Commodity Trade Mantra

All posts under ‘Crude Oil Trading’

Here's Why Crude Oil Prices Could Keep Climbing

Stocks took a beating yesterday. But crude oil continues to push to new 2016 highs, topping $48 for the first time in nearly five months. No one is cheering as it sneaks higher week after week. Where were these oil bears when crude was trading north of $100 in early 2014? And more importantly—where are the crude oil bulls right now as this disbelief rally continues?

Falling Chinese Demand Could Intensify The Crude Oil War

For exporters of commodities & industrial materials, the shrinking of the world’s largest source of demand is bad news. Nowhere is this more evident than in the Chinese energy sector, as crude oil accounts for 6% of total imports. China’s economic slowdown, combined with a global push towards renewable energy, could threaten the already fragile levels of its crude oil demand.

Iran Offers Discounts On Asian Crude Oil, Hits Saudi Where It Hurts Most

Iran has introduced a discount on the June contract for its heavy crude oil going to Asia, just after Saudi Arabia announced a price increase for its own June contract for the continent. With the discount, Iranian crude oil will be noticeably cheaper for Asian clients than both Saudi and Iraqi crude. Saudi Arabia and Iran are playing a game of barrels & Asia is the ultimate prize.

Crude Oil Prices Spike After EIA Reports Surprise Draw

The EIA sees non-OPEC production dropping 0.7 million bpd this year, while it sees OPEC production up 0.9 million bpd this year & up an additional 0.7 million bpd in 2017 (h/t Iran). It now pegs crude oil demand growth at 1.4 million bpd for this year (up 0.3 million bpd from last month), with the increase in large part due to higher Chinese and Indian demand.

Here's What Saudi Arabia’s New Oil Policy Will Look Like

Ali al-Naimi’s termination & Prince Mohammed’s official ascent to the top of the Saudi oil chain of command are likely bearish in the short term, as Saudi Arabia reverts to its 2014 strategy of pushing oil prices low enough to put marginal producers out of business. What does this mean for oil, since Khalid Al-Falih is likely to follow Naimi’s policy of safeguarding Saudi Arabia’s market share?

Do Not Underestimate The Power Of This Year's Rally In Oil Prices

Oil futures are currently around $49, v/s $65 seen in the Q2 of 2015. If the futures market doesn’t expect the oil prices to rise, producers can’t lock in a profit like they might have at $65. If you can’t lock in a profit, you can’t produce as much & thus supply should theoretically fall. This has led us to say the futures price is far more important than the current or spot price.

Can Crude Oil Prices Continue To Rally Like This?

Oil prices have bounced around a bit after last week but have held more or less in the range of $43 per barrel for WTI and $45 for Brent. The price gains over the past few weeks come as the fundamentals have improved. Oil production is expected to continue to fall through 2017 as too few new wells come online to replace rapidly falling shale output.

Has the Oil Price Rally Gone Too Far? Time for a Correction or Yet More to Rise?

As usual, the oil markets are rife with confusion and uncertainty. Speculators could be overextending themselves – Or – realize that the rally has run out of steam & then decide to pocket their profits. The longer-term looks a little clearer on the back of rising demand and shrinking supply. The market will have to balance out; the only debate is over how quickly that happens.

Oil Prices Rise Despite Threat of Potential Supplies

Oil prices are expanding their rally despite the failure of the Doha meeting. Traders are now concentrating on the declining North American production. US producers have lost their potential of investing in growth opportunities amid a decline in crude oil prices from $120 to below $30 a barrel. Oil supplies from Canada, US & Latin America could decline by 700,000 barrels per day this year.

Doha Is Done, Saudi Prince Says - No Oil Deal Without Iran

In what appears to be a Doha party-pooping statement, Saudi deputy crown prince Mohammed bin Salman stated unequivocally that The Kingdom won’t restrain its oil production unless other producers, including Iran, agree to freeze output at a meeting this weekend in Doha. If there is no agreement, then expect a sharp oil market sell-off on Monday.

How to Play the End of the Biggest Oil Bear Market Ever

It’s been a long time since oil has had this much pep in its step. And it’s lifting the rest of the market higher too. Yesterday’s close above its 200-day moving average is crude oil’s first since July 2014. Is the longest downtrend for oil in history is finally through? It’s possible. The road higher will be messy and difficult. But some quality trades should materialize soon enough.

Why Oil Prices Will Rise And Many Will Be Caught By Surprise

Oil industry investment is far below levels required just to replace production. The only thing that will change the vector of these declines is lots of spending, and the only thing will spur lots more spending is higher oil prices. Just like all the oil bulls had to be run out during the declining price stage, all the price bears will be run out when fundamentals hit them over the head.

Why the Fall in Oil Prices is a Problem for Everyone

The increase of oil prices during the ‘70s caused inflation and recession in Europe & the US while oil producers were building a trade surplus & currency reserves. On the other end, in the late ‘80s & all of the ‘90s, the collapse of commodity prices contributed to a long period of economic growth in industrialized countries & caused serious problems for some oil producers.

What's Really Driving the Rally in Crude Oil Prices?

Does the huge rally in crude oil mean it’s time for us to bet on higher prices? Or is this rally doomed to fizzle? As crude oil has soared over 50% since Feb. 11, the number of bets on increased prices has barely budged. It’s been a hell of a bottom-bouncer so far. But we need to see more evidence before we’re ready to declare this new crude oil rally alive & well.

Why We Could See An Oil Price Shock In 2016

Crude oil storage levels have once again increased. The Rystad Energy figures show that the supply-demand balance could quickly swing back in the other direction as upstream investment has screeched to a halt. The oil markets have always suffered from booms and busts, and this is just more of the same. The current bust is sowing the seeds of the next boom.

China And India Rewrite The Rules Of The Oil And Gas Game

Asian oil markets are in a tremendous period of flux. Both China and India are using the drop in oil prices and the existing oil gut to their advantage. New partnerships are being formed and steps are being taken, which undermine the erstwhile major players. Each crisis brings about a change, and the current one is shifting the power from the suppliers to the consumers.

Why North-American Oil Is Positioned To Win In The Long-Run

Not only are North American oil producers displacing non-North American imports from the U.S. market, U.S. producers are competing for share in foreign crude oil and petroleum product import markets. Lifting the ban on crude oil exports at the end of 2015 will increase U.S. exports. The “growing volumes of exports” from the U.S. are now “spooking the markets.”

Oil Prices Drop After IEA Warns Production Freeze Is "Meaningless"

A deal among some OPEC producers and Russia to freeze production is perhaps “meaningless” as Saudi Arabia is the only country with the ability to increase output, a senior executive from the International Energy Agency (IEA) said. It’s more some kind of gesture which perhaps is aimed … to build confidence that there will be stability in oil prices.

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