meiroy Posted January 20, 2016 Share Posted January 20, 2016 "Reflexivity is a bitch" - not Soros. Link to comment Share on other sites More sharing options...
Uccmal Posted January 20, 2016 Share Posted January 20, 2016 FWIW, On an inflation adjusted basis oil is running very close to the price from 1950 to 1970, and the price for most of the 1990s - excepting the 1998 brief collapse. Nothing to add. Link to comment Share on other sites More sharing options...
TheAiGuy Posted January 20, 2016 Share Posted January 20, 2016 FWIW, On an inflation adjusted basis oil is running very close to the price from 1950 to 1970, and the price for most of the 1990s - excepting the 1998 brief collapse. Nothing to add. Here's the inflation adjusted price of oil going way back: Link to comment Share on other sites More sharing options...
Uccmal Posted January 20, 2016 Share Posted January 20, 2016 I think yours is missing the last couple of weeks. I use these ones and take out the logarithmic effect for clarity: http://www.macrotrends.net/1369/crude-oil-price-history-chart I am unwilling to ascribe any meaning to this. Oversold, panic, new reality... who knows. Link to comment Share on other sites More sharing options...
Jurgis Posted January 20, 2016 Share Posted January 20, 2016 "Reflexivity is a bitch" - not Soros. I'm not sure if we are in the reflexivity area with oil prices. If we are, then a V turnaround is more likely than if we are not. I have to say that current oil prices were not expected by most of the board (me included). I'll go on record predicting that WTI will go above US$50 sometime in 2016. Link to comment Share on other sites More sharing options...
TheAiGuy Posted January 20, 2016 Share Posted January 20, 2016 I can definitely state that I have not been surprised by the oil move. I would be surprised by anything much below $20 or anything much above $120, based on the historical range. There have been wild swings in prices since the 1850s, and its a commodity, so there's not necessarily an upward bias towards prices. Link to comment Share on other sites More sharing options...
investor-man Posted January 20, 2016 Share Posted January 20, 2016 I would be surprised by anything much below $20 or anything much above $120, based on the historical range. Haha, nice range here :) Link to comment Share on other sites More sharing options...
jmp8822 Posted January 20, 2016 Share Posted January 20, 2016 FWIW, On an inflation adjusted basis oil is running very close to the price from 1950 to 1970, and the price for most of the 1990s - excepting the 1998 brief collapse. Nothing to add. Do you think today's price is sustainable long-term? If not, what do you think is the marginal cost of the last million barrels of oil in today's dollars? Wasn't sure if you were suggesting today's price is "correct" or just throwing this out as a random data point. Link to comment Share on other sites More sharing options...
Jurgis Posted January 20, 2016 Share Posted January 20, 2016 I can definitely state that I have not been surprised by the oil move. Another closet predictor with no record of such prediction. Nice to see you. Link to comment Share on other sites More sharing options...
AzCactus Posted January 20, 2016 Share Posted January 20, 2016 I can definitely state that I have not been surprised by the oil move. Another closet predictor with no record of such prediction. Nice to see you. Lol Link to comment Share on other sites More sharing options...
Cardboard Posted January 20, 2016 Share Posted January 20, 2016 What to watch: - API inventory report tonight around 5 pm. You can get the summary on Marketwatch.com. - EIA weekly status report tomorrow at 11 am. From EIA website. Everything has been delayed one day this week due to the Holiday on Monday. IMO, the API inventory numbers will set the tone for tomorrow's trading. Not only for oil but, the stock market since I sense that investors are worried about a U.S. recession. Lower inventories would help indicate normal consumption of energy. So gasoline inventories and distillates will also matter. Lower 48 States production level will also be very important tomorrow. The EIA has to clean up its act at some point here. They have stated that U.S. shale oil production is coming down 100,000 barrels/month. However, it has not been reflected in their weekly status report. A reconciliation has to occur one way or the other. Cardboard Link to comment Share on other sites More sharing options...
