Crude Oil

[Mick100]

first time i'v seen commercials net long oil since I started keeping records
Obviously the commercials are peak oil believers

I'v noticed an increasing number of commentators (mainly ammerican) calling this the top in oil. The americans reason that a reccession in the US will lower demand leading to a lower price - this is what has happened in past reccessions in the US (a lower price of oil)

the non american point of veiw is that the incremental demand is coming from other parts of the world now (asia, russia, persian gulf states, south america) so a drop in demand from america no longer will lead to lower oil price but will make the american reccession far worse than usual - slow/no growth with rising prices equals stagflation
.

[Trent]

This podcast provides a good insight into futures trading in oil. Well worth a listen.

http://moniqueth3intern.wordpress.com/

[jonathan76]

Here's a news clip to support my theory that the recent oil will only be eaten up by the chinese cars rolling out of the production line

http://www.marketoracle.co.uk/Article5187.html

[lakedaemonian]

Here's a news clip to support my theory that the recent oil will only be eaten up by the chinese cars rolling out of the production line

http://www.marketoracle.co.uk/Article5187.html

Don't forget Indian Nano cars as well!

[Mick100]

have updated the COT report on previous page
Commercials now net long 4650 contracts
From my limited experience in analysing this data I'd say oil price is going higher - probably significantly higher (heard one ta guy mention 170 recently but he admitted that no one knows where the top will come in)
I should add that I am not neccessarily wishing for higher oil price for I think it will be devasting to other sectors of the economy other than oil/gas

[Mick100]

the americans are still looking for someone to blame for the high oil price.
In 2003 it was the war in iraq then it was nuclear threats from iran as well as other terrorist threats. Last year they hauled the big oil companies in front of congress and interorgated them. Now they are pointing the finger at speculators!

Below is a link to a CFTC reply to the accusation that speculators are the reason for the current oil price - pay attention to the last chart wich shows the net percentage of open interest (net percentage of long contracts) held by speculators - this percentage peaked at 6% last august and has been declining since then.

http://www.cftc.gov/stellent/groups/public/@newsroom/documents/file/cftcfactsheet062308.pdf
,

[Mick100]

[quote=Mick100;208018][quote=Mick100;203502][quote=Mick100;202234][quote=Mick100;189896][quote=Mick100;188159][quote=Mick100;182880][quote=Mick100;179432][quote=Mick100;177108][quote=Mick100;175583][quote=Mick100;173455][quote=Mick100;172436][quote=Mick100;171491][quote=Mick100;170570][quote=Mick100;169708][quote=Mick100;167752][quote=Mick100;166946]Commercial (hedgers) net shorts positions

price open interest
7/08/07 net short 117500 71.50
14/08/07 net short 85700 72.00
21/08/07 net short 42600 71.00
28/08/07 net short 25000 74.00
4/09/07 net short 34500 77.00
11/09/07 net short 36000 77.50
18/09/07 net short 44500 81.00
25/09/07 net short 45300 79.50
2/10/07 net short 59500 80.00
9/10/07 net short 66000 80.26
16/10/07 net short 78000 87.61
23/10/07 net short 60000 85.27 1,408,000
30/10/07 net short 77400 90.38 1,448,000
06/11/07 net short 84000 96.70 1,513,000
13/11/07 net short 23000 91.17 1,445.000
20/11/07 net short 29000 95.00 1,398,000
27/11/07 net short 54000 94.42 1,494,400
04/12/07 net short 45000 88.32 1.382,500
11/12/07 net short 38000 90.02 1.381,000
18/12/07 netshort 29125 90,08 1,330,250
24/12/07 net short 51000 94.13 1,326.000
31/12/07 net short 85100 95.98 1,361 000
08/01/08 net short 100500 96.33 1,414,000
15/01/08 net short 91000 91.90 1.458.000
22/01/08 net short 38400 89.21 1,343,200
29/01/07 net short 31000 91.64 1,366,000
05/02/07 net short 25000 88.41 1,368,500
12/02/07 net short 36900 92.78 1,393,000
19/02/07 net short 54200 99.70 1,355.000
26/02/07 net short 85800 100.88 1,406.000
04/03/08 net short 102,800 99.52 1,451.000
11/03/07 net short 97230 108.75 1,484 400
18/03/08 net short 70200 108.50 1,407,400
25/03/08 net short 52100 101.22 1,362,700
01/04/08 net short 40100 100.98 1,382.000
08/04/08 net short 49500 108.50 1,412,300
15/04/08 net short 47600 113.79 1,441,400
22/04/08 net short 40500 118.07 1,337.100
29/04/08 net short 37300 115.63 1,365,500
06/05/08 net short 24100 121.84 1,422,400
13/05/08 net short 39300 123.10 1,477,000
20/05/08 net short 19400 128.98 1,356,700
27/05/08 net short 11170 128.85 1,338.900
03/06/08 net short 19660 124.31 1,355,600
10/06/08 net short 13930 131.31 1.418,750
17/06/08 net long 1900 134.01 1,335,200
24/06/08 net long 4650 137.00 1,306.100
01/07/08 net short 18450 140.97 1,294,500
08/07/08 net short 300 136.04 1,316,300

[Mick100]

commercials still acting very bullish on oil
One thing that got my attention is the drop in open interest. This is probably due to some traders getting nervous at what the regulators may do (with good reason IMO) In the week 1/07/08 a lot of long positions were closed out but open interest has picked up a bit this last week
If regulators increase margin requirements to 50% (as has been mentioned in the press) then alot of traders will be forced out of the market
Increased margin requirement should apply to both long and short so I don't know what impact it would have on the price

large speculators are net long 7060
small speculators are net short 6750

futures prices
aug 08 145.08
dec 08 146.35
dec 09 144.61
dec 10 142.44
dec 11 140.96
.

[Mick100]

[quote=Mick100;212019][quote=Mick100;208018][quote=Mick100;203502][quote=Mick100;202234][quote=Mick100;189896][quote=Mick100;188159][quote=Mick100;182880][quote=Mick100;179432][quote=Mick100;177108][quote=Mick100;175583][quote=Mick100;173455][quote=Mick100;172436][quote=Mick100;171491][quote=Mick100;170570][quote=Mick100;169708][quote=Mick100;167752][quote=Mick100;166946]Commercial (hedgers) net shorts positions

