How Low Will CL Go Between Jan 1 2016-Dec 31 2017?
- Thread starter LacesOut
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Everyone is expecting a quick rebound over $50 and up to $60 - $70. Nobody can make money below $50 so oil has to go over $50. Unfortunately, that's not how it works. Price doesn't adjust to the producers, the producers adjust to the price. Huge spec longs right now in oil after a big short covering rally. Exxon is at $84, just 16% off highs. This doesn't look like much of a bear market. People think this bear market will be like 2008-9. Totally different. Get this: Permian basin production is still growing. It's 2016 and PErmian productino is still growing. Nuts.
I'm on record the Jan 2017 will hit $70. But I made that when it was at a low $50 back in 2015. There is something the opposite of demand destruction. The world just stops working properly when CL goes below $30 (or above $100) but it can dip and rally more than anybody ever thought possible. Many of us remember an 8 handle.
Sinopec and Petrochina have seen lower demand in China. There's just no demand out there. CRB chart is at 25 year lows. People haven't come to grips with the fact that China catchup growth was just a brief blip within a relentless deflationary trend world. Amd now China will be exporting deflation.
Kuwait provided the latest blow when the acting oil minister said that production could restart in the Khafji oil field.
The 300,000 barrel-a-day field, which is jointly operated by state-owned oil companies Kuwait Gulf Oil Co. and Saudi Arabia’s Aramco Gulf Operations Co., has been closed since October 2014.
Traders said the announcement raises questions about an April 17 meeting of major producers in Doha, Qatar, to discuss a production freeze. Those talks had been a primary driver of the recent rally that boosted oil futures more than 50% in about six weeks.
http://www.wsj.com/articles/oil-prices-fall-ahead-of-u-s-oil-inventory-data-yellen-speech-1459246774
The 300,000 barrel-a-day field, which is jointly operated by state-owned oil companies Kuwait Gulf Oil Co. and Saudi Arabia’s Aramco Gulf Operations Co., has been closed since October 2014.
Traders said the announcement raises questions about an April 17 meeting of major producers in Doha, Qatar, to discuss a production freeze. Those talks had been a primary driver of the recent rally that boosted oil futures more than 50% in about six weeks.
http://www.wsj.com/articles/oil-prices-fall-ahead-of-u-s-oil-inventory-data-yellen-speech-1459246774
If you ever wanted a good old fashioned Superbowl of Supply vs Demand, this is it. But I don't bet on sports that are not regulated unless I know for sure who is fixing it.
China has been exporting deflation for the last 25 years though, no?
What's different?
I think the lows are in, I don't have an opinion of why, just trading my Trading Plan and was buying/hedging as energies made lower lows. For myself, my opinions are the worst and why I am a systems trader.
Supply/Demand are useless, we all use same amount of gas, maybe even more when this cheap and yet the refineries were not allowing gas to go too low, at the pump it should have been lower. Price of anything goes by what we willing to spend on it.
Can you imagine if USA stopped buying crude oil from overseas? LOL Then there crude drop to ten bucks or lower.
Supply/Demand are useless, we all use same amount of gas, maybe even more when this cheap and yet the refineries were not allowing gas to go too low, at the pump it should have been lower. Price of anything goes by what we willing to spend on it.
Can you imagine if USA stopped buying crude oil from overseas? LOL Then there crude drop to ten bucks or lower.
not if you look at the CRB, which has done a round trip and is at 170, down from 450 . . . for a long time China was creating commodity inflation. now the inflation is turning into deflation as commodities start to drag rest of economy down. I don't think people have really come to grips with the fact that China is no longer going to be adding a third airport in a fourth tier city.
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I agree with Modern Trader magazine,2016 TX TEA trades from estimated $27 to $70/+; not in straight line or NOT a prediction.GS estimate from $20-40 ;maybe a bit higher than that ;NOT a prediction.