Commodity Trade Mantra

All posts under ‘Crude Oil Trading’

Why The Price of Oil Tanked And Why It’ll Stage A Comeback

WTI spreads stayed in a bearish pattern this week with help from a flood of imported crude into the US, a modest inventory build in Cushing and OPEC deal jitters which were particularly harsh. Our current view still calls for a $47-$55 range heading into the OPEC meeting later this month and we see several reasons why oil should find its footing and potentially rebound in the near term.

OPEC’s Gloomy Long-Term Outlook For The Oil Market

Given the election is dominating much of the movement in markets today, and given the timely release of OPEC’s World Oil Outlook, today’s post digs into some of the longer-term trends emerging in the oil market. Here are six things to consider. Developing nations will lead demand growth (no surprise there), driven by the transportation sector.

Oil Prices Rocked By OPEC Reports - But Can’t Stay Low For Much Longer

Due to a very high degree of uncertainty surrounding OPEC intentions, there is likely to be further volatility in US trading on Friday and the potential for significant price gaps at the market open next week. Overall dollar trends will continue to have a significant impact on underlying crude oil prices. Remember, oil prices will not languish at the current depressed levels forever.

Global Oil could be a True Body Blow to the US Dollar

What happens when more parties reject the Brent quote as an accurate daily price quote for oil? President Putin has stated many times that he wants to move away from the US dollar in trade. Global oil buyers would soon fall into line & begin paying that basket price. If the Brent oil quote falls apart in Europe — replaced by Urals blend quote — It would be a true body blow to the US dollar.

Is Putin’s Support For An OPEC Freeze A Game Changer for Crude?

The array of comments from OPEC and Russian officials over the past week could signal that a real effort might be underway to reach a deal on freezing production. Iraq would support a deal; Iran will attend the meeting & the potential for an OPEC deal received an endorsement from a surprising source – Russian President Vladimir Putin threw his weight behind a production freeze.

The US Dollar Strength Takes Its Toll On Oil Prices Again

As we exit summer driving season, and as refinery maintenance ramps up, demand eases, and typically… oil prices come under pressure. The return of oversupply fears are clobbering the crude oil complex lower, with gasoline leading the charge. With Nonfarm Friday on deck, bringing the prospect of a stronger dollar, here are five things to consider in oil markets today.

The Biggest Wildcard For Oil Prices Right Now - China

China’s record purchases, along with temporary production outages in Nigeria and Canada, helped rebalance supply and demand in the oil market. However, since that is now over, stopping shipments for the reserve would wipe out about 15% of the country’s imports & the price of oil would plunge as the already oversupplied market would find itself with an unprecedented glut of excess production.

Crude Oil Enters Bull Market Amid Output Freeze Talk

An emphasis by oil companies on frugality in operations mean a certain amount of cost-cutting should be sustained in the coming years. Slashed expenditures in the oil industry are expected to add up to $1 trillion dollars over the 2015 – 2020 period. Dollar weakness & production freeze hopes combine again to rally crude oil prices higher. Here are 5 things to consider in crude oil markets today.

OPEC Rumours Continue To Pull Oil Prices Higher

Oil prices hit one a month high on Monday thanks to speculation about potential producer curbs on supply and new data from market intelligence firm Genscape showing an estimated draw of more than 350,000 barrels per day at the Cushing OK delivery point. Although oil prices reacted stoically on last week’s rig count report, the amount of rigs added to the Permian basin is starting to add up.

Will The Rally In Crude Oil Prices End Today?

The market sell off on product market concerns did not lead any notable change in crude oil fundamentals. Refiners have yet to pull back meaningfully on crude oil purchases & crude oil inventory builds are only starting to turn bearish in both the weekly US statistics and globally. US crude oil inventories are set to build above normal over the coming months.

OIL - The Untold History of Black Gold & How it began the Political Strategies of the West

The political strategy of the U.S. had to adapt to provide for the needs & wants of the American population. The ‘70s marked the turning point when the U.S. shifted from being an oil exporter to the world’s largest oil importer. The oil crisis of 1973 was the game changer that transformed the international political & financial system into the current system of petrodollars & oil wars.

Morgan Stanley Expects Oil Prices To Hit $35 In A Few Weeks

Morgan Stanley’s Adam Longson has been one of the most bearish sellside analysts on oil, and overnight he confirmed he isn’t going to change his opinion any time soon. Greater headwinds lay ahead, especially for crude oil. US crude oil stats are likely to trend bearish over the coming months. Putting a number to his call: oil prices will slide to $35 in the next 1-3 months.

End of Driving Season Means More Declines In Crude Oil Prices

The driving season ends next month, which is when most refineries shut down for maintenance after operating at near-full capacity during the summer months. This is—historically—when gasoline demand subsides. The end of summer travels is also when gasoline stockpiles in the U.S. could increase, further pushing down crude oil prices.

Oil Prices Hint Bear Market As Short Positions Surge To 10 Year High

The latest CFTC data show that speculators increased their shorts (bearish bets) by the biggest volume on record in last week’s data for WTI crude oil. Saudi Arabia has cut its official selling price (OSP) for Arab Light into Asia for September by the biggest amount in nearly a year. The price discount is a response to lower impending Asian oil demand as refiners dial back on runs.

Slump In Oil Prices May Burn The Oil Industry Again

When oil prices fall, volatility increases & the floodgates of capital open. Every genius-investor wants to buy low & sell high. Rig count rises with fresh capital, production increases & oil prices fall. When oil prices rose from $26 in mid-Feb to over $51 by early June, the rig count change rate exploded. Predictably, oil prices are falling again on continuing the same thing that got you in trouble before.

The US Shale Industry Is Painfully Adapting to Low Oil Prices

The rise in oil prices over the past six months has come as a blessing for the battered US shale producers. Oil prices have risen more than 50% since January, giving a glimmer of hope to the US oil industry that the worst of the oil crisis might finally be behind them. Moreover, it forced the shale producers to adapt by reducing production costs and increasing efficiency.

Why Any Major Crash in Oil Prices Remains Unlikely

At oil prices below $40 a barrel, virtually no new drilling occurs. As a result, oil prices today may be artificially boosted by market speculation, but as long as they don’t go high enough to lead to significant new drilling, fundamentals will eventually catch up and production will fall dramatically. That in turn will support current oil prices and perhaps even higher prices in the future.

Oil Prices can Spike on $1 Trillion In Spending Cuts

An oil supply deficit may be hard to fathom given two years of surplus and rock bottom oil prices, but with the financials of so many oil companies badly damaged, upstream investment could come up short in the not-too-distant future, even if oil prices continue to rise this year. The small increase in the US oil rig count over the past few weeks is not nearly enough to reverse the decline.

Brace for a Correction in Gold, Crude Oil Prices on Pre-Positioning for FOMC

Souring sentiment may reflect pre-positioning ahead of next week’s potent news-flow – notably, the FOMC rate decision – with traders using a lull in high-profile event risk to book profits & move toward a more neutral posture. A broadly corrective tone may also bode ill for gold prices after the metal hit the highest level in three weeks. Crude oil prices & the S&P 500 too have declined.

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