price open interest
7/08/07 net short 117500 71.50
14/08/07 net short 85700 72.00
21/08/07 net short 42600 71.00
28/08/07 net short 25000 74.00
4/09/07 net short 34500 77.00
11/09/07 net short 36000 77.50
18/09/07 net short 44500 81.00
25/09/07 net short 45300 79.50
2/10/07 net short 59500 80.00
9/10/07 net short 66000 80.26
16/10/07 net short 78000 87.61
23/10/07 net short 60000 85.27 1,408,000
30/10/07 net short 77400 90.38 1,448,000
06/11/07 net short 84000 96.70 1,513,000
13/11/07 net short 23000 91.17 1,445.000
20/11/07 net short 29000 95.00 1,398,000
27/11/07 net short 54000 94.42 1,494,400
04/12/07 net short 45000 88.32 1.382,500
11/12/07 net short 38000 90.02 1.381,000
18/12/07 netshort 29125 90,08 1,330,250
24/12/07 net short 51000 94.13 1,326.000
31/12/07 net short 85100 95.98 1,361 000
08/01/08 net short 100500 96.33 1,414,000
15/01/08 net short 91000 91.90 1.458.000
22/01/08 net short 38400 89.21 1,343,200
29/01/07 net short 31000 91.64 1,366,000
05/02/07 net short 25000 88.41 1,368,500
12/02/07 net short 36900 92.78 1,393,000
19/02/07 net short 54200 99.70 1,355.000
26/02/07 net short 85800 100.88 1,406.000
04/03/08 net short 102,800 99.52 1,451.000
11/03/07 net short 97230 108.75 1,484 400
18/03/08 net short 70200 108.50 1,407,400
25/03/08 net short 52100 101.22 1,362,700
01/04/08 net short 40100 100.98 1,382.000
08/04/08 net short 49500 108.50 1,412,300
15/04/08 net short 47600 113.79 1,441,400
22/04/08 net short 40500 118.07 1,337.100
29/04/08 net short 37300 115.63 1,365,500
06/05/08 net short 24100 121.84 1,422,400
13/05/08 net short 39300 123.10 1,477,000
20/05/08 net short 19400 128.98 1,356,700
27/05/08 net short 11170 128.85 1,338.900
03/06/08 net short 19660 124.31 1,355,600
10/06/08 net short 13930 131.31 1.418,750
17/06/08 net long 1900 134.01 1,335,200
24/06/08 net long 4650 137.00 1,306.100
01/07/08 net short 18450 140.97 1,294,500
08/07/08 net short 300 136.04 1,316,300
15/07/08 net short 16620 138.74
22/07/08 net long 14730 128.42
29/07/08 net long 12840 122.19 1,220,500
5/08/08 net long 14500 119.17
12/08/08 net long 19000 113.01
19/08/08 net short 2250 114.54
26/08/08 net short 11400 116.27 1,187,600
02/09/08 net short 2500 109.71
09/09/08 net long 2500 103.26 1,231,450

[Mick100]

not sure about the relevance of this particular data anymore
commercials are supposed to be only the hedgers who either produce oil or buy oil (refiners). From what I am reading in recent months it sounds as though some large investment banks/hedge funds are putting their trades through the commercial catagory. These guys are not hedgers - they are traders and their activity should be recorded in the large trader catagory not commercial catagory.

[Mick100]

I'm long crude oil since a couple of weeks ago
Hopefully we'll see a long slow grind back up tp $90, then I will review my position from there


PS, Macdunk, my car needs an oil change - could you send down a 4 ltr pack of oil

[Mick100]

31/03/09 net short 11450 49.66

commercials (hedgers) added 7430 longs and reduced shorts by 3840 for a reduction in net short position of 11270 contracts for the week

[airedale]

Right, Mick, if the POO overcomes the present resistance at $50....which is likely....then $60 and beyond is possible/probable [take your pick].

[Mick100]

yeah airdale - oil looking good on the chart

[Mick100]

bloody charts keep changing on me

[airedale]

Yes, Mick, nice triple bottom on the chart. A good surge in volume would confirm.

[Mick100]

31/03/09 net short 11450 49.66

14/04.09 net short 14100 52.50
21/04/09 net long 2585 48.55
28/04/09 net long 7100 49.92

[Mick100]

oil should push higher over the short-medium term
commercials (hedgers) increasing thier long positions

[Phaedrus]

Bloody charts keep changing on me
Ignore the minor fluctuations Mick - Oil has been in an uptrend all this year. There is even a confirmed trendline in place.

http://h1.ripway.com/78963/BRENT52.gif

[shasta]

Ignore the minor fluctuations Mick - Oil has been in an uptrend all this year. There is even a confirmed trendline in place.

http://h1.ripway.com/78963/BRENT52.gif

Phaedrus

Do you mind posting a chart of the Tapis price, perhaps against the $US?

Would appreciate any charts

[Mick100]

thanks Phaedrus

[Phaedrus]

Sorry Shasta, I only maintain data for Brent and West Texas oil.

I cut this from an Australian Treasury report :-

Of the more than 160 types of crude oil traded globally, the most widely cited oil benchmark is West Texas Intermediate (WTI) crude, although WTI accounts for less than 1% of global oil production. The price of crude is largely based on its chemical properties, in particular its sweetness (sulphur content) and weight (API gravity). A ‘sweet and light’ crude generally trades at a premium to a ‘heavy and sour’ crude, as the former is cheaper to process into petrol. Historically, WTI, which has an API gravity of 39.6 degrees and sulphur content of 0.2% making it a sweet and light crude has tended to trade at a premium to Brent and Dubai (see chart below) and at rough parity with Tapis, which is the lightest and sweetest of the main types of crude oil, with an API gravity of 45.5 degrees and sulphur content of 0.1%.
http://h1.ripway.com/78963/OIL52.gif

They all have price plots of very similar shape and could be expected to trigger practically identical technical signals.

Here then is a chart of West Texas oil in $US which should be the approximate equivalent of Tapis. I hope you find it of some assistance.
http://h1.ripway.com/78963/WESTEX52.gif

[macduffy]

Thanks, Phaedrus, for the reminder to keep our eyes on the trend and try to ignore the fluctuations.

http://www.theaustralian.news.com.au/business/story/0,28124,25417335-5005200,00.html

;)

[Mick100]

31/03/09 net short 11450 49.66

14/04.09 net short 14100 52.50
21/04/09 net long 2585 48.55
28/04/09 net long 7100 49.92
05/05/09 net long 4400 53.84

[Mick100]

31/03/09 net short 11450 49.66

14/04.09 net short 14100 52.50
21/04/09 net long 2585 48.55
28/04/09 net long 7100 49.92
05/05/09 net long 4400 53.84
12/05/09 net short 17150
19/05/09 net short 48000 60.10

[Corporate]

updated chart anyone....oil creeping higher. Haven't seen to much of a rise in oilers in general. Time to pick some up i think.

[Mick100]

31/03/09 net short 11450 49.66

14/04.09 net short 14100 52.50
21/04/09 net long 2585 48.55
28/04/09 net long 7100 49.92
05/05/09 net long 4400 53.84
12/05/09 net short 17150
19/05/09 net short 48000 60.10
26/05/09 net short 55700 62.45
,

[Mick100]

31/03/09 net short 11450 49.66

14/04.09 net short 14100 52.50
21/04/09 net long 2585 48.55
28/04/09 net long 7100 49.92
05/05/09 net long 4400 53.84
12/05/09 net short 17150
19/05/09 net short 48000 60.10
26/05/09 net short 55700 62.45
02/06/09 net short 56700 68.55

[airedale]

Just picked this up and may be worthy of discussion. {or derision if Skol sees it}
http://www.ino.com/blog/2014/06/high-oil-prices-are-here-to-stay-heres-how-to-profit/#.U5gJefmSzT8

[Valuegrowth]

As I expected oil prices are in down trend now. NZD, AUD and CAD should follow oil next. Oil could go down to around $80 per barrel. This is good news for the global economy.

http://www.forbes.com/sites/thomaslandstreet/2014/08/20/here-comes-cheaper-oil-why-prices-are-set-to-fall/
Here Comes Cheaper Oil: Why Prices Are Set to FallMy ideas are not a recommendation to either buy or sell any security, commodity or currency. Please note that I do not endorse or take responsibility for material in the above hyper-linked sites. Please do your own research.

[BlackPeter]

OK - so I made under my "2016 predictions" the following points:


1) interest rates will stay low, though drifting slightly upwards towards the second half of 2016 (US,Europe, NZ) due to inflation rising (oil prices can't drop forever). Low interest rates will keep equity prices up;

2) oil will stay low (<US$60/bbl), this should help companies like AIR, THL, NZR (and others);

and got a question / response from troyvdh:


Giday Blackpete...good post ..but the first two confuse me..about oil ..I believe that the average price per barrel is about $27.50...over the past 120 odd years..not sure if that is inflation adjusted....as you are aware the world currently has S...

Just thought that the subject belongs more into this thread ... and therefore transferred the lot.

