[Outcast_Searcher]

As for me, I hope to keep driving my Diesel pickup, my 200HP outboard equipped fishing boat, other cars, motorcycle, for the foreseeable future ... and be thankful I live in a part of the world that's only 5% of the World's population across 3.7 million plus square miles, borders two seas, and has enough Oil Sands to help us limp along while the rest of the world whimpers! (This scenario requires we assimilate Canada)

Or we just trade and process oil as normal (no assimilation necessary), and folks of modest means simply drive a relatively fuel efficient car, or take a bus, etc.

With the median US household income near $60,000, even if gasoline returns to $4, or even $5 a gallon, it's hardly a Greek tragedy, though the chorus of whining might make you wonder.

Gas at $5 a gallon on on average on a sustained basis would imply oil at something like $160 or so. Is it realistic to think that oil WELL above $100 on a sustained basis won't spur MANY big producers to up both production and exploration by a considerable amount? I vote no.

[onlooker]

So nobody is anticipating a possible crash in the oil price?

[vtsnowedin]

So nobody is anticipating a possible crash in the oil price?

It has crashed before for no good or fundamental reason so you should never say never but at present I see no looming possibility that would make it decline much less crash. Even if some new huge mega field was discovered it would take years to bring it on line and all the mega fields currently producing are controlled by people with no interest in seeing prices fall.
On the other hand I see numerous places in the oil producing regions where political instability could shut off supplies from those regions creating a shortage and the corresponding price spikes.
So on balance I see little down pressure and more then enough up pressure.
The above analysis and advise is worth about two cents.

[Outcast_Searcher]

So nobody is anticipating a possible crash in the oil price?

I've seen predictions all over the place, but the downside predictions look like minor to moderate declines, not crashes.

1). Global demand is expected to continue to increase meaningfully, which on balance, should squeeze supply and prices. This has been the trend for about the past two years.

2). A valid concern peak oil advocates have pointed out is how with low prices in recent years, new oil found isn't replacing what we're using. The best way to fix that is with higher prices to incent the profit motive for more exploration. (e.g. supply, demand, and the pricing function, taking care of business over time, as they have, although erratically, since oil became highly volatile in the 70's).

As vts said, it's not that a crash couldn't happen -- but the factors known, on balance, including geopolitical risks, seem to make increasing prices more likely.

[tita]

Quite a big drop today. -4.5% on the WTI (67.5$) and -3.2% on the Brent (76.3$)

KSA and Russia announced the want to ease the market by increasing output by 1Mb/d, and the latest rig count increased by 13 (15 oil rigs, -2 gas rigs).

I'm not sure of the strategy of KSA here...

[Outcast_Searcher]

Quite a big drop today. -4.5% on the WTI (67.5$) and -3.2% on the Brent (76.3$)

KSA and Russia announced the want to ease the market by increasing output by 1Mb/d, and the latest rig count increased by 13 (15 oil rigs, -2 gas rigs).

I'm not sure of the strategy of KSA here...

Yup. To me, oil dropping meaningfully on that news makes sense. It's been climbing rather steadily through 2018 on net bullish factors, including likely less supply elsewhere.

I'm not sure what you mean by KSA strategy here. Clearly they'd like to sell more at what they consider "reasonable" prices. With Brent recently touching $80, now might be their chance.

If they can increase their market share at, say, $70 or higher Brent, then it's good for them and their national budget. If not, they can always decline to produce more. Once the market doesn't see the extra supply, it should go back to rising again.

OTOH, if they just wait for the price to pass, say, $100 or $120, that might be inviting massive new oil fracking various places. Surely they'd rather not just open the door wide for that competition, at least not any sooner than necessary.

I could be dead wrong, but that's the kind of thinking various articles I've read in recent months have alluded to.

[Tanada]

Quite a big drop today. -4.5% on the WTI (67.5$) and -3.2% on the Brent (76.3$)

KSA and Russia announced the want to ease the market by increasing output by 1Mb/d, and the latest rig count increased by 13 (15 oil rigs, -2 gas rigs).

I'm not sure of the strategy of KSA here...

Yup. To me, oil dropping meaningfully on that news makes sense. It's been climbing rather steadily through 2018 on net bullish factors, including likely less supply elsewhere.

I'm not sure what you mean by KSA strategy here. Clearly they'd like to sell more at what they consider "reasonable" prices. With Brent recently touching $80, now might be their chance.

