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Me thinks oil is headed for the shitter. And it takes a hell of a better price than $50 to get thousands of rigs out of mothballs.You could buy the dip and short the rallies on oil. Buy at $40. Sell at $48. Oil is trapped in a range. As soon as it gets up close to $50 everyone and their grandma starts pumping and drilling like there's no yesterday. There are fits and starts along the way but eventually oversupply will cause it to drop back to $40.
Me thinks oil is headed for the shitter. And it takes a hell of a better price than $50 to get thousands of rigs out of mothballs.You could buy the dip and short the rallies on oil. Buy at $40. Sell at $48. Oil is trapped in a range. As soon as it gets up close to $50 everyone and their grandma starts pumping and drilling like there's no yesterday. There are fits and starts along the way but eventually oversupply will cause it to drop back to $40.
Me thinks oil is headed for the shitter. And it takes a hell of a better price than $50 to get thousands of rigs out of mothballs.You could buy the dip and short the rallies on oil. Buy at $40. Sell at $48. Oil is trapped in a range. As soon as it gets up close to $50 everyone and their grandma starts pumping and drilling like there's no yesterday. There are fits and starts along the way but eventually oversupply will cause it to drop back to $40.
Here's a typical story that I've seen replayed a few times.
Oil price jumps to $49 US a barrel as EIA data shows less crude pumped
Oil price jumps on data (less crude oil being pumped).
Oil price falls on data (oversupply).
It seems to be settling into a regular cycle. But, there's no hard and fast rule to anything. Obviously, william the wie and Toro are going to keep an eye on the dip buying and rally shorting formula and remain flexible and responsive to changing conditions.
One thing to keep an eye on with oil is Iran, and the possibility that the lifting of sanctions could flood the market with their oil.
Me thinks oil is headed for the shitter. And it takes a hell of a better price than $50 to get thousands of rigs out of mothballs.You could buy the dip and short the rallies on oil. Buy at $40. Sell at $48. Oil is trapped in a range. As soon as it gets up close to $50 everyone and their grandma starts pumping and drilling like there's no yesterday. There are fits and starts along the way but eventually oversupply will cause it to drop back to $40.
Here's a typical story that I've seen replayed a few times.
Oil price jumps to $49 US a barrel as EIA data shows less crude pumped
Oil price jumps on data (less crude oil being pumped).
Oil price falls on data (oversupply).
It seems to be settling into a regular cycle. But, there's no hard and fast rule to anything. Obviously, william the wie and Toro are going to keep an eye on the dip buying and rally shorting formula and remain flexible and responsive to changing conditions.
One thing to keep an eye on with oil is Iran, and the possibility that the lifting of sanctions could flood the market with their oil.
Two rules of thumb:Yeah, I suspect that this September is going to be ugly for the Stock Market. I just hope that there isn't a sell off panic.
Many investors have been lulled into complacency by the extraordinary actions taken by central banks and governments over the last six years. The question thinking people must ask is, have these actions really worked or merely masked over major flaws and problems? I continue to see a major flaw in this so called "recovery" in that by not demanding the right kind of growth andsimply by throwing money at problems we have only delayed and added to festering issues that face us in the future.
I have seen and heard far too many comments by those bullish on higher equity prices and ever higher markets basing their strategy on a policy of "don't fight the Fed" and "buy the dips." While this has worked since 2009 it is no guarantee that it will continue to produce results in the future. The "buy the dip mantra" will prove very costly when a real drop in the market does occur. More on this subject in the piece below.
http://brucewilds.blogspot.com/2015/03/buy-dip-mentality-explodes.html
Bearish sentiment spiked Friday (Mark Hulbert's column at MarketWatch). World manufacturing PMI is just barely above contraction. What seems to be happening is the US stock market is going up mostly on international hot money. That is about the only thing that makes sense given the reaction to not raising the Fed funds rate.I don't think this is a "dip". I don't think the SE IS anywhere NEAR the bottom.
