Commodity Trade Mantra

Posts Tagged ‘Royal Dutch Shell’

Will Less Supply in the Very Near Future Mean Higher Oil Prices?

The strategy, promoted by Saudi Oil Minister was meant to keep oil prices low temporarily & starve many non-OPEC oil producers of profits & restore the cartel’s global market share. The primary target of the OPEC plan was oil production from shale in the United States, which relies on hydraulic fracturing that can’t make money unless oil sells for at least $60 per barrel.

Bullish Bets On Oil Prices Up But Market Stalemate Remains

Bullish bets on crude oil are increasing after the recent snap-back in prices from retesting the lows earlier in the year. We find ourselves in a highly volatile day-to-day price environment, as oil prices are unwilling to push too much higher given the backdrop of oversupply, but are unwilling to push too much lower given an ongoing narrowing of the imbalance amid strong demand.

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.

Job Cuts Surge As Outlook On Oil Prices Remains Sober

It may be too early to determine whether oil prices, which began falling a year ago, were now forcing the energy industry to go beyond cutting fat & is now gouging into the very sinew of its operations, but it’s clear that they’re convinced that other economies simply weren’t enough to keep themselves afloat. The job losses probably should come as no surprise.

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