If they can increase their market share at, say, $70 or higher Brent, then it's good for them and their national budget. If not, they can always decline to produce more. Once the market doesn't see the extra supply, it should go back to rising again.

OTOH, if they just wait for the price to pass, say, $100 or $120, that might be inviting massive new oil fracking various places. Surely they'd rather not just open the door wide for that competition, at least not any sooner than necessary.

I could be dead wrong, but that's the kind of thinking various articles I've read in recent months have alluded to.

You said it better than I could have myself. I agree with your analysis, now is the time for the producers with marginal excess capacity to exploit higher prices for the most benefit. Hopefully they learned the lesson well that attempting to end fracking by opening the taps wide only makes them poorer and plenty of Frackers would still be around afterwards if they tried it again.

[Cog]

I would rate this as a temporary drop in price. Oil consumption is definitely bullish for now. However good time to buy some oil stocks if you think the bleeding has stopped. I do and picked up some more XOM.

[GoghGoner]

$10 spike since OPEC ended it's session two weeks ago.

https://www.cnbc.com/2018/06/29/us-oil-near-3-12-yr-high-markets-remain-tight.html

US crude rises 1%, settling above $74 for first time since Nov 2014 as sanctions on Iranian oil loom

[Outcast_Searcher]

$10 spike since OPEC ended it's session two weeks ago.

https://www.cnbc.com/2018/06/29/us-oil-near-3-12-yr-high-markets-remain-tight.html

US crude rises 1%, settling above $74 for first time since Nov 2014 as sanctions on Iranian oil loom

Sanctions? Not really, Sanctions against Iran have nothing to do with this price explosion. Not when the rest of OPEC (and especially SA) promised just last week to add 1 mbpd.

This is peak. Get over it.

Just making stuff up without any reference to the facts or the timing of things as usual, I see. You're on the internet. You COULD look at the news.

https://www.nasdaq.com/markets/crude-oi ... meframe=1m

First, WTI had slid from about $72 to below $65 on the news that OPEC was going to add supply.

Then the news came out that OPEC was going to raise prices by about a million barrels, on June 22nd. There are all kinds of stories about it like the following link.

https://www.usnews.com/news/business/ar ... n-increase

That day WTI jumped about $3 in response. Given that it had fallen about 10% in response to the news that OPEC/Russia were going to produce more oil, apparently the $1 million wasn't as much additional production as expected, so the price jumped.

Then oil was relatively steady for a couple days as this news was digested by the market.

Then, the 26th, you had the story that the US was telling all countries not to accept oil imports from Iran.

https://www.cnn.com/2018/06/26/politics ... index.html

and from there we've had WTI steadily rise about another $5 a barrel in the past few days.

That's called news events. That's called geopolitics. And the Iranian sanctions are clearly a significant chunk of that whether you deny it or not.

...

And whether it's peak (which we can't know at this point) or not, we DO know the world will continue to demand more oil along with GDP growth, just as it has for many years, which (all things being equal) will tend to push up oil prices over time. Peak or not.

https://www.eia.gov/outlooks/steo/report/global_oil.php

And below the global consumption chart for the decade, the additional production by non-OPEC countries is shown. An additional 4 million BPD in the US for 2016 through 2018, with about a third of that for 2018. How is that peak, again?

Show me a few years of globally declining production. THEN we can talk about the possibility of a peak. Not necessarily THE peak long term, but THAT would at least be a real sign of a peak and not just your endless FUD with zero citations or facts.

[Outcast_Searcher]

Speaking or sanctions and Iran and worries about shortages and the price of oil:

I noticed WTI was down well over $2 again today and wondered why.

Well, it appears that sanctioning Iran isn't that important in this administration (which has an attention span about as long as a gnat's eyebrow), if it might be a wee bit inconvenient.

Naturally, the world takes notice re probably higher oil supply later this year:

Oil falls 3%, below $69, as Treasury says importers may get leeway to buy Iranian crude, despite sanctions

https://www.cnbc.com/2018/07/16/oil-fal ... ivers.html

So much for principle, or doing the "right thing". So much for punishing Iran for its behavior. Oil prices a little high? Up the supply at ANY cost, even while we pretend we have principles.

Just another example of how, even outside pure free market principles, the price of oil matters a LOT to governments. (And thus my premise that ALL the economically frackable oil formations of any size will be fracked (including the areas banned and restricted today) -- it's just a question of what price pulls the necessary levers to get it to happen.