The comments by deputy crown prince Mohammed bin Salman are seen as a challenge to Iran. It has vowed to increase oil production following the lifting of Western sanctions. In the Bloomberg interview, the prince also spoke about his plan for a giant public investment fund. Worth more than $2 trillion, it would be designed to reduce Saudi Arabia's reliance on income from oil. Part of the plan would be a sale of shares in the state-owned oil firm Aramco, which could start as soon as next year, according to the interview.
Production freeze
Iran will not take part in a conference in Doha on 17 April, where the freezing of oil output is due to be discussed. "If all countries agree to freeze production, we will be among them," the prince told Bloomberg. When asked whether Iran needed to be among those countries he said "without doubt" Oil prices, which had edged into positive territory, fell after the Prince's comments. Brent crude fell $1.63 cents, or 4%, to $38.70 a barrel. Prices rose 6% in the first three months of this year - the first quarterly increase since a 15% rally between April and June 2015.
Hopes dashed
PVM Oil Associates analyst Tamas Varga said there had been high hopes about the impact of a possible production freeze, but he added: "It is hard to see how sticking to the January output level would be supportive for oil prices. There will be no rebalancing this year." Shailaja Nair, of energy information provider, said the market was still oversupplied with crude and there was no possibility of demand increasing in the short term. "Considering the amount of crude already in the market, a freeze is not going to make much of a difference," she said.
A monthly survey by Reuters this week showed that oil output from the 13 Opec members rose in March on higher production from Iran and near-record exports from southern Iraq. Iraq reported Opec's biggest supply growth last year, producing more than four million barrels per day - making it the cartel's second-largest producer after Saudi Arabia. In February, Saudi Arabia and Russia said they would freeze oil output at January levels if other producers followed suit. Oil prices have plunged from their recent peak of $116 in June 2014 because of oversupply and sluggish demand.
Oil prices slump on Saudi comments - BBC News
Oil slumps on oversupply fears...
Oil prices slump on Saudi comments
Fri, 01 Apr 2016 - Oil prices fall sharply after Saudi Arabia says it will freeze production only if Iran and other major producers do the same.
The comments by deputy crown prince Mohammed bin Salman are seen as a challenge to Iran. It has vowed to increase oil production following the lifting of Western sanctions. In the Bloomberg interview, the prince also spoke about his plan for a giant public investment fund. Worth more than $2 trillion, it would be designed to reduce Saudi Arabia's reliance on income from oil. Part of the plan would be a sale of shares in the state-owned oil firm Aramco, which could start as soon as next year, according to the interview.
Production freeze
Iran will not take part in a conference in Doha on 17 April, where the freezing of oil output is due to be discussed. "If all countries agree to freeze production, we will be among them," the prince told Bloomberg. When asked whether Iran needed to be among those countries he said "without doubt" Oil prices, which had edged into positive territory, fell after the Prince's comments. Brent crude fell $1.63 cents, or 4%, to $38.70 a barrel. Prices rose 6% in the first three months of this year - the first quarterly increase since a 15% rally between April and June 2015.
Hopes dashed
PVM Oil Associates analyst Tamas Varga said there had been high hopes about the impact of a possible production freeze, but he added: "It is hard to see how sticking to the January output level would be supportive for oil prices. There will be no rebalancing this year." Shailaja Nair, of energy information provider, said the market was still oversupplied with crude and there was no possibility of demand increasing in the short term. "Considering the amount of crude already in the market, a freeze is not going to make much of a difference," she said.
A monthly survey by Reuters this week showed that oil output from the 13 Opec members rose in March on higher production from Iran and near-record exports from southern Iraq. Iraq reported Opec's biggest supply growth last year, producing more than four million barrels per day - making it the cartel's second-largest producer after Saudi Arabia. In February, Saudi Arabia and Russia said they would freeze oil output at January levels if other producers followed suit. Oil prices have plunged from their recent peak of $116 in June 2014 because of oversupply and sluggish demand.
Oil prices slump on Saudi comments - BBC News
