Commodity Trade Mantra

Posts Tagged ‘Crude Prices’

Why A Commodity Trading Legend is Buying Gold and Farmland Ahead of the Next Crisis

“Gold is a Tier 1. It’s a level one asset….” When a commodity trading guru like Dwight Anderson, founder of the iconic Ospraie Management, has something to say on the market outlook, people tend to listen, especially when he’s consigning the last great commodity bull run to the dustbin of history and buying gold and farmland for the next crisis.

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.

This Month Could Make Or Break The Oil Markets

October could be a crucial month for struggling drillers. With drillers undergoing credit redeterminations, October could see a wave of debt restructuring and cuts to credit lines, potentially forcing deeper cuts in the shale patch. More will be revealed about the trajectory of the U.S. shale industry – and by extension, the trajectory of oil prices – in the next few weeks.

Why So Much Volatility In Oil Prices? Blame The Speculators

Much of the gain was related to speculative movements & decisions of oil traders moving barrels of oil on paper. Speculators had taken a near-record level of short positions on oil, predicting oil prices would continue to fall. They did fall, for about 2 months. However, with such a large preponderance of short positions, the timing was right for a correction.

Is The Oil Price Crash A Result Of Excess Supply Or Plunging Demand?

One of the most vocal discussions in the past year has been whether the collapse, subsequent rebound, and recent relapse in the oil price due to surging supply as Saudi Arabia pumps out month after month of record production to bankrupt as many shale companies before its reserves are depleted, or tumbling demand as a result of a global economic slowdown.

Yesterday, less than a year after Saudi Arabia launched its attack on “marginal” US Shale producers which has sent the price of WTI oil crashing by more than 50% from $100 before recouping a substantial portion of the losses and last trading around $60, the Kingdom gloated in declaring victory over US Shale.

US May Run Out Of Oil Storage Space As Soon As June

Crude oil inventory data shows that total utilization of crude oil storage capacity in the US stands at approximately 60%, compared with 48% at the same time last year. Oil prices would need to fall even farther for the the floating storage play to be economically viable as the cost of remaining storage goes through the roof.

Why Citi Thinks Oil Is Going To $20

Citi warns the oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range (perhaps as low as the $20 range for a while) – after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws.

When "Rumor Becomes Reality" - This Is The Devastation Across The US Oil Patch

Trouble has been looming over the oil patch since crude prices began falling last summer, from over $100 a barrel to under $50 today. But only now are the long-feared effects of a bust starting to ripple through the complex energy ecosystem. Cutbacks aren’t yet reflected in broad data on employment, home sales or tax collections.

Crude Crash Set To Continue After Arab Emirates Hint $40 Oil Coming Next

“We are not going to change our minds because the crude prices went to $60 or to $40,” Mazrouei said at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.

Petrodollar Death Means A Liquidity And Oil-Exporting Crisis On Deck

The Petrodollar, long serving as the US leverage to encourage & facilitate USD recycling in US-denominated assets by the Oil exporting nations & thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance. As a consequence of a drop in oil prices, global market liquidity will fall.

Brent Plunge To $60 If OPEC Fails To Cut, "Profit Recession" To Follow

If OPEC fails to agree a cut, prices will drop “further and quite quickly”, with U.S. crude oil possibly sliding to $60. If Brent does indeed tumble to $60, what happens? Then the most likely next outcome is a Profit recession, which while left unsaid, will almost certainly assure a full-blown, economic one as well.

3 Of 10 Largest Economies Are Already In Recession – Is US Next?

Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy. Japan’s economy fell into recession in Q3, joining Brazil & Italy. Economic sanctions have hit Russia pretty hard. There are already signs that the U.S. economy is starting to slow down too.

How The Petrodollar Quietly Died, And Nobody Noticed

Basically, the Petrodollar, long serving as the US leverage to encourage and facilitate US Dollar recycling, and a steady reinvestment in US-denominated assets by the Oil exporting nations, and thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance.

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