Commodity Trade Mantra

All posts under ‘Crude Oil Trading’

With Several Opposing Factors, can we expect Higher Oil Prices anytime soon?

One factor that could prevent oil prices from falling further is the possibility that prices floundering in the mid-$40s actually puts a lid on shale production. If U.S. shale underperforms over the next year, the OPEC deal could succeed in balancing the market. But if U.S. shale continues to rise & OPEC fails to extend its deal beyond the first quarter of 2018, oil prices could fall to $30 per barrel.

Oil Prices are most Definitely Heading to the Upper US$30s

Oil is in a downtrend and risks trending into the $30’s. The future might be bright for oil prices but the present is not. Any immediate price gain would be “wishful thinking”. Oil producers are no longer hedging their production because oil prices have fallen too much. US shale continues to grow production & Libya is adding large volumes of supply back onto the market at the worst possible time.

Is There a Relationship Between the Malaysian Ringgit & Crude Oil Prices?

The fortunes of the Malaysian Ringgit (MYR) have reversed in line with crude oil prices since the beginning of 2017, as OPEC’s production caps continue to drive incremental hikes. This highlights the direct correlation between crude oil prices & the Malaysian currency, with the former dictating the performance of the latter & driving clearly visible trends in growth & depreciation.

China-Saudi deal "Yuan for Oil," Another step to the Grave for the Dollar

As China imports more & more oil, the idea of paying for oil in yuan instead of the US dollar becomes more critical. China is working on a deal to pay for Saudi oil using Chinese yuan. This effort poses a direct threat to the security of the dollar. If this China-Saudi deal happens — yuan for oil — it’s another step closer to the grave for the petrodollar, which has dominated global finance since 1974.

Is This Oil Price Rally for Real or Just a Dead Cat Bounce?

What a difference a week makes. Oil prices are more than 9% above last Friday’s capitulation low. The bounce has legs in the short-term but it doesn’t alter the long-term bearish story. U.S. oil inventories just had their largest drop of 2017 & a fifth consecutive weekly decline. OPEC is expected to extend production cuts on May 25. Goldman reiterated its bullish call for an imminent supply deficit.

How Will Brexit Impact the UK's Oil and Gas Markets?

The level of concern surrounding Brexit & the UK’s energy market is slowly rising. The situation has been exacerbated by the details of a North Sea industry report, which suggest that Britain’s oil and gas trades bill could almost double to £1.1 billion per annum in a worse case Brexit scenario. This remains one of many small elements that underline the danger posed by Brexit, yet strike a huge blow.

Futures Market Trend Indicates The Return Of Bearishness In Oil Markets

Speculative movements in the futures market don’t dictate everything, but they are good indicators of market sentiment. Net-long positions in crude futures reduced for a third week in a row. Also the fact that the oil glut persists despite what should be bullish trends – high OPEC compliance, growing demand, and the initial signs of falling inventories – suggests that lower oil prices could be forthcoming.

Can An OPEC Production Cut Extension Push Oil Prices To $60?

Barring another bout of “geopolitical risk,” it seems only significant changes in oil fundamentals will deliver the boost OPEC needs. If OPEC succeeds in lengthening, or even deepening cuts & pulls Russia on board, there’s a chance that the IEA & Goldman’s prediction of a stabilizing oil market & a closer balance between supply & demand by the late-summer 2017 could come true.

OPEC on the Brink of Failure - The End to the Cartel may be Near

OPEC, which has far exceeded the average life of cartels, is on the brink of failure. Though cracks have been developing in the cartel since the start of the current oil crisis, it has managed to stay together so far. The success of the current OPEC deal for production cuts will decide its future as a cartel. If the OPEC members don’t act together, chances are that the cartel will come to an end very soon.

The Next War In Oil Prices - Saudi Arabia Vs. Russia

Europe, a very stable and surprisingly growing crude oil market, is now the stage for a possible oil price war scenario. Riyadh’s decision to change its European price setting is, however, a clear signal that there is a red line for the Oil Kingdom. No more market share will be lost without being confronted by a more aggressive and powerful Aramco establishment.