NewbieD Posted January 20, 2016 Share Posted January 20, 2016 Bought some oil for the first time today. Level of analysis: The price has declined because of new capacity and lower demand. I think the demand decline can't be big seen over a few years - most oil is used in transportation which won't decline given no wars. The new capacity is Iran and Saudi pumping more, as well as frackers. The frackers seem to need USD 50-60. Saudi will pump less as soon as possible. I think we'll see a higher level, say 40+, within 18 months. Link to comment Share on other sites More sharing options...
Uccmal Posted January 21, 2016 Share Posted January 21, 2016 Oil down another buck on 3 million extra barrels of storage. Cue upset traders: http://brokershandsontheirfacesblog.tumblr.com Link to comment Share on other sites More sharing options...
investor-man Posted January 21, 2016 Share Posted January 21, 2016 Bought some oil for the first time today. Level of analysis: The price has declined because of new capacity and lower demand. I think the demand decline can't be big seen over a few years - most oil is used in transportation which won't decline given no wars. The new capacity is Iran and Saudi pumping more, as well as frackers. The frackers seem to need USD 50-60. Saudi will pump less as soon as possible. I think we'll see a higher level, say 40+, within 18 months. How did you buy the oil? USO? Link to comment Share on other sites More sharing options...
Jurgis Posted January 21, 2016 Share Posted January 21, 2016 Oil down another buck on 3 million extra barrels of storage. Cue upset traders: http://brokershandsontheirfacesblog.tumblr.com OK, fine, I give up. Chalk the bottom. I'm not gonna buy any oil related stocks anymore. I swear, cross my heart. :P .... I said "stocks" didn't I... that doesn't include options, bonds, prefs, nosir... 8) Link to comment Share on other sites More sharing options...
NewbieD Posted January 21, 2016 Share Posted January 21, 2016 Bought some oil for the first time today. Level of analysis: The price has declined because of new capacity and lower demand. I think the demand decline can't be big seen over a few years - most oil is used in transportation which won't decline given no wars. The new capacity is Iran and Saudi pumping more, as well as frackers. The frackers seem to need USD 50-60. Saudi will pump less as soon as possible. I think we'll see a higher level, say 40+, within 18 months. How did you buy the oil? USO? Bought "Long Olja H" from Handelsbanken. Underlying is the LCO Brent futures. Seems similar to USO. Slightly higher feese, but for some reason had better returns. Not sure if it's random noise in how they happened to trade contracts or predictive, see file. Link to comment Share on other sites More sharing options...
Cardboard Posted January 21, 2016 Share Posted January 21, 2016 http://finance.yahoo.com/news/long-positions-fall-cftc-commitment-125847594.html Short positions are highest in last 10 years. Cramer this morning talked about Royal Dutch Shell projects in the Gulf of Mexico that could almost entirely offset declines from U.S. shale oil in 2016. I knew that Gulf production did offset a lot in 2015 but, I have to do more research about 2016. Seems hard to believe on the surface that new production from one company in the Gulf could offset nearly 800,000 barrels/day or 9% of total U.S. production. Cardboard Link to comment Share on other sites More sharing options...
TheAiGuy Posted January 21, 2016 Share Posted January 21, 2016 I can definitely state that I have not been surprised by the oil move. Another closet predictor with no record of such prediction. Nice to see you. Yeah, that's definitely fair. ;) I just meant that the move isn't surprising -- I didn't have a prediction of oil prices (and still don't) -- but its the type of thing that happens in commodities markets all the time and thus, shouldn't be *surprising*. Link to comment Share on other sites More sharing options...
Cardboard Posted January 21, 2016 Share Posted January 21, 2016 Well, I can't find positives in either report. Maybe that oil was just too beaten up and now it is still going up? Troublesome to see inventories still climbing including products. Maybe that the rate is less than expected considering the global glut and time of year for gasoline and distillates? Actually distillates were down 1 million barrels or likely in-line with more normal winter conditions picking up. What annoys me more is this tiny decline of 3,000 barrels/day for Lower 48 States production. Maybe that Cramer is right about Shell but, when I compare to the entire Alaskan production of 532,000 barrels/day that seems way too big again for one operation in the Gulf. I don't know anymore. Cardboard Link to comment Share on other sites More sharing options...