[GoghGoner]

Hmmm... I think $150-200 would be the limit for a temporary spike. No way oil prices could even get close to $400, the world is awash is debt.

https://www.washingtonexaminer.com/policy/energy/expert-makes-the-case-for-400-per-barrel-oil

From the $200 mark, the price of crude oil could surge to a price of $400, he said. Prices currently range from $65-$74 per barrel.

[Yoshua]

The WTI will never rise above 80 USD again.

[Outcast_Searcher]

The WTI will never rise above 80 USD again.

So no logic. No real evidence. Just a stupid chart.

If you weren't wrong in pretty much everything you post, I might give you coin flip odds.

But between the way global demand keeps growing and your track record, you'll likely be proven wrong by 2021.

...

But I know. ETP economic doom.

[Tanada]

The WTI will never rise above 80 USD again.

So no logic. No real evidence. Just a stupid chart.

If you weren't wrong in pretty much everything you post, I might give you coin flip odds.

But between the way global demand keeps growing and your track record, you'll likely be proven wrong by 2021.

...

But I know. ETP economic doom.

I don't think it will take even that long. We have been within spitting distance of $80 a couple times this year, and China continues to ADD about 20 million ICE propelled vehicles every year to world consumption. In the USA we produce about 15 million ICE a year but we also scrap roughly the same number just adding for population growth. in China the demand still greatly exceeds supply, even if only 20% of the population ends up with an ICE vehicle in the next decade that will still be more vehicles that ht e USA+Canada combined! Every one of them is an incremental increase in global demand even though their CAFE standards are much stricter than the USA.

[Pops]

Pretty funny, I was fiddling with my lines on the old Wedgie chart just a day ago.

sorry, it's sloppy. The idea of increasing oscillation is right (red), my frequency was too high but the amplitude might be real low compared to actual (purply black)

[Outcast_Searcher]

The WTI will never rise above 80 USD again.

So no logic. No real evidence. Just a stupid chart.

If you weren't wrong in pretty much everything you post, I might give you coin flip odds.

But between the way global demand keeps growing and your track record, you'll likely be proven wrong by 2021.

I don't think it will take even that long. We have been within spitting distance of $80 a couple times this year, and China continues to ADD about 20 million ICE propelled vehicles every year to world consumption.

Agreed. I was being VERY conservative, lest I be proven wrong in my intuition, that we easily see $80 WTI within a year, if not in 2018.

[ROCKMAN]

“A major shipping route located between Oman and Iran where nearly one-third of the world's sea-traded oil passes through daily may become a new flashpoint after a top Iranian Navy general said Monday that the country has taken full control of the Strait of Hormuz.”

So Iran accuses the US of psychological warfare and then puts out such BS as this. Save any arguments since I won’t waste time with them: the US could sink every Iranian vessel in the S of H without putting a single member of our military at risk. We have the capability:

“The Harpoon is an all-weather, over-the-horizon, anti-ship missile system, developed and manufactured by McDonnell Douglas (now Boeing Defense, Space & Security). In 2004, Boeing delivered the 7,000th Harpoon unit since the weapon's introduction in 1977. The missile system has also been further developed into a land-strike weapon, the Standoff Land Attack Missile (SLAM).”

“In 1988, Harpoon missiles were used by the U.S. to sink the Iranian frigate Sahand during Operation Praying Mantis.”

It has a max range of 170 nautical miles. And can also be launched from a variety of US aircraft. Thus no US vessel needs to be within several thousands of miles of the S of H. Additionally the Harpoon has been modified to strike land based targets and thus take out every Iranian missile battery.

But the global oil patch hopes the world ignores the stupidity of Iran interfering with oil tankers and just the empty threat ramps up the price of oil. Probably our Navy boys hope Iran tries it: they just love to blow shit up. And they have 7,000+ Harpoons just sitting there collecting dust. LOL.

[vtsnowedin]

I doubt they have 7000 still in service ready to go as they have used hundreds of them over the years.
But I take your point that if the Iranian navy took on the USN their floating on the surface life expectancy would be measured in minutes not hours or days.

[GoghGoner]

Sanctions go through and the global economy is running well == $100+ oil again. But, of course, the greater risk is a hard-line takeover in Iran and war in the Middle East. What would be the price of oil then? We aren't too far from witnessing that and oil is fairly cheap still.