Commodity Trade Mantra

Posts Tagged ‘Oil Prices’

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.

Why Gold Prices Could Bottom "On or Close to", After Fed’s Rate Hike

The Fed rate hike could mark an intermediate bottom in gold prices. We could see a knee-jerk move lower on a Fed rate hike, followed by a sharp move higher marking a gold bottom on the CPI numbers. And in the background we have naturally rising interest rates, which, if they continue, will make servicing what is nearly a $20 trillion debt harder and harder.

Strong Buying Continues To Fuel The Oil Price Rally

While it is too soon for the latest CFTC data to reflect the market’s response to the OPEC decision, the forward curve is giving us a good indication of what has happened. Short positions by speculators have been closed out amid the post-OPEC meeting euphoria, while oil producers have snapped up short positions along the forward curve, hedging future oil production over the coming years.

Gold Prices Bounce from Key Support - Bull Market Intact

Gold could see a better tone this week assuming that the dollar takes a bit of a breather from its upward advance and if U.S. equity markets pause after several weeks of heady gains. Despite on a short-term sell signal, the gold sector remains firmly on a long-term buy signal. Long-term signals can last for months and years and are more suitable for investors holding for long term.

Inflation - Difficult to Move, But Once Moving, Hard to Control

Three key measures of inflation have recently lurched across the Fed’s threshold of 2%. The recent pickup in gas prices is set to have an even sharper upward impact on the consumer price inflation basket. Inflation can really spin out of control very quickly. If it happens, it would happen very quickly. Inflation is like a supertanker: Hard to get moving. But once moving, hard to stop.

Rising Inflation & Sagging Confidence in Central Banks will Catapult Gold Prices Higher

Inflation may surprise to the upside. Consumer prices are set to rise as oil rebounds, while low or negative interest rates and bond buying by central banks have failed to boost economies. Interest rate hikes are incredibly positive for gold prices, because of the existence of the huge QE “money ball” that sits at the Fed & other central banks. Gold prices need another rate hike from Janet to move higher.

Oil Prices Rocked By OPEC Reports - But Can’t Stay Low For Much Longer

Due to a very high degree of uncertainty surrounding OPEC intentions, there is likely to be further volatility in US trading on Friday and the potential for significant price gaps at the market open next week. Overall dollar trends will continue to have a significant impact on underlying crude oil prices. Remember, oil prices will not languish at the current depressed levels forever.

Global Oil could be a True Body Blow to the US Dollar

What happens when more parties reject the Brent quote as an accurate daily price quote for oil? President Putin has stated many times that he wants to move away from the US dollar in trade. Global oil buyers would soon fall into line & begin paying that basket price. If the Brent oil quote falls apart in Europe — replaced by Urals blend quote — It would be a true body blow to the US dollar.

Huge Draw in Crude Oil Stocks Prove Ineffective, Will OPEC Meeting Help Oil Prices?

API reports a 1.4-million-build in US crude oil inventory over last week, much lower than expectations of a 4-million-barrel build, but bursting the bubble (biggest draw in a century) created the week before. Mixed signals from the OPEC nations and a lack of commitment from the larger oil producers indicate that the Algiers meeting could be headed the Doha way.

Sticky Price Inflation at Highest Level since 2009 - What it Means for Gold

The common man has little idea of what the price of gold is because he does not fear inflation. Right now, gold is only an investment hedge for institutional players & still trending up since December. If inflation starts to become obvious though & the sticky CPI suggests that this might soon happen, any upside revaluation in the price of gold is likely to be quick & intense.

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.

The US Dollar Strength Takes Its Toll On Oil Prices Again

As we exit summer driving season, and as refinery maintenance ramps up, demand eases, and typically… oil prices come under pressure. The return of oversupply fears are clobbering the crude oil complex lower, with gasoline leading the charge. With Nonfarm Friday on deck, bringing the prospect of a stronger dollar, here are five things to consider in oil markets today.

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.

OPEC Rumours Continue To Pull Oil Prices Higher

Oil prices hit one a month high on Monday thanks to speculation about potential producer curbs on supply and new data from market intelligence firm Genscape showing an estimated draw of more than 350,000 barrels per day at the Cushing OK delivery point. Although oil prices reacted stoically on last week’s rig count report, the amount of rigs added to the Permian basin is starting to add up.

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.

Morgan Stanley Expects Oil Prices To Hit $35 In A Few Weeks

Morgan Stanley’s Adam Longson has been one of the most bearish sellside analysts on oil, and overnight he confirmed he isn’t going to change his opinion any time soon. Greater headwinds lay ahead, especially for crude oil. US crude oil stats are likely to trend bearish over the coming months. Putting a number to his call: oil prices will slide to $35 in the next 1-3 months.

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