Oil price rally likely short-lived as OPEC deal not enough to reduce glutDec 1, 2016 - The oil price rally sparked by an OPEC-Russia deal to cut output is likely to be short-lived, say traders in Asia, because the agreement may only draw more supplies from storage tanks and more crude shipments from the United States. And even without increased supplies from elsewhere, if the Organization of the Petroleum Exporting Countries (OPEC) and Russia do reduce production by 1.5 million barrels per day (bpd) as pledged, the cuts would not be deep enough to shrink a glut that began to build in mid-2014, traders said.
The OPEC deal "will provide some price momentum but it cannot be compared with the cut seen back in 2008," a Singapore-based trader said, referring to the last OPEC production cut at 4.2 million bpd.
Oil slips on doubts that output cut will be deep enough to end glutDEC 07, 2016 - Oil prices slipped on Wednesday on persistent doubts whether a planned crude production cut led by Opec and Russia would be deep enough to end a supply overhang that has dogged markets for over two years.
Oil prices shot up as much as 19 per cent after the Organization of the Petroleum Exporting Countries (Opec) and Russia last week announced they would jointly cut production next year in an attempt to prop up markets. However, doubts have since emerged whether the planned cuts will be big enough to end oversupply. Since the deal was announced, both Opec and Russia have since reported record production. "The more Opec and Russia produce, the higher the starting point will be to have to cut from."
Forget Inventories – Drilling Cutbacks Will Lead To Much Higher Oil PricesOil markets continue to debate the vagaries of how much crude and refined products are stored in big white tanks and floating carriers. The feeling is that there is too much sloshing around. That’s why the oil price is under siege again, down 10 percent in the past three weeks.
Meanwhile, the untold story is at the front end of the supply chain. Fixating on inventories for any product is a narrow thought process. Think of it this way: There are no worries when there is plenty of food in the fridge; but unease about the future sets in when farmers stop planting their crops.
Global producers are broadly divesting of exploration activity at the same time as consumers are investing in 90 million new hydrocarbon-consuming vehicles each year. Inventories may be full for now, but nothing in the global drilling data is comforting about future oil supply meeting still-growing consumption.
kublikhan wrote:Observerbrb, thank you for proving a point I have made several times now. This oil investment retrenchment will eventually cause the oil market to tighten up. Your sources are giving a date of 2020 or so for when this will happen. Care to take a guess on what happens when the oil market tightens up?
Then I suggest you choose your sources more carefully as they are saying something different from what you think they are saying. Did you read the headline for your source?Observerbrb wrote:This is where we certainly disagree. I don't think the market will ever tighten up
Yes, do you? Because what happened to oil demand does not match the narrative you are trying to paint here. Global oil demand dropped 1% between 2007 and 2009. Then the following year, it rose over 4% and continued to climb year after year. Even the greatest recession since the great depression only knocked oil demand down 1%. And even that was overwhelmed by demand growth 4 times over the following year.Observerbrb wrote:I think that the asset bubble courtesy of the CBs will eventually burst- This development will negatively affect the economy by causing a recession and maybe something worse, oil demand won't recover from this event but the opposite. Don't you think that real estate, virtual currencies, stocks and FANG are severely inflated? This is a complete madness. We have been down this road many times, that I presume that everyone here knows how it will end.
There are signs that some bubbles are starting to crack (one of them is the automobile sector in the USA), another one is Chinese demand. You can see some signs in some luxury property as well. Commercial and Industrian loans are stagnating - Do you know what happened last time they had this behaviour?
I couldn't agree more. We need to stop acting like oil demand fell through the roof the last time we had a global recession and look at what happened in reality. In reality, demand fell for 1-2 years and then resumed it's upward trajectory hitting new records which continues to this day.Observerbrb wrote:We better deal with reality and take one step back, to take two steps forward later, or something sinister is going to happen - and soon.
Observerbrb wrote:If you pay attention, this is the picture which has been accurately described by Steve Ludlum and BW Hill.
Impressive.
AdamB wrote:Observerbrb wrote:If you pay attention, this is the picture which has been accurately described by Steve Ludlum and BW Hill.
Impressive.
Hogwash. Ludlum expressed some fanciful thought that the world would end on Jan-2015 because of lower prices stopping producers from producers...and instead producers produced more.
And the Hill gang says oil prices can only go down. More than a year ago I said right here on this website that the cure for low oil prices is yet more lower prices, the cure for low oil prices are the low prices themselves. Ludlum has already disqualified himself, Hill will in time, as soon as the obvious, expected, and 100% successful in the past anecdote I have relayed right here at po.com, free of charge, takes places.
peripato wrote:AdamB wrote:Observerbrb wrote:If you pay attention, this is the picture which has been accurately described by Steve Ludlum and BW Hill.
Impressive.
Hogwash. Ludlum expressed some fanciful thought that the world would end on Jan-2015 because of lower prices stopping producers from producers...and instead producers produced more.
And the Hill gang says oil prices can only go down. More than a year ago I said right here on this website that the cure for low oil prices is yet more lower prices, the cure for low oil prices are the low prices themselves. Ludlum has already disqualified himself, Hill will in time, as soon as the obvious, expected, and 100% successful in the past anecdote I have relayed right here at po.com, free of charge, takes places.
When did Ludlum say such a thing? I think you're just making shit up. His forecasting has been very accurate over the years, and I certainly made a LOT of money following it.
Outcast_Searcher wrote:peripato wrote:AdamB wrote:Observerbrb wrote:If you pay attention, this is the picture which has been accurately described by Steve Ludlum and BW Hill.
Impressive.
Hogwash. Ludlum expressed some fanciful thought that the world would end on Jan-2015 because of lower prices stopping producers from producers...and instead producers produced more.
And the Hill gang says oil prices can only go down. More than a year ago I said right here on this website that the cure for low oil prices is yet more lower prices, the cure for low oil prices are the low prices themselves. Ludlum has already disqualified himself, Hill will in time, as soon as the obvious, expected, and 100% successful in the past anecdote I have relayed right here at po.com, free of charge, takes places.
When did Ludlum say such a thing? I think you're just making shit up. His forecasting has been very accurate over the years, and I certainly made a LOT of money following it.
Steve Ludlam is a doomer type. Why would you be surprised that he has predicted economic collapse in the past? Are you in total denial of the idea that many wrong doomer predictions lessen credibility over time?
peripato wrote:But when did he actually predict a date?
peripato wrote:Not that it matters, since his general thesis of collapse is correct, and anyway I made a lot of money off his forecasts and the extra time that all the emergency central bank interventions have afforded us means I get to spend it before it becomes worthless. If anyone is in denial it's you lot who refuse to see the wood for the trees.
peripato wrote:But when did he actually predict a date?
asg70 wrote:peripato wrote:But when did he actually predict a date?
Oh, please. Most hide behind language which means the following:
donstewart wrote:the end is nigh
See:
https://srsroccoreport.com/shale-oil-ga ... ash-flows/
Guest post by Heinrich Leopold (who I do not know)
Also, Steve says he will be posting new charts from Jean Laherrere regarding the Permian in a couple of weeks.
Don Stewart
Observerbrb wrote:AdamB, Thanks for showing that he actually predicted a date...and was right! Much appreciated.
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