Commodity Trade Mantra

All posts under ‘Crude Oil Trading’

Oil Markets Increasingly Bullish As Long Positions Surge

The latest CFTC data show that short positions in WTI crude oil shrank again last week, dropping by 20% to the lowest level since June. In combination with a 2.4%t increase in long positions, net-longs increased by 17% – to the highest level since last June. Once again, this increase shows ‘much less bearish’ positioning, as opposed to ‘much more bullish’.

Have Oil Prices & Markets Grown Numb To Supply Disruptions?

The idea that there is a major glut in oil supplies has been overstated. Surpluses in the past have been higher & oil prices did not collapse. Oil price discovery is basically made in the highly leveraged oil futures market & speculators exaggerate oil price movements on the upside as well as the downside. Just as fast prices fell because of them in the futures market, they could drive prices up.

Oil Jumps After Latest Output Freeze Meeting "News"

Oil producers including Gulf OPEC members support holding a meeting next month to discuss a deal to freeze output even without Iran. Given Iran’s determination to add an additional 1 million b/d of supply to an already glutted oil market, it’s still difficult to understand how “let’s freeze things at a record rate” is a viable way to permanently alleviate downside pressure.

Here Is Why Crude Oil Prices May Not Move Higher

The investigation I have presented here about the possible similarities between the present increase in oil prices and the false price rally of March-June 2015 reinforces my sense that a return to higher oil prices is not at all straight-forward. Oil markets are a leading indicator for the broader economy because the economy runs mostly on energy and not so much on money.

IEA Sees “Light At The End Of The Tunnel” For Oil Markets

The IEA found a variety of reasons to think that the oil markets are turning a corner, including: supply outages in Iraq, Nigeria, and the UAE; the declines in non-OPEC supply; tepid but steady demand; recent weaknesses in the U.S. dollar; and the potential that OPEC takes stronger action to boost prices, although any meaningful steps to reduce supply remain unlikely.

Solar Power Is About To Get Much Cheaper

Solar power is not going away and those who think it is are fooling themselves. The concept of cheap solar panels is particularly attractive when one considers the possibility of combining Solar City’s plant with batteries like that of Tesla or Orison. If Solar City can combine cheap solar panels and installation with reliable and cost effective battery storage, it could be a true game changer.

Oil Bust Spreads: Credit Downgraded Of 11 Texas Towns

The Moody’s ratings have little forward-looking value, and are more a reflection of what the market already knows—that times are tough, and lending in this industry—or within the geographical boundaries of oil-dependent locations—comes at a risk. Moody’s will consider the oil downturn and the ability of each government to adapt in this difficult environment.

Why Saudi Arabia Has No Intention To End The Oil Glut

As the shale oil revolution had sustained momentum at oil prices near $100, Saudi Arabia began the second most rapid rig count expansion in its history starting in late 2013. While Saudi Arabia & OPEC have talked intermittently about increasing demand & decreasing supply, their actions have not always comported with the distracting, laissez-faire attitude suggested by their commentary.

Oil Fundamentals Could Cause Oil Prices To Fall, Fast

I hope that oil prices increase but cannot find any substantive reason why they should do anything but fall. As market balance reality re-emerges in investor consciousness and the false euphoria of a production freeze recedes, prices should correct to around $30. A little bad economic or political news could send oil prices much lower.

The Oil Price Ceiling Has Been Set: "Above $40 And We Start Pumping Again"

The cure for low oil prices is low oil prices & as more shale companies halt production, the 3 mmb/d oversupplied oil market will slowly return to equilibrium. The oil price war is about to enter its far more vicious, and far more lethal phase, and while it is unclear who ultimately wins, whether it is Shale or the Saudis, the loser is clear: anyone who bought into bets of an imminent oil bounce.

Victory For Saudi Arabia, North Dakota's Largest Oil Producer Suspends All Fracking

Reuters reports, that North Dakota’s largest producer, Whiting Petroleum, would suspend all fracking, and that Continental Resources has effectively done the same after reporting that it no longer has any fracking crews working in the Bakken shale. It was also a confirmation that the Saudi plan to put high-cost producers on ice is working, if only temporarily.

Why OPEC Oil Production Freeze Could Pave The Way For Actual Cuts

The purpose of the Doha agreement is to put a floor under crude oil prices—and as a first step in raising prices in the future. The freeze is a starting point, which, over time could lead to production cuts as major non-North American producers gain confidence in the intentions of their fellow producers and therefore bring forward balancing the global crude oil market.

Oil Price Volatility Off The Charts - What Explains The Incredible Volatility?

Oil prices are at their lowest levels in more than a decade, but the daily up & down moves are leaving investors with whip lash. What explains the volatility? What is new is the instability in the financial markets. China’s slowing growth; Emerging market currencies crashed; Fed rate hikes may or may not be forthcoming, etc. This all adds up to a period of incredible volatility.

UAE Offers India Free Oil To Ease Storage Woes

India is building a massive underground storage facility system that will be able to take on 5.33 million tons of crude oil as a bulwark against global price shocks and supply disruptions. The UAE’s Abu Dhabi National Oil Company has agreed to store crude oil in India’s maiden strategic storage facility, sweetening the deal by saying India could take two-thirds of the oil for free.

The Real Reason Behind Crazy Volatility In Crude Oil This Week

The volatility in crude oil trading has been incredible to say the least, and has reached the highest levels since Lehman’s systemic crisis in 2008. Intraday swings of 5-10% are now de rigeur with OPEC and geopolitical headlines jockeying for narrative amid collapsing fundamentals.. but there is another, much bigger driver of this sudden chaos.

Crude Oil Crash Of 2016 Has The Big Banks Running Scared

During the boom years, big banks gave out billions of dollars in loans to fund exceedingly expensive drilling projects all over the world. Now those firms are dropping like flies & the big banks could potentially be facing catastrophic losses. Since the start of 2015, 42 US oil companies have filed for bankruptcy. The longer the price of oil stays low, the worse the carnage will get.

Crude Oil Bust Could End The US Dollar Domination

With Bretton Woods’collapse in 1971, oil became its new saviour and kingmaker as the U.S. dollar became the prime currency for crude oil transactions. The current strength of the U.S. dollar shouldn’t be taken for granted. Although a viable alternative to the U.S. dollar has yet to be found, the petro-dollar is vulnerable in the long-term, and perhaps even in the medium-term.

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