Commodity Trade Mantra

Posts Tagged ‘Oil Market’

YES - This Rally in Oil Prices has a Long Way to go Ahead

Can we finally call the crisis in oil prices officially over? Okay, maybe not completely over, or even close to almost over, but is sure was nice for a while to taste the sweet nectar of oil prices over $50, no matter how fleeting that might be. So what happened? Well, among a few things, we see the market over the next six months going well above $60 for a simple reason … surprisingly good demand.

Global Oil Market Equation looks Bullish for Oil Prices

The oil market appears to be handling the outages without too much trouble, certainly aided by the fact that inventories have been “comfortable.” That doesn’t mean that there aren’t significant atypical market conditions. IEA just published one of its more bullish oil market reports in quite a while. Supply fell, demand is at its strongest in two years & inventories are drawing down at a good pace.

Oil Market Tightening Puts a Firm Floor Beneath Oil Prices

The shift into backwardation in the futures market suggests that the supply balance is heading in the right direction, and it probably puts a floor beneath oil prices for the time being. EIA reported a hefty draw in U.S. commercial oil inventories but oil prices did not rally on the hefty draw, because the EIA also reported that U.S. crude oil production rose last week.

Oil Price Decline may Reverse Trajectory from July - Here's Why

I believe that this most recent drop in oil prices is not being caused by the actual fundamentals of supply and demand. Those fundamentals are actually improving the bullish case for oil — slowly, but steadily. Starting in July, we should start to see a more bullish (and accurate) view of the global oil supply-and-demand fundamentals hit the mainstream.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

India's Soaring Oil Demand Provides Floor Beneath Oil Prices

India’s oil demand grew by 400,000 barrels per day in the first quarter – the fastest in the world, accounting for about 30% of the total global increase. Crude oil imports have jumped by 12% so far this year from 2015 levels. India’s oil demand could rise to 10 mb/d, a more than 6 mb/d increase from today’s levels, which will also be the largest source of growth on the planet.

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.

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