unchanging world demand. Also there is no mention of places that have declined over the last few years? 

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Found Angola 16' 1.8M to 19' 1.3M , Colombia 15' 1M to 19' .850M , and Mexico 17' 2M to 19' 1.6M . 

I've seen these names so didnt take me long to find / not sure if theres more but that's .400+.150+.500= 1.050M decline. 

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“Look at supply, No new significant discoveries, Ok technology is more advanced every year, but somehow we are utilizing the last drops: shale oil, oil sands, deep offshore, in the near future Arctic.”

How can you have any ‘significant discoveries’ when the oil price is low and volatile (bases on geopolitics)? Do you honestly think that anybody is putting money into an exploration budget now?

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Most of the world, maybe not including parts of Siberia is already geologically explored, you cannot find many new 10 Gb fields or even 1 Gb fields. We consume 1 Gb of crude every 10 days.

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On 1/6/2020 at 4:38 AM, Boat said:

The US, Canada and Mexico could freeze the oil price at say $55-$60 for N America and let the oil games begin. If Iraq loses control of their security the world importers will be in trouble.

GW and the Republicans who gave Iraq to the Shiite were brilliant eh?

PS, N America is oil independent. How convenient in these turbulent times.

You only need to repeat this lie from your last paragraph 999 times more and according to Goebbels it would be true.

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(edited)

On 1/5/2020 at 5:46 PM, Top Oil Trader said:

Haven't been here for a while. But back when oil was trading in the 50s I said unless we have some serious escalation with Iran Oil wont move above 60. I thought the war would start after 2020, likely after Trump is reelected, but i guess the neocons couldnt wait. Trump is realizing he will have no problems winning again, no matter what, and since regime change in Iran has to happen, for whatever reason the neocons have, annoying Iran by killing soleiman, was a way to start a war. or at least get them to threaten.

Now Trump says he doesn't want war, the democrats think he did it to due to the impeachment news, who knows.

Looking at a chart, Oil eventually will trade between 25-15. But not now during the uncertainties of war. Once the uncertainties are done with And regime change is done with, Oil will start crashing again. For now the fear of war, made the hedgefunds cover their big shorts from the 60s of last year. And since not all hedgefunds are convinced there will be a war, some will need to cover at higher prices, once they meet their pain thresholds.

So yes should Iran make some dumb moves Oil could continue to rise, however, the assumption is Iran will eventually play it safe. 

For now the US is keeping prices high, this will benefit the sauds for now. But once the Sauds and Iran/US make peace, it will be the beginning of the end of the prices in the 60s, or higher 70s+  in the sad event that war breaks out

So my view here is longterm not the in and out everyday, of course oil will continue to fluctuate everytime we have more tweets either from Trump or the Iranians. 

But look for the price of oil to eventually come down, once we have peace between the sauds and Iran or Iran and US. Or a forced regime change.

Other threats to the eventual fall of crude will be the brick nations, especially Russia, circumventing the petrodollar..

Russia can be put out to pasture, should the us drop the prices to $30 - $40, which is a card the US can replay once the tweets between Iran and the US are over. 

So therefore, I still think prices will continue to move higher due to more talk of a potential war. but this will be near term.

 

 

 

 

Trump has almost complete control of prices.  SA and USA are in full cooperation.  Iran is off the market.  Iraq is going to be off the market.  Mexico? Libya? Venezuela?  Good luck with stability and “certainty” from those nations.  Russia loves higher prices, will gladly take some of Iran and Iraq market share. 

 

1.    Saudi Arabia: US$182.5 billion (16.1% of total crude oil exports)

2.    Russia: $129 billion (11.4%)

3.    Iraq: $91.7 billion (8.1%)

4.    Canada: $66.9 billion (5.9%)

5.    United Arab Emirates: $58.4 billion (5.2%)

6.    Kuwait: $51.7 billion (4.6%)

7.    Iran: $50.8 billion (4.5%)

8.    United States: $48.3 billion (4.3%)

9.    Nigeria: $43.6 billion (3.8%)

10. Kazakhstan: $37.8 billion (3.3%)

11. Angola: $36.5 billion (3.2%)

12. Norway: $33.3 billion (2.9%)

13. Libya: $26.7 billion (2.4%)

14. Mexico: $26.5 billion (2.3%)

15. Venezuela: $26.4 billion (2.3%)

 

my prediction is prices creep up to just over $75 wti before dropping back down to about $59 right before election.  Trump dictates this market now.  

Edited by BigJets

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On 1/6/2020 at 12:18 AM, Douglas Buckland said:

In the long run the huge developing populations in China, India, Africa, Asia and South America will drive demand. These developing populations will aspire to the prosperity in North America and Europe (as presented on mass media daily) and are not going to give a damn about ‘climate change’ or related renewable nonsense...and who can blame them?

This has absolutely nothing to do with the weather or whims, these people feel entitled to a better standard of living, which can realistically only be provided by oil.

It could be years before we see the effect on demand, but rest assured it is coming.

The demand of an average of 1.3 mbpd for the world is mainly from Asia. Developed countries demand is little to none due to improved efficiency. Charts are easy to find. This is not new information. No need to go on a tirade about the entitlement of poor people burning FF. This effect of global demand has been going on since 1950 at an average of 1.3 mbpd. Before 1950 do your own math.

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9 hours ago, Marcin said:

You only need to repeat this lie from your last paragraph 999 times more and according to Goebbels it would be true.

Who knows what you think of as a lie but when it comes to oil and nat gas the US and for that matter N America, both are net energy independent. Do you understand what net means? 

