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Re: THE Price of Crude pt 14

Unread postPosted: Tue 18 Dec 2018, 21:36:19
by asg70
pstarr wrote:I'd call that spot on.


Hardly. The yearly average is off to such an extent that prices would have had to go way into the negative for Short to have won his bet. ETP is dead.

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Re: THE Price of Crude pt 14

Unread postPosted: Thu 20 Dec 2018, 05:49:28
by GoghGoner
The midland spot price is below $40. Those Texas shale drillers are going to be hurting really bad on their financials if this continues.

https://pbs.twimg.com/media/DutzoXHW0AEv63o.jpg:large

Re: THE Price of Crude pt 14

Unread postPosted: Mon 24 Dec 2018, 14:14:24
by onlooker
My esteemed Mr. Cog are you sweating now? It is down to $42

Re: THE Price of Crude pt 14

Unread postPosted: Mon 24 Dec 2018, 15:17:37
by Cog
onlooker wrote:My esteemed Mr. Cog are you sweating now? It is down to $42


Close only counts in hand grenades and nuclear warfare. Let's just say the price of oil has my full attention now. ;)

Re: THE Price of Crude pt 14

Unread postPosted: Wed 26 Dec 2018, 12:30:36
by Outcast_Searcher
GoghGoner wrote:The midland spot price is below $40. Those Texas shale drillers are going to be hurting really bad on their financials if this continues.

https://pbs.twimg.com/media/DutzoXHW0AEv63o.jpg:large

There is a reason that over time, supply and demand for virtually ALL commodities tends to stay in rough balance. Prices send signals to producers and consumers, to incent them to produce and consume in some relatively sane proportion compared to availability.

It's not magic, and it's a far from perfect system, especially in the short term, but overall it works very well indeed.

Pretending that catastrophe will ensure every time there is a significant blip is just silly. Surely there are more productive hobbies for people to have. (I am presuming that decades of predictions that are horrible the vast majority of the time, re doom, aren't overly productive, even if they are entertaining for folks who enjoy dreaming of the zombie hordes -- and even imagining that they'll prosper vs. the zombies).

Re: THE Price of Crude pt 14

Unread postPosted: Wed 26 Dec 2018, 13:11:48
by Cog
Oh the noes. WTI OIL up 7% to 45.75. Bad news for shorty.

Re: THE Price of Crude pt 14

Unread postPosted: Thu 27 Dec 2018, 09:59:56
by dolanbaker
It's going south again, looks like the correction isn't complete yet.
Will be interesting to see where it levels out, will it remain above the lows of the last GFC for example.
Will there be another round of QE to save the day.

Re: THE Price of Crude pt 14

Unread postPosted: Thu 27 Dec 2018, 12:54:10
by Pops
Yeah, end of the world, lowest price since...
Last year.

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Re: THE Price of Crude pt 14

Unread postPosted: Thu 27 Dec 2018, 19:28:04
by Outcast_Searcher
dolanbaker wrote:It's going south again, looks like the correction isn't complete yet.
Will be interesting to see where it levels out, will it remain above the lows of the last GFC for example.
Will there be another round of QE to save the day.

Aside from the panickers who like to run around and proclaim the world is ending with every economic blip, where are there any signs there are any days that need saving, much less any significant problem?

News flash. Stock markets are volatile -- that means they go up, AND DOWN. Same as it ever was.

The great recession mess got to be a significant problem in the fall of 2008, because it looked like various large institutions failing could cause a cascade effect, so there was a confidence problem.

Why does the market falling a percent or three on a given day in a nice orderly process come remotely close to that.

As of 12/20/18, the forward S&P 500 ratio had fallen to a relatively moderate 14.5.

https://www.yardeni.com/pub/mktbriefsppesecind.pdf

Don't like forward estimates? The S&P 500 ratio (based on the past year's earnings) has fallen from over 24 at the highs in '17 and '18 to a little over 19 now. Still higher than average, but much more reasonable.

https://www.macrotrends.net/2577/sp-500 ... ings-chart

http://www.multpl.com/

Only in the land of nearly constant spreading of false economic doom would that constitute the need to panic or save the day.

At some point, if prices go low enough, this will represent a good buying opportunity.

Looking at a 5 year chart and a 10 year chart for the major US indexes, I'm inclined to be patient, but definitely feel better about the relative value of the stock market than I have in years.

Re: THE Price of Crude pt 14

Unread postPosted: Thu 27 Dec 2018, 19:38:28
by Cog
If the economy is in serious trouble you would have seen it in unemployment numbers by now. Unemployment is stable. This correction is fear based on what might happen, not what has happened. We do not know about China and how that trade negotiation will work out or what this new Democrat House has in mind. We will have some 4th quarter GDP numbers in a month, so we will see if there is anything untoward happening with the real economy.

Re: THE Price of Crude pt 14

Unread postPosted: Thu 27 Dec 2018, 19:46:23
by Outcast_Searcher
Cog wrote:If the economy is in serious trouble you would have seen it in unemployment numbers by now. Unemployment is stable. This correction is fear based on what might happen, not what has happened. We do not know about China and how that trade negotiation will work out or what this new Democrat House has in mind. We will have some 4th quarter GDP numbers in a month, so we will see if there is anything untoward happening with the real economy.