kfh227 Posted January 21, 2016 Share Posted January 21, 2016 Production needs to drop. And that will happen by attrition. That is, current wells will continue to produce since the capital outlays were made anyway. And the companies need to service the debt they have. But eventually, production will be reduced and supply/demand will improve and bring oil prices back up. That one issue with price. The other is the strength in the US dollar. There is a strong correlation between the value of the US dollar and the price of oil. This is because of the ol' petrodollar. Most oil is traded in US dollars. So more oil can be had for less when the US dollar is strong. So there are two issues: Strong US dollar and oversupply. Now if you can determine when oil production will drop and/or when the US dollar will fall you can then start making predictions about future oil prices. Oil production will fall In the next 5 years. This will happen because of attrition. But the US dollar? I have a feeling that it will be strong for a while. Spoiler: Figure out when each and every oil company that is financially weak will go under and what will happen to their assets. And determine their impact on supply. And factor that in also. So, god knows when oil prices will go up (or down). This is why Buffet has a "to hard" pile. Link to comment Share on other sites More sharing options...
investor-man Posted January 21, 2016 Share Posted January 21, 2016 Well, I can't find positives in either report. Maybe that oil was just too beaten up and now it is still going up? Troublesome to see inventories still climbing including products. Maybe that the rate is less than expected considering the global glut and time of year for gasoline and distillates? Actually distillates were down 1 million barrels or likely in-line with more normal winter conditions picking up. What annoys me more is this tiny decline of 3,000 barrels/day for Lower 48 States production. Maybe that Cramer is right about Shell but, when I compare to the entire Alaskan production of 532,000 barrels/day that seems way too big again for one operation in the Gulf. I don't know anymore. Cardboard You know much more about this stuff than I do, but can we not expect inventories to keep climbing? I read somewhere that traditionally in February refineries shutdown for repairs, which causes inventories to rise. Seems like inventories will keep rising until at least March. Link to comment Share on other sites More sharing options...
Uccmal Posted January 21, 2016 Share Posted January 21, 2016 http://finance.yahoo.com/news/long-positions-fall-cftc-commitment-125847594.html Short positions are highest in last 10 years. Cramer this morning talked about Royal Dutch Shell projects in the Gulf of Mexico that could almost entirely offset declines from U.S. shale oil in 2016. I knew that Gulf production did offset a lot in 2015 but, I have to do more research about 2016. Seems hard to believe on the surface that new production from one company in the Gulf could offset nearly 800,000 barrels/day or 9% of total U.S. production. Cardboard Doesn't a huge short position in this type of circumstance usually indicate a rally is at hand. i.e. the point of maximum pessimism. Link to comment Share on other sites More sharing options...
goldfinger Posted January 21, 2016 Share Posted January 21, 2016 Well, I can't find positives in either report. Maybe that oil was just too beaten up and now it is still going up? Troublesome to see inventories still climbing including products. Maybe that the rate is less than expected considering the global glut and time of year for gasoline and distillates? Actually distillates were down 1 million barrels or likely in-line with more normal winter conditions picking up. What annoys me more is this tiny decline of 3,000 barrels/day for Lower 48 States production. Maybe that Cramer is right about Shell but, when I compare to the entire Alaskan production of 532,000 barrels/day that seems way too big again for one operation in the Gulf. I don't know anymore. Cardboard You know much more about this stuff than I do, but can we not expect inventories to keep climbing? I read somewhere that traditionally in February refineries shutdown for repairs, which causes inventories to rise. Seems like inventories will keep rising until at least March. The us has imported something like 590k barrels since last week (eia). Production from na is actually falling. Link to comment Share on other sites More sharing options...
Cardboard Posted January 22, 2016 Share Posted January 22, 2016 It will take some time for new Iranian oil to make it to markets: http://www.reuters.com/article/us-oil-iran-exports-idUSKCN0UZ1VI Cardboard Link to comment Share on other sites More sharing options...
opihiman2 Posted January 25, 2016 Author Share Posted January 25, 2016 http://gregmankiw.blogspot.com/2016/01/putting-oil-prices-in-perspective.html Another way to adjust oil prices for inflation. It is interesting to see that even after several decades, oil prices have no noticeable upward trend. Link to comment Share on other sites More sharing options...
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