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4 hours ago, BigJets said:

Trump has almost complete control of prices.  SA and USA are in full cooperation.  Iran is off the market.  Iraq is going to be off the market.  Mexico? Libya? Venezuela?  Good luck with stability and “certainty” from those nations.  Russia loves higher prices, will gladly take some of Iran and Iraq market share. 

 

1.    Saudi Arabia: US$182.5 billion (16.1% of total crude oil exports)

2.    Russia: $129 billion (11.4%)

3.    Iraq: $91.7 billion (8.1%)

4.    Canada: $66.9 billion (5.9%)

5.    United Arab Emirates: $58.4 billion (5.2%)

6.    Kuwait: $51.7 billion (4.6%)

7.    Iran: $50.8 billion (4.5%)

8.    United States: $48.3 billion (4.3%)

9.    Nigeria: $43.6 billion (3.8%)

10. Kazakhstan: $37.8 billion (3.3%)

11. Angola: $36.5 billion (3.2%)

12. Norway: $33.3 billion (2.9%)

13. Libya: $26.7 billion (2.4%)

14. Mexico: $26.5 billion (2.3%)

15. Venezuela: $26.4 billion (2.3%)

 

my prediction is prices creep up to just over $75 wti before dropping back down to about $59 right before election.  Trump dictates this market now.  

You need net export numbers. The US exports for example come from primarily foreign import. Only in the last couple of months did the US become a net oil exporter. What I read was about 80,000 bpd. The US gets around 3.4 mbpd from Canada. 

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15 hours ago, Douglas Buckland said:

“Look at supply, No new significant discoveries, Ok technology is more advanced every year, but somehow we are utilizing the last drops: shale oil, oil sands, deep offshore, in the near future Arctic.”

How can you have any ‘significant discoveries’ when the oil price is low and volatile (bases on geopolitics)? Do you honestly think that anybody is putting money into an exploration budget now?

The US is the worlds largest producer but has the highest reserves ever. As the price rises oil we know about goes to the calculation of drillable. The opposite happens if oil went to say $30. Reserves would substantially decrease. Bottom line, plenty of oil out there.

Been having this same discussion for over 10 years. It requires reading to understand oil the different types of reserves. But a high price point brings out those exploration budgets and the billions for the next phase of technology as demonstrated by fracking.
 

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16 hours ago, Rob Kramer said:

I disagree.  Venezuela is pumping as much as possible for Cuba Russia and China. Iran mabey some is curtailed but the rest is black marketed. If theres money involved people will go to any length to get it ...like "cutting" supplies to raise prices Saudi style (perfect cover for aging fields). Russia... not a large enough curtailment to matter.

So if I re word your last sentence..."the whims of dictators" and remove the unchanging world demand. Also there is no mention of places that have declined over the last few years? 

Venezuela charts show oil cut over 1 mbpd, Iran 2 mbpd, OPEC, Russia 1.2 mbpd. These cuts are fairly recent so some think not only can this oil come back online but production go higher at a higher price point. Same with Canada and the US. Higher price points point to higher production. But hey, just an opinion based how oil price cycles over decades.

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(edited)

17 hours ago, Marcin said:

We see demand rising dramatically fast in comparison with historical context, look at the last decade, oil+natural gas together would give you better picture.

4 billion people are going fast in the direction of 1.5 billion OECD+Gulf countries  Populations as far as per capita comsumption is concerned.

My crystal ball, since 2025-2027 oil would be permanently over 80 USD in 2019 money.

Look at supply, No new significant discoveries, Ok technology is more advanced every year, but somehow we are utilizing the last drops: shale oil, oil sands, deep offshore, in the near future Arctic.

https://ycharts.com/indicators/world_oil_consumption

Show your dramatic rise in historical context please. I don’t think you have ever followed oil.

If the price point became to high don’t you think biofuels would take away food and there by balance demand? Anyhow here is another source with consumption numbers. 
 

https://www.statista.com/statistics/271823/daily-global-crude-oil-demand-since-2006/

I see no dramatic rise in demand. 
 

 

Edited by Boat
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48 minutes ago, Boat said:

You need net export numbers. The US exports for example come from primarily foreign import. Only in the last couple of months did the US become a net oil exporter. What I read was about 80,000 bpd. The US gets around 3.4 mbpd from Canada. 

Is there a top exporter missing from that list?  The point remains.  The bottom 3 on the list are as unstable as ever in their respective history (Venezuela, Mexico and Libya).  Iran is out.  Iraq is next.   That’s 5 of the top 15 from last year.  

If I’m buying oil from Venezuela, Mexico, Libya, Iran or Iraq in 2020 i am very concerned; uncertain.  

Supply on the real market (not black market) is taking a considerable whack.

The flow doesn’t have to stop only needs to be disrupted, and hello uncertainty; higher prices.  

SA is in full cooperation with USA

russia will gladly take higher prices and more market share.

some people are saying Iran refineries will be the next target if Iran wants to take it there.  

Supply can tighten very quickly 

The nations who have supply and/or good relations already should be fine.  But if you aren’t in that category, yikes!  How to fill the void, hmm 🤔 tell USA, “but you have to!!!!”

Big wake up call coming to the entire world.

America first!  

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Charts is not a crystal ball. The fact the most if any have no clue on charts, is the reason they consider charts a crystal ball.

What happens in all cases, is that the charts predict future the events, the exact event though is not predicted in charts, for that you "would need" a crystal ball or two.

For example if you look at the Dow, it still have a bit to go before a major pullback. 2 years ago when the dow was 27,000 I said we would have a drop, which we did of a couple of thousand points, but at the same time when everyone was worried this was the beginning of the big correction,  I mentioned based on charts we still would see new highs, which we are now seeing. The pullback will be so major though, it will surprise most analysts and banks, who some are only predicting an 8-10% pullback. Indeed that will just be the beginning. 

 

 

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