Here's What Gold Can Tell You About Crude Oil Prices

The WTI crude oil to gold ratio is one of the oldest indicators in the market. Currently, the ratio, which bottomed at about 21 at the end of 2016, has risen to just over 26 & has now clearly broken the trend line, that peaked in early 2016 at just above 45. So 45 barrels per ounce reflects very cheap oil or very expensive gold while 21 reflects very expensive oil or very cheap gold.

These Fundamentals Point To Higher Oil Prices

Investors overlooked the bearish news of crude stocks that still remain at all-time highs, because of another more interesting development. Gasoline stocks have declined rather significantly in recent weeks, at a much faster rate than at this point in the 2016 season as demand is rising. That, along with a few more reasons, makes one surely feel optimistic about oil prices.

Don’t Worry about Oil Prices, Here’s How You Can Profit

I’m keeping a close eye on the oil market, and on the moves that Saudi Arabia is making to manipulate oil prices. Over time, Saudi Arabia will be unable to affect oil prices as much as they have been able to in the past. Prices for oil trade around $50 a barrel and recently set lows for the year, but I am actually more bullish on oil prices than was ever before. Here’s why.

A Massive Spike In Crude Oil Prices Seems Inevitable - IEA

3 years of drastic cuts to upstream spending due to the meltdown in oil prices could result in a shortage of oil supply in a few years, according to the IEA. Global oil and gas investment dropped by a quarter in 2015 & by an additional 26% last year. The pipeline of new projects is too small, while oil demand continues to grow, eventually overtaking supply & leading to a sharp spike in oil prices.

Will $60 Level be a Ceiling For Crude Oil Prices?

Oil prices faltered on Tuesday on slow but steady gains in U.S. output. The failure to break out of a narrow trading range on the upside has exposed crude oil prices to some losses. Having failed on a couple of occasions to break higher it is only natural to see it correct lower. As per a Reuters survey, analysts see oil prices staying below $60 even if OPEC extended its cuts through the end of the year.

Iran’s Oil Industry "Neither Shaken Nor Stirred" By New Sanctions

It does not seem that Trump’s new sanctions can do much to deter Iran. Political posturing in the form of targeted sanctions may cause anti-American sentiment in the country to flare-up as Iranian politicians paint Trump as the ultimate boogeyman, however, the scope of the unilateral sanctions will prevent any serious consequences to Iran’s oil sector moving forward.

Oil Markets On A Knife Edge Despite 91% OPEC Compliance

The 10 OPEC countries that promised to reduce their production as part of the Nov. 30 deal have achieved a 91% compliance rate with the targeted cuts. Oil prices enjoyed a huge surge following the successful outcome of the OPEC deal at the end of 2016, but have stagnated since. If OPEC compliance starts to drop, it will probably do so with a backdrop of rising U.S. oil production.

The Oil War Is Only Just Getting Started

OPEC’s decision to deliberately cut oil supply and abandon the strategy of pursuing market share at all costs is currently benefiting the cartel’s competitor, U.S. shale. Five or ten years from now, a possible market share ‘oil war’ would take place on a totally different battleground, and some regiments or battalions may lack essential armory to wage such war.

Has Saudi Arabia Underestimated the Shale Oil Resilience yet Again?

Saudi Arabia seems unfazed from a possible rebound in U.S. shale. They still believe that current oil prices at around $50 are still not enough to herald a significant rebound of US shale production. Saudi Arabia’s oilmen may not lose sleep over U.S. shale resurgence, but it looks like they may have underestimated the shale resilience yet again, as was their idea of flooding the market with oil in 2014.

Solar Demand 'Key' in 2017 for Silver Prices

Analysts GFMS – a division of Thomson Reuters, say that the solar energy sector bought 11% more silver last year than 2015, the only major use to grow on their latest estimates for the Washington-based Silver Institute of miners, refiners, retailers & industrial users. But research into substitution continues & “you’re [now] seeing some investment in replacing silver with copper.

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