First - I am no oil expert - and I didn't foresee the amazing crash in the oil prices (in the 2nd half of 2014) either - i.e. your view is as good as mine or anybody elses. Here is the reasons I think that the average oil price in 2016 will be similar, or not much lower than 2015 and (modestly) rising afterwards:

Hardly any oil producer around these days who can afford to live with the current prices. A number of mid American countries are due to low oil price close to state bankrupt (e.g. Venezuela), Russia has huge financial problems and even Saudi Arabia can't afford to keep pumping long term at current price level. If you look at the balance between world oil supply and demand - yes, we have currently more supply than demand, but the gap is not that huge. Take less than 2% from the supply side away and demand is larger than supply and prices would increase (though obviously - the higher the price goes, the more additional wells (like shale oil) turn profitable again, and as well a higher price would curb demand (which is currently rising with an amazing rate) - i.e. I don't expect oil to reach anytime soon prices above $80 again.

Just do the sums ... if every oil producer produces just 2% less oil, than they all could immediately get say 50% more money for their oil. What would you chose? Producing 100 bbl oil for $40 each, or 98 bbl for $60? Right - I know, there are a lot of idiots in the oil business who just love to constantly shoot into their own feet, but I think this business case is just too compelling to keep them from fighting a price war forever nobody can win (and I mean nobody).

Otherwise - if they really keep fighting ... (assume Saudi Arabia's strategy works) - it does not take too much to bankrupt 2% of the world oil producers and again ... the oil price will immediately react. Remember - not too many new shale oil projects started in 2015 ... and a shale oil field loses within 18 months or so about 50% of its production if you don't keep drilling.

I.e. worst case (if you like a higher oil price) is for the glut to continue in 2016 (with Iran coming online), but by end of 2016 more shale oil will have left the market than the Iranians can additionally produce. Again - oil will go up in 2017.

That's the reason I think that 2016 will bring first another mild price dip (remember Iran) and in 2017 oil will move upwards again.

BTW - I seem to be not the only one believing in a (after 2016) slowly increasing oil price. Have a look into the current Brent futures (http://www.barchart.com/commodityfutures/Crude_Oil_Brent/CB?search=CB*), or look into the recent IEA report (https://www.iea.org/oilmarketreport/omrpublic/) - they all show similar trends, but again ... experts have been wrong before (and so have I) ...

Hope this helps. DYOR & all the best

[troyvdh]

Thanks B pete..My understanding is that OPEC want to screw both Russia and the US frackers...who both require oil between 80-100.
MY understanding is the price in some OPEC countries was (to extract) is 5-15 per barrel.
My understanding also is that production in Russia and the frackers..cannot be easily turned on again quickly.

We live in interesting times..who would have thought the US would be self sufficient re oil 10 years ago..?????

Stocks of oil in the China and the US are I believe there highest ever.....

This geopolitical stuff re oil is truly fascinating....cheers

PS...Imagine when asked your occupation and replying "Im a little fracker"...cheers agin

[BlackPeter]

Interesting development in the middle East after the recent politically motivated Saudi executions:
http://edition.cnn.com/2016/01/03/middleeast/saudi-arabia-executes-dozens-terror/

Killing political opponents is always a sign of weakness. Last resort of a tyrannical and unjust government. Strong governments don't need to kill their opponents, they can afford to have a dialogue with them.

Sure, we don't know whether this spark was strong enough to bring the powder barrel to explosion - and if it does, than the process to follow can (and probably will) go on for years to come (just another lawless state like Libya, Iraq, Syria?), but I think that what we might see now is the beginning of the end of the Saudi kingdom.

Pretty sure it will make Saudi Arabia a still less desirable place to live (more refugees?). Interesting question is however what trouble in Saudi Arabia might mean for the rest of the world. More or less terrorism paid by oil dollars? Oil price up or down?

Or is this just a news flash and the cemetery of Saudi Arabia will fall back into deadly silence?

[Daytr]

BP, I agree that oil probably can't be sustained at current prices, however what we are seeing is a war of attrition in regards supply. In the past when the price has dropped we have seen production cuts, now we see efficiency gains and increased production to lower costs. Its a last man standing mentality & its not just the oil market that is seeing this behavior. The Saudis have always been the swing factor in regards production, however they realize now that any cut they make will just be taken up by someone else. The Saudis also know that he world is on the cusp of an energy revolution in regards alternatives to the combustion engine and its only a matter of time that demand starts falling. So in the mean time they want o pump as much as they can. At some point I believe the Saudi regime will be toppled due its corruption & the massive disparity of wealth that its citizens do not share in. In summary I think you are right oil will go higher, but it may take a wee while for the production cuts to take effect.

[Daytr]

Wow crude smashed again! I saw BOA calling for $25/bbl the other day!

[Valuegrowth]

It is time to take advantage from falling oil and other commodity prices. This will benefit industries which consume more commodities such as oil, grain and other raw materials.

[Daytr]

Airlines are a good example, but that's hardly a new thought.
With oil so low there is likely to be a global debt crisis in regards the industry as many producers fall over in 2016.
I have been calling for a $32 low in oil for about a year.
I noticed last night we bounced off that.
Certainly be interesting to see if this is indeed the low.
Copper smashed, now $2/lb.
Gold over $1100.
Equities smashed again.
Interesting times

[BlackPeter]

interesting interview:

http://www.nzherald.co.nz/business/news/video.cfm?c_id=3&gal_cid=3&gallery_id=156938

[JBmurc]

from 2014-
http://investmentwatchblog.com/2-trillion-high-yield-debt-market-on-the-verge-of-default-goldman-sachs-says-1-trillion-in-investments-just-went-poof-due-to-the-collapse-of-oil-debt-defaults-have-already-begun-to-hit-in-the-north/


Latest new on OIL....
http://www.bbc.com/news/business-35245133


How much longer can many Oil focused businesses keep afloat if the 2014 articles are correct ??..with so much DEBT tied to Oil ....looks very GFC all over again but this time it's not from overleveraged property but crude oil ....and like last time this will feed through the system to yet again force the likes of the FED to bail out it mates on wall street while taxpayers worldwide will fit the bill...DEBT and more DEBT === Deflation ....=Depression ?

[BlackPeter]

from 2014-
http://investmentwatchblog.com/2-trillion-high-yield-debt-market-on-the-verge-of-default-goldman-sachs-says-1-trillion-in-investments-just-went-poof-due-to-the-collapse-of-oil-debt-defaults-have-already-begun-to-hit-in-the-north/


Latest new on OIL....
http://www.bbc.com/news/business-35245133


How much longer can many Oil focused businesses keep afloat if the 2014 articles are correct ??..with so much DEBT tied to Oil ....looks very GFC all over again but this time it's not from overleveraged property but crude oil ....and like last time this will feed through the system to yet again force the likes of the FED to bail out it mates on wall street while taxpayers worldwide will fit the bill...DEBT and more DEBT === Deflation ....=Depression ?

Show me the analyst who predicted the 2014 oil price drop prior to it going down. Same thing now - only thing these guys seem to be able to do is linear extrapolation, which is easy, but (at least mid and long term) always wrong.

Lower oil prices so far have always been a stimulus for the world economy - and I fail to see why it should be different this time around. Cheap transport is crucial in a globalised world.

As well - long term it is impossible to sustainably produce oil (or anything else) below production cost - and both Saudi Arabia and Iran together (who really could go down to close to $10 / bbl) are not able to supply all the oil the world needs (at the moment they produce together roughly 15% of the world supply - i.e. 85 % must be sourced from more expensive wells), i.e. the oil price will recover at least to around the production cost of the most expensive still required well (including Europe and US).

I don't know, what the oil price is in a month, but I am sure that next year this time it will be higher than today.

