Crude Oil Spikes Most In 7 Weeks As Iran Nuclear Deal Hopes Fade

With the WTI-Brent spread at 8-month wides, RINs having collapsed, and US investors buoyed by gas prices at the pump near recent lows, the surge in crude oil prices today - by their most since October 2nd - may take some of the 'tax-cut' punch from the party (remember gas prices are still 11.4% above recent seasonal norms). The 2% jump in WTI (and 1.85% rise in Brent over the last 2 days) may have only pushed it back to one-week highs but breaks a trend of lower prices that many have hoped would persist. Desk chatter is that much of this move is a re-up of middle-east premia as Iran's nuclear negotiator says no deal today.

Bear in mind that despite the euphoria over lower gas prices, they are still 11.4% above seasonal norms of the last 5 years...

Comments

[LetThemEatRand]

Bearish for Gold.  Because everything is bearish for Gold, apparently.  

[FieldingMellish]

Bullish for stawks. Because everything is bullish for stawks, apparently.

[Say What Again]

Did Icahn make any tweets about this shit lately?

[FieldingMellish]

Not sure but I think Ben made a tweet about a shit he made lately.

[TalkToLind]

Any quesy physical gold holders out there please sell bullion to me;  I've got Bitcoins!

[max2205]

Nukem ya hoooo

[USS Bernanke]

Honest, Integrity, Price-Discovery, Free Market, Non-Manipulated crude oil market.

http://www.bloomberg.com/news/2013-11-06/brent-crude-traders-claim-proof...

[Dr. Engali]

Looks like its time to send in the drones and bomb some brown people.

[Headbanger]

Which ones this time??

[Seize Mars]

Wait, there's a connection between the price of oil, and killings/invasions?
Uh...

[GrinandBearit]

Fucking speculators need to DIE!

[CrashisOptimistic]

Speculators are the only thing keeping the price down.

[pound the vix]

Higher gas prices, Higher interest rates, Target missed numbers, Kohls misses numbers, Dollar General Misses numbers, Sears misses numbers, Philly Fed misses employment numbers, JCP cant make a profit, consumer getting killed by healthcare cost, college cost, food inflation, wages stagnet at best.

Walmart still at highs?????

[orangegeek]

WTI Oil has been sliding for a while

http://bullandbearmash.com/chart/wti-oil-daily-marginally-outlook-bearis...

This move up is an expected correction.

[Haager]

Yes. And the news is just a desperate attempt to 'explain' the move on  funny mentals.

[CrashisOptimistic]

Fundamental truth revealed:   Iran is/was not desperate.

All stories in the media about sanctions usually prepend the word "choking".  They export almost 2 million bpd.  They sell it for something other than dollars.  They are not choking.

The agenda of the EU and the US to label that number lower is to support the "choking" meme.  Truth is economies have no chance above $85/barrel and North Dakota will be rolling over soon. 

Obama is the one who is desperate.

[pound the vix]

When has any leader in the middle east cared if their citizens were hurting???

[CrashisOptimistic]

That would be Saudi Arabia, who two years ago began domestic spending 3X proportionally what the US spends.  That placates the citizens -- aka, cares about them not hurting so they don't revolt.

[Flakmeister]

The real take away is that oil is more expensive YoY....

The bump in US production has not reduced the price except for areas benefitting from the lack of infrastructure needed to get the oil to the global market...

Came across this from a petroleum geologist with the handle Westexas:

Of course, the incremental increase in global crude oil production, in excess of of the 2005 annual rate, was some very, very expensive oil.

The cumulative increase in global crude oil (Crude + Condensate) production, in the seven year period from 1998 to 2005, in excess of what we would have produced at the 1998 production rate of 67.0 mbpd (million barrels per day, EIA), was 6.3 Gb (billion barrels). Steven Kopits estimated that cumulative global upstream (oil exploration and production) capital costs were $1.5 Trillion in the seven year period from 1998 to 2005.

Of course, the total upstream capital expenditures were used to both offset declines from existing production and to show a net increase in production, but I am primarily interested in the difference between the 1998 to 2005 increase in global crude oil production versus the 2005 to 2012 increase in global crude oil production.

The cumulative increase in global crude oil production, in the seven year period from 2005 to 2012, in excess of what we would have produced at the 2005 production rate of 73.6 mbpd (million barrels per day, EIA), was 0.3 Gb. Steven Kopits estimated that cumulative global upstream capital costs were $3.5 Trillion in the seven year period from 2005 to 2012.

Note that cumulative upstream capital costs increased by 133% from the 1998 to 2005 time period to the 2005 to 2012 time period, but the corresponding increase in cumulative production (relative to 1998 and 2005 respectively) fell by 95%.

Therefore the global upstream capital costs necessary to offset production declines from existing wells and to add one new barrel of cumulative production in the 2005 to 2012 time period was 39 times what was necessary to offset production declines from existing wells and to add one new barrel of cumulative production in the 1998 to 2005 time period–in terms of capital costs per barrel of new cumulative production.

[LawsofPhysics]

exponential equations are a bitch.

[Flakmeister]

Yep....

So are logistic curves....

[ActionFive]

Yeah, looks higher than last year at this time anyway. Crude should look like Btc not GLD.

Production figures? Sure, like a made up production- There were probably enough to burn sitting short, so They made up a news story and will run it up against them for a week. Then they will short that hard to burn the BTFDer's for a few weeks to attract some new shorts along with a new bearish news story which they will then raise the price before OPEX to make options expire worthless.

But thinkin the pump price will stay lowish throughout this to make holiday retail look better than expected which is why crude is at this price now- They set the dial to low 90's.

[vote_libertaria...]

UN-LEASH THE MC-CRACKEN!!!!!!!

[roymunnson]

uhhh that's not what Iran said

Someone asked one of the deputy negotiators if a deal was possible today, and he said

"God Knows"

That means something totally different in Iran compared to what it means here in the US.

IT's more in line but just short of "god willing"

To us it means...."what a clusterf**"

Just saying, but it is an important detail. All of my sources are saying everything is going surprisingly well

[666]

Personally, I don't really care about the price of gasoline, since I use only about 100 gal/yr in my small hatchback. More importantly, I learned that walking and bicycling is much preferred over driving, keeping me healthier, happier and feeling better overall.

I do, however, sympathize with those who are hurting from the high price of fuel.