Sounds perfectly reasonable, and I agree completely re the fear aspect. The good news there is that if actual bad things don't materialize, historically such pullbacks have been relatively brief.

The other good news is if this pullback turns out to be long and deep, then eventually I should be able to buy some good stock indexes relatively cheaply. I was buying QQQ (proxy for NASDAQ 100) hand over fist in the low 20's when it bottomed in 2002, by ramping my monthly DCA amount way up. My rationale was that computers and related tech were NOT going away, no matter how much investors panicked so the question was how long a recovery in the stocks as a group would take -- not whether it would happen.

But then, I don't get up each day believing "this is the end of the financial world", so I guess I'm biased. :roll:

Re: THE Price of Crude pt 14

Unread postPosted: Thu 21 Mar 2019, 08:23:02
by GoghGoner
Time to stop panicking over low prices and worry incessantly about high prices :P

Oil prices almost up $20 since the middle of December. Another $20 and maybe this site starts getting a little busy again.

Re: THE Price of Crude pt 14

Unread postPosted: Thu 21 Mar 2019, 08:33:27
by vtsnowedin
"What? Me worry?" 8)

Re: THE Price of Crude pt 14

Unread postPosted: Sat 01 Jun 2019, 09:27:14
by GoghGoner
Oil prices down $10 the past two weeks. Financial markets are down the past month. I haven't been following supply news too much but from what I know this may be caused by demand issues. We will see what happens but if the demand weakness is temporary, we will probably see a recovery by the fall. With rig counts in NA down significantly yoy, this sudden drop in price will cause further disparities in counts.

I like the cheaper gasoline prices but I wanted to test my theory that $100 oil wouldn't be matched with an increase in US rig counts. Oh well, enjoy it will it lasts -- the time will come to test my theory soon enough.

Re: THE Price of Crude pt 14

Unread postPosted: Tue 04 Jun 2019, 03:15:27
by Outcast_Searcher
GoghGoner wrote:Oil prices down $10 the past two weeks. Financial markets are down the past month. I haven't been following supply news too much but from what I know this may be caused by demand issues. We will see what happens but if the demand weakness is temporary, we will probably see a recovery by the fall. With rig counts in NA down significantly yoy, this sudden drop in price will cause further disparities in counts.

I like the cheaper gasoline prices but I wanted to test my theory that $100 oil wouldn't be matched with an increase in US rig counts. Oh well, enjoy it will it lasts -- the time will come to test my theory soon enough.

Sigh. If you would read this thing called "the news", it's not difficult to see that there's a broad consensus (among economists who look at data instead of just making things up), that this is largely CONCERN about a weaker global economy due to the likely looking trade wars brewing (courtesy of Trump ratcheting things up recently) -- and what that could do to global oil demand.

And those same economists and other stock market watchers are assigning much of the down move in stocks to the same concerns.

With a possible war with Iran seeming less likely with Trump apparently backing off on the rhetoric there, that might also be contributing to downward pressure on oil prices, IMO.

There isn't some big, overall "supply issue" or "demand weakness" that seems to be causing this. It's concerns about the future, at least for now.

Re: THE Price of Crude pt 14

Unread postPosted: Tue 04 Jun 2019, 06:03:16
by GoghGoner
There isn't some big, overall "supply issue" or "demand weakness" that seems to be causing this. It's concerns about the future, at least for now.


I disagree. This move is based partly on the fundamentals and coincides with some counter-seasonal builds in inventories. This is the classic weak demand price crash that we have witnessed many times in the past. The only question is how long the weakness lasts.

Re: THE Price of Crude pt 14

Unread postPosted: Thu 06 Jun 2019, 05:39:08
by GoghGoner
My gosh that was a massive build in US total stocks yesterday -- 22 mb.

Brent briefly went below $60 and WTI went below $51.

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Re: THE Price of Crude pt 14

Unread postPosted: Thu 06 Jun 2019, 10:20:54
by rockdoc123
This move is based partly on the fundamentals and coincides with some counter-seasonal builds in inventories. This is the classic weak demand price crash that we have witnessed many times in the past


It is not a demand issue but one of over-supply as has been pointed out by a number of articles:

U.S. crude, gasoline and distillate stocks rose last week, the Energy Information Administration said on Wednesday. Crude inventories USOILC=ECI rose 6.8 million barrels in the week to May 31, compared with analyst expectations for a decrease of 849,000 barrels. across-the-board inventory builds makes for a very bearish report," said John Kilduff, a partner at Again Capital. A surge in imports and a increase in domestic production boosted inventories, he said. "The inventory gains came despite strong demand for crude oil from refiners and gasoline from drivers," he said.

The rise in refinery runs has paled in comparison to the jump in imports, particularly waterborne imports to the Gulf and West Coasts, said Matt Smith, director of commodity research at ClipperData


US crude oil production as estimated by the Energy Information Administration showed that production for the week ending May 24 rose to 12.3 million bpd, resuming its all-time high that was originally hit the week of April 26.


Higher production, rise in refinery outputs and increased imports have all conspired to raise the amount of oil available for this time of year. Demand is as strong as it has been, just not strong enough to make up for the increased supply.

Re: THE Price of Crude pt 14

Unread postPosted: Fri 07 Jun 2019, 06:14:07
by GoghGoner
No. Globally supply has barely increased. Definitely demand when looking at the bigger picture in commodities.