I've seen recently a statistics - and from memory all oil debts in the US together are something like 0.7% of their total debts. Less than what the Greek debts are to Europe. Unlikely as well for all of them default.

Agreed - at this stage there are a number of oilers running on a deficit - and some of them will get caught. Whether this now triggers the crash of the world banking system not achieved in 2015 by the Greek crisis nor by the Shemittah nor by the blood moon (I think in October) - I don't think so.

[BlackPeter]

Latest new on OIL....
http://www.bbc.com/news/business-35245133


Actually - not quite consistent with the "official" data. This is what the IEA said in December 2015 about the world oil storage capacity:


Shrinking non-OPEC supply and on-trend demand growth should lead to a marked slowdown in the pace of global stock builds next year (i.e. 2016). However, as extra Iranian oil hits the market, inventories are expected to swell by 300 million barrels. Concerns about reaching storage capacity limits appear to be overblown. Oil tank tops should not come under pressure any time soon, due to spare storage capacity in the US and expectations of future storage capacity additions. Much of the excess oil will be soaked up by 230 mb of new storage capacity additions, while US inventories are only 70% full.


while the BBC report claims:


"Storage is pretty much full and people are already talking about buying tankers as floating storage," he says. "But if supply continues to outstrip demand, then the only thing that you can do with the oil is sell it, which inevitably pushes the price down."

Not sure about you, but I think my money would be still on the IEA report.

[JBmurc]

Well I like your optimism ...but for me I just can't put the rose-tinted glasses on with all the factors coming together ...add in history and you can see a picture forming that's far from rosey ....not that I think the current slide will be the big one aka.. GFC2 but certainly the next move downward is likely to be.after the optimism is meet with true reality .(IMHO 8-12m out)

IMHO I think there is going to have to be some HUGE Debt write-offs ..

For me that is a move to cash ,,,low risk investments,Bullion,Cash ,Term dep ANZ,WP,ASB etc and some funds in the likes of AUD Gold producers and high yield property ... and get set for a major downturn to then buy up blue-chips / Property for a record low price...

[JBmurc]

Actually - not quite consistent with the "official" data. This is what the IEA said in December 2015 about the world oil storage capacity:



while the BBC report claims:



Not sure about you, but I think my money would be still on the IEA report.

As of only minutes ago CNBC stated US oil storage as FULL.................

[Daytr]

Crude smashed again. When is the first major bankruptcy?
As I write Chesapeake is on trading halt. Is it the first?
What will be the impacts to the wider market? Bank exposure etc?
Then there are the emerging economies that are under immense financial stress.

[Hoop]

Yes JB & Daytr... I think if the demise of oil prices stay in the $20's for a long period of time it could be big enough to cause another Financial crisis...

The Argument is that Oil reserves are assets and valued into the business structure....the housing market bust crisis in 2007-2008 wiped out over $7 trillion from the US Property Market (http://www.marketwatch.com/story/how-the-bubble-destroyed-the-middle-class-2011-07-08) and created the GFC .......Ok, the debt structure was dodgy which was the major factor (I highly recommend all investors should see the Film The Big Short)..but $7 trillion is a huge number.
The 2008 Financial Crisis cost the Americans $12,8 trillion (http://finance.yahoo.com/blogs/daily-ticker/2008-financial-crisis-cost-americans-12-8-trillion-145432501.html)*
* Mentally grasping large numbers...The height of a stack of 1,000,000,000,000 (one trillion) one dollar bills measures 67,866 miles. This would reach more than one fourth the way from the earth to the moon.

I get email from John Mauldin and his recent newsletter (http://www.mauldineconomics.com/frontlinethoughts) made me realise why equity markets are so upset with super low Oil prices...
John's article starts off with someones screengrab from Twitter

http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/160206-02.jpg

Hmmmm...From doing the simple math...prolonged low oil prices doesn't sound like good scenario for the Global economy does it?

[troyvdh]

Is it to simplistic to say that Opec's intention (by not reducing supply) is to F... the American frackers..and Russia...both I believe require a price north of $80 PB.

In addition is it correct to say that its relatively simple to cease production of oil.....but not so easy to crank it up again.

I like simplicity.cheers troy

[Daytr]

The estimate is around a trillion of debt relating to the energy sector. Not sure if that includes bonds, but it probably does.
Then there are the impacts to ancillary businesses and entire countries like Venezuela etc.
Sovereign wealth funds of oil producing countries are selling other assets such as equities, Russia selling more copper.
You get the drift.


Yes JB & Daytr... I think if the demise of oil prices stay in the $20's for a long period of time it could be big enough to cause another Financial crisis...

The Argument is that Oil reserves are assets and valued into the business structure....the housing market bust crisis in 2007-2008 wiped out over $7 trillion from the US Property Market (http://www.marketwatch.com/story/how-the-bubble-destroyed-the-middle-class-2011-07-08) and created the GFC .......Ok, the debt structure was dodgy which was the major factor (I highly recommend all investors should see the Film The Big Short)..but $7 trillion is a huge number.
The 2008 Financial Crisis cost the Americans $12,8 trillion (http://finance.yahoo.com/blogs/daily-ticker/2008-financial-crisis-cost-americans-12-8-trillion-145432501.html)*
* Mentally grasping large numbers...The height of a stack of 1,000,000,000,000 (one trillion) one dollar bills measures 67,866 miles. This would reach more than one fourth the way from the earth to the moon.

I get email from John Mauldin and his recent newsletter (http://www.mauldineconomics.com/frontlinethoughts) made me realise why equity markets are so upset with super low Oil prices...
John's article starts off with someones screengrab from Twitter

http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/160206-02.jpg

Hmmmm...From doing the simple math...prolonged low oil prices doesn't sound like good scenario for the Global economy does it?

[Joshuatree]

Crude smashed again. When is the first major bankruptcy?
As I write Chesapeake is on trading halt. Is it the first?
What will be the impacts to the wider market? Bank exposure etc?
Then there are the emerging economies that are under immense financial stress. exposure to Oil

Haven't looked but am hearing Chesapeake is in trouble and Deutsche bank too.No source to back this up. Like OOO on the ASX as a way of exposure to Oil without a producers risk but not yet.

[stoploss]

exposure to Oil

Haven't looked but am hearing Chesapeake is in trouble and Deutsche bank too.No source to back this up. Like OOO on the ASX as a way of exposure to Oil without a producers risk but not yet.

http://www.bloomberg.com/news/videos/2016-02-08/chesapeake-energy-no-plans-to-pursue-bankruptcy

[Valuegrowth]

http://www.bloomberg.com/news/articles/2016-10-03/iran-opec-s-big-winner-signs-landmark-oil-investment-contract

Iran, OPEC’s Big Winner, Will Sign Landmark Oil Contract

[Valuegrowth]

http://www.bloomberg.com/news/articles/2016-10-23/oil-holds-above-50-as-iraq-signals-break-from-opec-output-plan

Oil Falls as Iraq Seeks Exemption From OPEC Cuts, U.S. Adds Rigs

[Valuegrowth]

http://www.reuters.com/article/us-petrobra...SKBN13R1GQ?il=0 (http://www.reuters.com/article/us-petrobras-opec-shale-idUSKBN13R1GQ?il=0)

Petrobras CEO says U.S. shale response to OPEC deal may cut oil prices

[Valuegrowth]

Is there any other reason for falling of oil prices other than U.S Shale activitiy?

http://ww2.cfo.com/the-economy/2017/03/oil-prices-stocks-hit-new-record/

[BullishBear]

Is there any other reason for falling of oil prices other than U.S Shale activitiy?

http://ww2.cfo.com/the-economy/2017/03/oil-prices-stocks-hit-new-record/Oversupply seems to be the answer. http://www.vox.com/2016/1/12/10755754/crude-oil-prices-falling

[BlackPeter]

Oversupply seems to be the answer. http://www.vox.com/2016/1/12/10755754/crude-oil-prices-falling

the article you refer to is written in February 2016 ... well, I guess it still might have some historic value;)

If you prefer some more up to date news ... try e.g.:

https://www.iea.org/oilmarketreport/omrpublic/

[Valuegrowth]

Thanks Bulllishbear & Blackpeter for the links.

