Commodity Trade Mantra

Posts Tagged ‘Oil Storage’

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.

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 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.

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.

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