Commodity Trade Mantra

Posts Tagged ‘Price of Crude Oil’

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.

Price Takers and Price Makers in World Commodities

Over 99.9% of all world consumers and producers are price takers and not price setters, & yet their total consumption / production has little to do with how prices of many world commodities are determined. How can this be? There is a great force (excessive speculative positioning) that’s setting the price & rendering the law of supply and demand as almost non-existent.

Oil Markets Could Be In For A Shock From China Soon

The oil market dynamics are complex and fluid. US shale supply is hugely important for oil prices, but one of the more underreported factors influencing the price of oil is the pace of demand growth coming from China. Any insight into this factor can provide clarity on the trajectory of oil prices.

Making Sense of the US Oil Story

If US oil producers have the option of selling their crude oil abroad, perhaps they can get a higher price for it. If US oil producers can get higher prices for their oil, this may very well filter through to higher oil prices for US consumers, and less oil consumption by US consumers, but this is not the concern of oil companies.

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