[Valuegrowth]

http://www.reuters.com/article/us-global-oil-idUSKBN17N04E

[Valuegrowth]

http://www.zerohedge.com/news/2017-04-29/four-charts-prompted-oil-analyst-declare-opec-deal-failure

[Valuegrowth]

https://www.bloomberg.com/news/articles/2017-05-03/oil-resumes-decline-as-u-s-crude-production-expands-11th-week


Oil's OPEC-Driven Gain Wiped Out as Shale Boom Offsets Cuts

[JBmurc]

https://www.bloomberg.com/news/articles/2016-08-29/oil-discoveries-at-a-70-year-low-signal-a-supply-shortfall-ahead

older post but very interesting where we will be in 10yrs time

[Hoop]

Historically speaking Oil isn't under priced today (chart adjusted for inflation) (http://www.macrotrends.net/1369/crude-oil-price-history-chart) ...I know this question is simplistic but..what did the greedy bastards do with the all money when they where fleecing us (for nearly a decade) just a few years ago?

[peat]

Historically speaking Oil isn't under priced today (chart adjusted for inflation) (http://www.macrotrends.net/1369/crude-oil-price-history-chart) ...I know this question is simplistic but..what did the greedy bastards do with the all money when they where fleecing us (for nearly a decade) just a few years ago?

there is always a way to spend money
8921

[BlackPeter]

there is always a way to spend money
8921

Pretty sad though, that his hawks had to fly economy. Maybe the low oil price starts already to bite. I'd expect better from a real Saudi royalty :p.

[Joshuatree]

This snippet below is reckoning 5 years now JB and just how many reserves left do the saudis really have?

"Are we in an oil rout on the cusp of a oil crisis?

Yes, very much so, and I think they have their 5 year time frame about right. Oil is traded on a very short term outlook which is currently signalling "glut" but the long term supply outlook is grim.

What to make of an industry that is discovering so much less than its annual demand? Demand runs in excess of 96 m barrels per day (https://www.iea.org/about/faqs/oil/) (equals 35 billion barrels per year) and yet the industry discovered just 2.4 billion barrels last year (https://www.iea.org/newsroom/news/2017/april/global-oil-discoveries-and-new-projects-fell-to-historic-lows-in-2016.html) and has averaged just 9 billion barrels of discoveries per year over the last 15. Another oil price spike is surely coming - it will be great for Lithium and great for oil producing investments at the same time."

[JBmurc]

Yes I agree long term some of quality over sold Oil&Gas companies will give smart
Buyers some pretty spectacular returns ... maybe next year I might dip my toes back
Into some oilers.... only really interested in Aus east coast gas plays in the sector
Currently

[JBmurc]

https://www.thebalance.com/oil-price-forecast-3306219

The idea of oil at $200/b seems catastrophic to the American way of life. But people in the European Union were paying the equivalent of about $250/b for years due to high taxes. That didn't stop the EU from being the world's third-largest oil consumer. As long as people have time to adjust, they will find ways to live with higher oil prices.

Furthermore, 2020 is only three years away. Look how volatile prices have been in the last 10 years. In March 2006, a barrel of Brent Crude sold for around $60/b. It skyrocketed to $145/b in 2008. It leveled out to around $100/b in 2014. It plummeted to a 13-year low in January, then doubled to current levels. If shale oil producers go out of business, and Iran doesn't produce what it says it could, prices could return to their historical levels of $70 - $100 a barrel. OPEC is counting on it.

[shasta]

I've recently acquired some CVN, the oil sector is unloved, but gas in Aussie is an increasing issue re demand. CVN has both and an exceptional strike rate in the NW shelf WA where all there projects are concentrated.

Well worth a read of the last presentation and quarterly.

Market cap around 90m with 52m cash and no debt.

[JBmurc]

I've recently acquired some CVN, the oil sector is unloved, but gas in Aussie is an increasing issue re demand. CVN has both and an exceptional strike rate in the NW shelf WA where all there projects are concentrated.

Well worth a read of the last presentation and quarterly.

Market cap around 90m with 52m cash and no debt.

Yes CVN always been on the radar when I've been bullish on the sector and have held before >> still not confident in the short term outside Aus East coast Gas >> only holding RLE in the O&G sector >> but can see myself trading more next year ...

Need to see the huge under investment in the Oil sector play out over the next few years of continued high oil use to see the supply demand ratio kick the oil price much higher ....

worth a read
https://srsroccoreport.com/u-s-smashes-record-highest-production-of-lowest-quality-fuel-in-the-world/

[Crypto Crude]

Im actually in the process of divesting my oil stocks... recent data suggests both bull and bearish sentiment in oil...
uk along with france and a bunch of other countries are in the process of banning new cars from 2040 and moving towards electric... this is a great step for mankind and something I never thought would happen...
aussie oil stocks have been boring for a decade now time to make some real money

[JBmurc]

Im actually in the process of divesting my oil stocks... recent data suggests both bull and bearish sentiment in oil...
uk along with france and a bunch of other countries are in the process of banning new cars from 2040 and moving towards electric... this is a great step for mankind and something I never thought would happen...
aussie oil stocks have been boring for a decade now time to make some real money

And you don't think and the huge mining energy needs for (electric cars = power stations etc) and ongoing demand for the tens of thousands of applications that use crude oil Vs the huge under investment in exploration to back up the world's """34 billion barrels a year demand""!

there was only 2.4billion barrels of oil discovered in 2016 .... I don't think E.V are here to take over combustion engines but are going be forced to take the load as the forecasts for China + India is a HUge increase in auto's

[Joshuatree]

I've recently acquired some CVN, the oil sector is unloved, but gas in Aussie is an increasing issue re demand. CVN has both and an exceptional strike rate in the NW shelf WA where all there projects are concentrated.

Well worth a read of the last presentation and quarterly.



Market cap around 90m with 52m cash and no debt.

This teaser should help the s/p shasta.

Download Document 364.65KB (https://hotcopper.com.au/documentembed?id=uOMxKKzFkiWRTLKhOROKAxjvTDYC5wq7z hGZo%2BF3ke92GA%3D%3D)

[cammo]

It'll take 25 barrels of oil to make each EV. Don't worry just cos fuel use in vehicles is starting to decline, we still have to make all those batteries and 3 billion cars to be replaced? And all the solar panels, just cos we ain't burning it directly while driving, doesn't mean it's not consuming indirectly.

Our government has waived road user charges until 2021. That only helps the early adopters. Then the cost of running will jump up. I suspect the rate will have to go up as they start missing all the return from fuel excise tax.

There will obviously be a lot of people hanging onto old Dino tech for various reasons. The problem with the technology is that it doesn't allow for a disorganized human. I can't be bothered to plug in my phone nor wait an hour to charge... How's my car gonna be different? Much rather go buy some gas.

[NZSilver]

Oils down a lot, will it go further or upside from here

[wizAlvin]

ASZ 2019 competition closing in few hours

[airedale]

Amazing gap down from $43 to $27 when US market opened.

[blackcap]

Amazing gap down from $43 to $27 when US market opened.

