Crude Oil Prediction 2018
- Thread starter radha00027
- Start date
Seeing no reaction to this yet. Must be a nothingburger.
https://www.reuters.com/article/us-...f-us-navy-does-not-belong-there-idUSKCN1LC0N0
"...Separately, the head of the navy of Iran’s Revolutionary Guards, General Alireza Tangsiri, said on Monday that Iran had full control of the Gulf and the U.S. Navy did not belong there, according to the Tasnim news agency...."
https://www.reuters.com/article/us-...f-us-navy-does-not-belong-there-idUSKCN1LC0N0
"...Separately, the head of the navy of Iran’s Revolutionary Guards, General Alireza Tangsiri, said on Monday that Iran had full control of the Gulf and the U.S. Navy did not belong there, according to the Tasnim news agency...."
Bearish. (I think)
The relative increase in the value of the US dollar against EM currencies is going to be hurting them in 2 ways.
1. Oil is becoming more expensive which is bearish for demand.
2. US dollar denominated debt is also going to be more difficult to pay back, in turn drawing more money out of the country, which will hurt.
If the Emerging Markets go into a crisis, this will spread to those lenders who own the debt, as they begin to fail on payments. The owners of the debt are mainly US financials. If US financials come down, so does everything else.
On the bullish side, Iranian sanctions, limited spare capacity, reduced investment in new oil production.
Iranian Sanctions
Trump is not going to want to see too much of an increase in the price of oil because of the correlation between US gasoline prices and a Presidents popularity (especially as we approach the midterms), therefore, he could change his mind on the sanctions or provide wavers to relieve pressure on the market, which will bring down prices.
Limited Spare Capacity
In July of this year Saudi Arabia reduced its oil production because it was unable to find buyers for its oil. I think that this is indicative of the fact that supply is well balanced with demand (at least in the short term). Also, any losses can be replaced with increased US Shale output, provided the Permian bottlenecks don't cause an issue (again, not a challenge in the short term).
Reduce Investment
This is not an issue in the short term, and the reduced capacity of aging oil fields. Again, this is not an issue in the short term.
WOULD LOVE TO HEAR ANY THOUGHTS.
The relative increase in the value of the US dollar against EM currencies is going to be hurting them in 2 ways.
1. Oil is becoming more expensive which is bearish for demand.
2. US dollar denominated debt is also going to be more difficult to pay back, in turn drawing more money out of the country, which will hurt.
If the Emerging Markets go into a crisis, this will spread to those lenders who own the debt, as they begin to fail on payments. The owners of the debt are mainly US financials. If US financials come down, so does everything else.
On the bullish side, Iranian sanctions, limited spare capacity, reduced investment in new oil production.
Iranian Sanctions
Trump is not going to want to see too much of an increase in the price of oil because of the correlation between US gasoline prices and a Presidents popularity (especially as we approach the midterms), therefore, he could change his mind on the sanctions or provide wavers to relieve pressure on the market, which will bring down prices.
Limited Spare Capacity
In July of this year Saudi Arabia reduced its oil production because it was unable to find buyers for its oil. I think that this is indicative of the fact that supply is well balanced with demand (at least in the short term). Also, any losses can be replaced with increased US Shale output, provided the Permian bottlenecks don't cause an issue (again, not a challenge in the short term).
Reduce Investment
This is not an issue in the short term, and the reduced capacity of aging oil fields. Again, this is not an issue in the short term.
WOULD LOVE TO HEAR ANY THOUGHTS.
Attachments
What's that based on Mickey? Would be interested in hearing your thoughts.
Numerous barometer bellwethers for commodities which I follow.
Using Google chromebooks which is linked to the cloud I have created a large spreadsheet which downloads automatically data of a large range of commodities including energy.
Yesterdays energy bellwethers showed signs of a large across the board selloff.
I hope I don't have to eat humble pie, stirrings of a bounce on oil near close today, could that be due to the USD which had a very nice upmove on the labor employment report.
https://www.reuters.com/article/uk-...port-but-trade-tensions-persist-idUSKCN1LN02O
When you say bounce do you mean a bottom?
I would've thought that the strength of the US dollar and the price of oil would've been inversely proportional. As the dollar does up, demand drops due to oil being more expensive, relative to a countries currency.
Correlation between USD & oil is not consistent, inverse/proportional only sometimes.
Price action of the day with lower lows and lower highs but closing at the top of the bar after moving up all day.