Commodity Trade Mantra

Posts Tagged ‘Shale Production’

The Current Rally In Oil Prices Is Reaching Its Limits

Oil prices have climbed by about 50% from their February lows, topping $40 per barrel. But now, with oil traders taking the most bullish positions in months while the fundamentals still have not shifted in a correspondingly significant fashion, traders have set up the conditions where oil prices could snap back to the downside.

It's Correct that Oil Prices Will Rise — But Here is the Real Reason Why

Oil demand increased globally in 2015 to as high as 2.0 million barrels per day. EIA reports shale production to be declining by more than 100,000 barrels per day. Don’t be misled by the news about China imploding. To this point, it has not impacted oil demand, with imports hitting an all-time record of 7.8 million barrels per day in December.

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.

This Is What Will Help Oil Prices To Stabilize

Oil Inventories will remain high in some parts of the world and will be drawn down in others. But overall, rising global oil demand and shrinking U.S. oil production (and other areas as well) will begin to eat away at inventory. It just requires some patience. There will be some foreshadowing in oil prices here.

Crude Crash Set To Continue After Arab Emirates Hint $40 Oil Coming Next

“We are not going to change our minds because the crude prices went to $60 or to $40,” Mazrouei said at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.

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