Yeah that was a huge gap. I did nibble and buy some oil today at $30.90. Will see where that ends up. Down currently but thinking in the next 12 months will have chances to exit profitably.

[Crypto Crude]

Black cap...
oil is headed to $20us or below...
Into the total unreal prices
:cool:
.^sc

[blackcap]

Black cap...
oil is headed to $20us or below...
Into the total unreal prices
:cool:
.^sc

It may be, it may not be, but if it does I shall be purchasing a lot more. Now I have to find a space on my lawn for the 200 barrels I purchased today. The Mrs was not happy, looks like the lawn is going to be covered :)

[Valuegrowth]

https://www.straitstimes.com/business/companies-markets/oil-jumps-10-after-historic-rout-as-lawmakers-weigh-stimulus

[Crypto Crude]

Oh wow what is Saudi Arabia doing here...
They need $82-84us per barrel just to break even on the books...
With the demand shock this could get real ugly...
$15 barrels next is it... this is truly the twilight zone...
I just cant come to terms with how sickening that is...
:cool:
.^sc

[bermuda]

Shrewdy,
Maybe MBS and Putin understood how painful this virus is...and is going to be. I am getting real worried about a total world shut down.
ps Don't believe Trump's claim it will be all over by Easter.
Best
to
you Shrewdy and stay isolated.

[Valuegrowth]

Corona invaded into commodity market as well.

Oil should bounce back in the second half of 2020. It can happen next week or next month too if corona statistics come true. I expect the average price of Brent at $35 to 40 per barrel in 2020. China is stockpiling oil. The United States also want to buy crude oil for the Strategic petroleum Reserve. Low commodities prices are boon for many industries.

https://oilprice.com/Latest-Energy-News/World-News/US-To-Buy-77-Million-Barrels-Of-Crude-For-Strategic-Petroleum-Reserve.html

[JBmurc]

Shrewdy,
Maybe MBS and Putin understood how painful this virus is...and is going to be. I am getting real worried about a total world shut down.
ps Don't believe Trump's claim it will be all over by Easter.
Best
to
you Shrewdy and stay isolated.

I agree bermuda ... I'm sure your not to leveraged or exposed but I've certainly taken the losses and moved funds out from the energy sector ... going take some time to see crude demands back at longer term averages ..2021-22 etc ... I'll be very surprised to see Brent over $40bbl this year .. far too many energy producing nation's with excess supply..

Only hope is US Shale + Tar sands operations grind to a halt must be a list of bankruptcies coming 2H20 at these levels

[Joshuatree]

Yeah wheres the excess production all going. im hearing about all those supertankers that are storing what, a billion or so barrels, and super con tango ahead. Interesting times and firsts on so many levels.

[Crypto Crude]

Thank you Bermuda,
Look after yourself sir...


Yeah wheres the excess production all going. im hearing about all those supertankers that are storing what, a billion or so barrels, and super con tango ahead. Interesting times and firsts on so many levels.

Straight into boosting Strategic petroleum reserves (spr)...
....

:cool:
.^sc

[Valuegrowth]

https://www.reuters.com/article/us-global-oil/oil-surges-as-trump-talks-up-hopes-for-truce-in-saudi-russia-price-war-idUSKBN21J6ZR

[Crypto Crude]

LOL and just like the end of the oil 'ego' price war ....
:cool:cc

[Crypto Crude]

Today the biggest day in oil price history ...
US oil prices fall into negative prices .. here I will pay you to take the barrel away....

https://www.google.com/amp/s/amp.theguardian.com/business/2020/apr/20/over-a-barrel-how-oil-prices-dropped-below-zero
:cool:cc

[Crypto Crude]

It hit -$40us totally unreal ... can not believe it...
:scared:cc

[Crypto Crude]

Yeah that was a huge gap. I did nibble and buy some oil today at $30.90. Will see where that ends up. Down currently but thinking in the next 12 months will have chances to exit profitably.

Would you like to pay me and I can take those barrels of oil off you...
:cool:cc

[blackcap]

Would you like to pay me and I can take those barrels of oil off you...
:cool:cc

Haha cheers Crypto. I forgot to mention I got cold feet a while back and did end up selling. But yeah crazy times. I think I could fit 200 barrels on my lawn so all good for the offer but I would pass for now :)

[ynot]

Is this a buy !

[Joshuatree]

No its dangerous. Read the thread on H/C about it. Some people despite the warning have lost their dough.

Thread (https://hotcopper.com.au/threads/warning-read-me-before-buying-ooo.5346778/#post-44087281)

Ive been looking for safer longer term plays (re 2 years) .happy to share what ive found.Bound to be others out there ? Or one could buy oilers eg Woodside.

Avoiding ones which rollover future contracts as oil is in con tango.

FUEL an ETF holds a portfolio of oilers globally.

Energy Spider XLE on US stock exchange

[ynot]

No its dangerous. Read the thread on H/C about it. Some people despite the warning have lost their dough.

Thread (https://hotcopper.com.au/threads/warning-read-me-before-buying-ooo.5346778/#post-44087281)

Ive been looking for safer longer term plays (re 2 years) .happy to share what ive found.Bound to be others out there ? Or one could buy oilers eg Woodside.

Avoiding ones which rollover future contracts as oil is in con tango.

FUEL an ETF holds a portfolio of oilers globally.

Energy Spider XLE on US stock exchange

Thanks JT. My comment was actually in jest so no, not buying. Good explanation in your link.

[Valuegrowth]

Because New Zealand is a net importer of oil, lower crude prices will benefit the economy after the Covid-19 crisis.The world is running out of places to store oil while China is stockpiling oil.

https://oilprice.com/Energy/Nuclear-Power/China-Doubles-Rate-Of-Crude-Stockpiling-As-Oil-Falls-Below-0.html (https://oilprice.com/Energy/Nuclear-Power/China-Doubles-Rate-Of-Crude-Stockpiling-As-Oil-Falls-Below-0.html)

[SBQ]

Because New Zealand is a net importer of oil, lower crude prices will benefit the economy after the Covid-19 crisis.The world is running out of places to store oil while China is stockpiling oil.

https://oilprice.com/Energy/Nuclear-Power/China-Doubles-Rate-Of-Crude-Stockpiling-As-Oil-Falls-Below-0.html (https://oilprice.com/Energy/Nuclear-Power/China-Doubles-Rate-Of-Crude-Stockpiling-As-Oil-Falls-Below-0.html)

A lot of this depends on what source of oil? The most in discussion is WTI crude but if you look at Brent Crude oil it's a lot higher:

https://oilprice.com/oil-price-charts

Canadian WCS oil is a problem of export as it's entirely land locked. It's also a low grade oil blend.

Without a doubt globally, oil inventories are getting maxed out. The refineries in the Middle East can't simply shut down (or not designed to be shut down). Inefficient oil producers such as fracking and oil sands will suffer the most for as long as this COVID19 quarantine stays in effect.

You want to fix the oil prices back up? Just open the economy and end the quarantines.

[Crypto Crude]

What impecible timing that Saudi Aramco IPO was...
Here's a snapshot of the biggest IPOs in history raising 25 billion dollars now with a 1.7 trillion dollar valuation...
The IPO price was 32...
11383
:)cc

[Crypto Crude]

Wow this chart here just shows how sickk a moment we are in....
11399
:cool:cc

[Valuegrowth]

Black gold is showing some strength. But I expect some volatility.

[pedro.nz]

13863

BetaShares Global Energy Companies ETF - Currency Hedged (FUEL.AX)

[Joshuatree]

Ticker is OOO X dist ,77c tomorrow.Holding in my energy portfolio.Energy stocks pricemakers through inflation.

[pedro.nz]

Ticker is OOO X dist ,77c tomorrow.Holding in my energy portfolio.Energy stocks pricemakers through inflation.

