Commodity Trade Mantra

Posts Tagged ‘US Shale Oil’

This is not 2008 – At least not for Gold Prices

Both, low energy prices & higher real interest rates are already reflected in the current gold prices. As longer-dated oil prices cannot remain below industry costs indefinitely, nor real interest rates rise much higher given a data dependent FED, this creates an asymmetry to gold prices, regardless of broader market normalization – or capitulation.

This Is Why $20 Oil Price Is A Possibility

I believe that another plunge in the oil price is required to thrust a dagger through the heart of US shale drillers and the banks that have supported them. Low oil price will at some point result in the situation reversing & prices will turn very quickly. But before that can happen, production momentum needs to be switched off & I dare say that requires a sharply lower oil price.

The Irony of a Debt-Fueled Oil Boom

The cash has already been drilled into the ground. Now it’s just a matter of getting the oil and gas out to service the debt. The more the price drops, the harder they have to try to increase production. This is the irony of a debt-fueled oil boom that turned into an oil bust: producers cannot back off regardless of how low the oil price may be.

What America Does Not Understand About Russia & Oil

While successful this time around the Russian’s via Putin are more than able to cope with an oil rout for the near future. Already the devaluation of the Russian Rubble means that oil revenues will in fact be more in Rubles than last year since the devaluation is currently wider than the correction of the oil price itself.

Brent Plunge To $60 If OPEC Fails To Cut, "Profit Recession" To Follow

If OPEC fails to agree a cut, prices will drop “further and quite quickly”, with U.S. crude oil possibly sliding to $60. If Brent does indeed tumble to $60, what happens? Then the most likely next outcome is a Profit recession, which while left unsaid, will almost certainly assure a full-blown, economic one as well.

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