Got me a bit puzzled Josh, OOO.AX is currently at 9.73...
As of 01:32PM AEST. Market open

[777]

Got me a bit puzzled Josh, OOO.AX is currently at 9.73...
As of 01:32PM AEST. Market open

I think he is referring to the distribution being ex tomorrow.

[pedro.nz]

Ah, of course, thanks 777

[Joshuatree]

Oil up another 2 to 3%.EU leaders agree to ban most Russian oil imports.90% of Russian oil will be cutoff by end of year.
Bulgaria ,Finland ,Poland,Netherlands and Denmark decided to stop paying for Russian gas in Roubles so are being cut off supply.
Talk of Windfall taxes for oil and gas companies .This will stop any incentive to spend on exploration and part of the reason for higher prices is under exploration in last 10 years

Posted 3 days ago

[nztx]

https://www.abc.net.au/news/2022-06-02/bowen-gas-supply-crisis-perfect-storm/101120724

Australia faces a 'perfect storm' on gas supply, as minister warns problem will not be solved quickly

[fish]

https://www.abc.net.au/news/2022-06-02/bowen-gas-supply-crisis-perfect-storm/101120724

Australia faces a 'perfect storm' on gas supply, as minister warns problem will not be solved quickly

Informative link-Some states have put a cap on prices at$40 per gigajoule(recent long-term contracts at around $7 suggests scope for massive increases into a secure and strong market)

[Joshuatree]

https://www.abc.net.au/news/2022-06-02/bowen-gas-supply-crisis-perfect-storm/101120724

Australia faces a 'perfect storm' on gas supply, as minister warns problem will not be solved quickly

The world faces a perfect storm ,I keep repeating this .I have 5 energy picks in the ASX comp,.Hope others have got the big picture by now and jumped in.Coal as well atp.

[nztx]

The world faces a perfect storm ,I keep repeating this .I have 5 energy picks in the ASX comp,.Hope others have got the big picture by now and jumped in.Coal as well atp.


Yep .. looks like a safe bet - same call here too :)

[JBmurc]

Yes I see AUD spot oil $166bbl ... I have shifted just over 60% of my portfolio into the O&G sector .... with the rest across Energy metals with HUGE forward demand -Cu,Li,Ni,U308,PGMs etc

I agree safe .. hard to go bankrupt when your investment is making $$$$ and discovering Major future producing mines of critical metals>>

Not liking the stupid selling at present !!!

[Joshuatree]

Yes I see AUD spot oil $166bbl ... I have shifted just over 60% of my portfolio into the O&G sector .... with the rest across Energy metals with HUGE forward demand -Cu,Li,Ni,U308,PGMs etc

I agree safe .. hard to go bankrupt when your investment is making $$$$ and discovering Major future producing mines of critical metals>>

Not liking the stupid selling at present !!!

Could be a hiccup if the War in Ukraine finishes soon(I hope so). But I think this could be another op to get in,top up as the demand/ supply prob was entrenched well before the war started due to years of underexploring partly due to environmental pressure.

Crazy huh as it takes alot of conventional energy to build solar,wind,ev's etc.
We are so far behind reducing pollution that it will take something like banning cars in built up areas to start getting real change.
Just my opinion DYOR

[Panda-NZ-]

Maybe renewables can command a premium if fossil feuls remain elevated.

Who wants to rely on a resource where this is happening:

https://tradingeconomics.com/commodity/coal

[JBmurc]

Could be a hiccup if the War in Ukraine finishes soon(I hope so). But I think this could be another op to get in,top up as the demand/ supply prob was entrenched well before the war started due to years of underexploring partly due to environmental pressure.

Crazy huh as it takes alot of conventional energy to build solar,wind,ev's etc.
We are so far behind reducing pollution that it will take something like banning cars in built up areas to start getting real change.
Just my opinion DYOR

We had Energy issues prior to Ukraine ... and after ..... Russia will still have issues around O&G production.. with the Majors leaving along with their tech ..simple fact there hasn't been enough investment during the BEAR market years

Russia estimated its oil output could fall as much as 17% this year ...

EVs going take over we were told not going need oil in the future >>well thats not looking very good as along with poor investment in drilling more wells ...many Countries aren't building base load power plants ...solar wind farms just don't cut it ...along with EU nations shutting down Nuclear..

I'm sure we can all remember the BOOM in shale O&G production in the US turning the states from a net importer to actually being ableto export some energy fuels >>>but thats changed
US oil production never recovered from the price slump(Neg price) - that's the thing with fracking - you have to keep investing in new wells or production slumps. Not like Saudi Arabia, where they just have to turn some valves to increase production.....


Issues with Green Energy....
https://www.youtube.com/watch?v=N-yALPEpV4w&t=8s

[Joshuatree]

Same page but i said it first ....with less words:)

[ynot]

Maybe renewables can command a premium if fossil feuls remain elevated.

Who wants to rely on a resource where this is happening:

https://tradingeconomics.com/commodity/coal

Anyone that wants to recharge their fossil free car for the next decade or three. Renewables are not up to the job.

[nztx]

A fair bit of nasty weather from TC Agatha blowing through Cuba in recent days, I see:


https://www.bbc.com/news/world-latin-america-61688827

https://www.voanews.com/a/floods-kill-at-least-3-in-cuba-/6603144.html


Might hold things up a bit for MAY's drilling program

[Panda-NZ-]

Anyone that wants to recharge their fossil free car for the next decade or three. Renewables are not up to the job.

Neither are fossil feuls given the price hikes and shortages.

[ynot]

Neither are fossil feuls given the price hikes and shortages.


Well then I guess its pay the price or get on your bike.

[nztx]

ASX: MAY:

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02529402-3A595055?access_token=83ff96335c2d45a094df02a206a3 9ff4

Zapato-1 Update

* 1233 m towards (Not far off half way) to Target Structure
* Prospective 95m Barrels (Best Estimate)
* Heavy rain in vicinity of Drilling has not interfered with Drilling Operations to date

[nztx]

Well then I guess its pay the price or get on your bike.


Might be a Wind Powered trolley that needs to be pushed up to the top of the nearest hill when brisk Southerlies are howling through :)

The Road Works team at the bottom may have signed an offtake deal for some rapid foundation
digging work when no-one else is on site .. Crude Energy at Work - folks .. No oil needed :)

[Panda-NZ-]

Well then I guess its pay the price or get on your bike.

You may keep your dino blood I dont have a need for it currently.

Taxed too much anyway.

[JBmurc]

You may keep your dino blood I dont have a need for it currently.

Taxed too much anyway.

Good to hear ..I hope you also don't use any products derived from dino blood ...like Bicycle Tires ??

[ynot]

Good to hear ..I hope you also don't use any products derived from dino blood ...like Bicycle Tires ??

Not to mention the Indonesian coal being burnt in Huntly to keep the grid running, or are you running on candle light Panda.

[fish]

Natural gas prices now beating the 2008 highs and oil similar .
Reminds me of 2008 with NZo and Tui-earning $100 million p.a.
Hopefully this time-and judging by futures-it will be sustained for many years .

[Valuegrowth]

https://markets.businessinsider.com/news/commodities/oil-price-outlook-crash-investing-recession-put-options-futures-inflation-2022-6

[JBmurc]

Oil Markets Could Face A Doomsday Scenario This Week


https://oilprice.com/Energy/Energy-General/Oil-Markets-Could-Face-A-Doomsday-Scenario-This-Week.html

[airedale]

Hi JB,I remember a few years ago, Bermuda was recommending a book by a well respected oil engineer , called something like Crisis in the Desert, or simillar. Anyay the author predicted that Saudi did not really have as much spare capacity as they claimed, so eventually the real shortage/crisis would become apparent. Does anyone remember the author or name of the book?

[stoploss]

Hi JB,I remember a few years ago, Bermuda was recommending a book by a well respected oil engineer , called something like Crisis in the Desert, or simillar. Anyay the author predicted that Saudi did not really have as much spare capacity as they claimed, so eventually the real shortage/crisis would become apparent. Does anyone remember the author or name of the book?
Maybe this
https://www.wiley.com/en-us/Twilight+in+the+Desert%3A+The+Coming+Saudi+Oil+Sho ck+and+the+World+Economy-p-9780471790181

[JBmurc]

Hi JB,I remember a few years ago, Bermuda was recommending a book by a well respected oil engineer , called something like Crisis in the Desert, or simillar. Anyay the author predicted that Saudi did not really have as much spare capacity as they claimed, so eventually the real shortage/crisis would become apparent. Does anyone remember the author or name of the book?

Yes any issue with Saudi Production would see $150bbl crossed pretty quick >>

[airedale]

Maybe this
https://www.wiley.com/en-us/Twilight+in+the+Desert%3A+The+Coming+Saudi+Oil+Sho ck+and+the+World+Economy-p-9780471790181
Thanks Stoploss, Twilight in the Desert by Matthew R Simmons.

[Joshuatree]

https://hotcopper.com.au/attachments/materials-intensivity-of-renewables-jpg.4488994/

Int energy intensity figs for conventional and renewables.

[Joshuatree]

https://hotcopper.com.au/attachments/materials-intensivity-of-renewables-jpg.4488994/

Int energy intensity figs for conventional and renewables.

An awful lot of conventional energy required to make all these green energy solutions.Wheres it going to come from.With years of under exploration ,many countries reserves at lows,close to max production globally,refineries that can't keep up imo $100 a barrel is the base from hereon not re $50 like in past recessions.Im up to 10% invested in energy atp .Just hope I'm right and it really is different this time and that the world is still in denial about the perfect storm pickle it's got itself into DYOR it can be a volatile sector.

[JBmurc]

yep

I see Ford’s new electric truck was only able to tow a trailer 85 miles before the battery died. 85 miles.

And this is what the Biden regime wants to force on farmers, truckers, and everyone else who raises and transports food and goods

And all these woke -Climate change is our nuclear moment noddy's

https://www.youtube.com/watch?v=-e55Vued028&t=4s

[peat]

back to 75ish now I reckon

[JBmurc]

back to 75ish now I reckon

Nope ... well not unless ... consumers don't want to see any major investment in keeping Oil flowing anywhere near demand rates going forward .. the majors will just continue to buy-back shares and not keep investing in steady production levels..

I see Brent oil closed $101bbl .. 143bbl AUD ....

[Valuegrowth]

Dropped to $ 95.

52 WEEK RANGE USD/bbl
57.79-130.50

[peat]

support at 100 gone! tis now strong resistance

i tell ya 75 coming

[JBmurc]

support at 100 gone! tis now strong resistance

i tell ya 75 coming

We will see>>

[Joshuatree]

We will see>>

Yes,where's the supply coming from Peat?

[JBmurc]

Yes,where's the supply coming from Peat?

Is talk around an agreement might be made with IRAN soon ... but thats been talked about for years .... I think we have more Bullish cases than Negative .... most likely we will see Brent oil bounce around 90-100bbl levels till we have a clearer picture after USA mid term elections which I'm sure US Govt has been involved in keeping the Wti lower to promote better sentiment for present Govt trying to rain in INflation...

This morning's weekly EIA Report (I had to triple check these are correct)

Total Crude Inventory: -10.5 million barrels
Commercial: -7.1 m
SPR: -3.4 m
Total Gasoline: -4.6 m

Total crude inventory is now down 16% yoy and SPR is down 26%




Global oil markets face a high risk of a supply squeeze this year as demand remains resilient and spare production capacity dwindles, the new head of OPEC said.
https://ca.news.yahoo.com/opec-chief-sees-high-risk-093000669.html

https://ca.news.yahoo.com/opec-chief-sees-high-risk-093000669.html

[Walter]

yep

I see Ford’s new electric truck was only able to tow a trailer 85 miles before the battery died. 85 miles.

And this is what the Biden regime wants to force on farmers, truckers, and everyone else who raises and transports food and goods

And all these woke -Climate change is our nuclear moment noddy's

https://www.youtube.com/watch?v=-e55Vued028&t=4s

Great link thanks.

[peat]

support at 100 gone! tis now strong resistance

i tell ya 75 coming

went to 103 but failed creating even stronger resistance now

[fish]

went to 103 but failed creating even stronger resistance now

I really feel natural gas/with pipelines to lpg is the place to invest in energy atm and probably for the foreseeable future.
Obvious reasons
Short term-Russian supply near stopped .lpg input terminals completed and being built-3 new constructions even for Germany.
Long-term-natural gas is the clean transition fuel

[Walter]

yep

I see Ford’s new electric truck was only able to tow a trailer 85 miles before the battery died. 85 miles.

And this is what the Biden regime wants to force on farmers, truckers, and everyone else who raises and transports food and goods

And all these woke -Climate change is our nuclear moment noddy's

https://www.youtube.com/watch?v=-e55Vued028&t=4s

Towing something with less drag
Here's What Happened When We Tried To Tow With The Ford F150 Lightning Electric Pickup Truck - YouTube (https://www.youtube.com/watch?v=aGCokwJnntQ)

[JBmurc]

IMHO we are presently in a major Bear TRAP ... this won't last past NOV certainly DEC at the latest till OIL surges back over $100WTi
2023-24 OIL will make new record highs and stay high ..



Two of the smartest analyst in the energy sector>>
https://www.youtube.com/watch?v=PJqd3USm_uo

[JBmurc]

Strategic Petroleum Reserve release today at 8.4mb - largest release ever and is now at the lowest level since Oct 1984.....

Just think when they have to rebuild the SPR ...and we have China coming back to full demand .... many Asian nations are consuming more Oil than pre covid 2019!!

[CAM]

I found this an interesting read....
https://www.linkedin.com/posts/trevor-fulop_oilfield-investing-energysecurity-activity-6975519357812502528-6TP8/?utm_source=share&utm_medium=member_ios

This is about as simple as it gets.

US Government decided to tap the Strategic Reserve drawing about a million barrles per day. Since March

▪︎The plan was US Oil Production would rise by 1.5 Million to 2 Million Barrels per day when the draw ends. Production rose by just 300,000 total. Or about 15% of the planned increase.

▪︎The Draw which equated to 12% of USA daily supply ends next month.[/COLOR]

▪︎The 170 million barrels drawn- needs to be topped back up. Meaning the USA Government will be competing to buy Oil from other buyers in the open market.[/COLOR]

▪︎The latest half baked idea out today- they won't buy the oil till its in the $80s. Even though the market knows they need to buy the oil. 170 Million barrels worth.[/COLOR]

How this is not understood is even more troubling than the stupid idea of drawing Oil from Reserve and telling Oil Companies they will be obsolete.[/COLOR]



This is correct and one of the dumbest examples of bait and switch that we have seen in years. They managed to keep the commercial inventories roughly flat for 12 months while depleting the SPR. Once the SPR draws cease in October, the commercial inventories will start to drop by 8-10 MM bbls per week just as we go into the winter months. This will cause oil prices to run back up to the $120-130 per bbl range and cause gasoline, diesel and heating oil to all spike higher, which will cause the CPI and PPI to climb even higher than they are now.






Basically the comments are along the lines of the sale of the strategic reserves are to keep the oil price down for the elections and it will come back to bite them.