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Crude Crashing: Brent Is Most. Oversold. EVER
Yesterday we lamented the ridiculously oversold levels in West Texas Intermediate, which as BofA calculated, has hit "oversold" levels for only the third time in six years. We assumed that this could be the basis for a short-term rebound. We were wrong, because we clearly had no idea just how determined the Saudis are to crush Putin into the ground courtesy of plunging oil prices.
As of moments ago, WTI has tumbled nearly $4, some 5%, to just over $81...
... which just goes to show how idiotic any reliance on charts is in a centrally-planned world, in which commodities are nothing but political weapons. Bottom line: based on its weekly RSI chart, WTI has just hit the most oversold levels since Lehman.
But to our rather great dismay, what is gong on with Brent turned out to be far worse, and as the weekly RSI indicator shows the selloff in Brent is now the worst, well, ever!
In other news: Andrew Hall, our condolences.
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Yea, right.
Brent is quadriple overbought for 3 years already.
WTI all the way to as low as $20 to clean up sacrificial lambs, then up it goes to $50-60
still paying 2 USD per liter for fuel in Germany...
That is precisely why economy is crashing, shortage of energy due to derivative gambling
Oh duh.
glad i didnt lock in my heating oil contract....
Ebola people don't buy oil.
I was just wondering at what price point it stops making economic sense to be blending ethanol in with our gas?
Oh yeah. It never made economic sense.
corn up 3% i dont get it
The demise of the Shale industry will be blamed on Saud.
Gonna' need a new chart.
Expect NO savings at the pump....state gas taxes will MOAR than make up for this drop
They've been selling paper metals for years now, but now they're selling paper oil. Are they fighting Russia? China? The boogeyman?
What would be classic (won't happen) is if Putin just turned off the 10 million barrel spigot and watched the price of oil go to the moon.
It would be awesome to watch these insider banksters get their faces ripped off.
Regards,
Cooter
buy up then ZH... im sure it can't go lower...
oil is a 35 barrel commodity, any more and the buyer is getting ripped off, see last decade.
Another round of QE should bring it back to $100+.
still contemplating if i should get in and nimble a bit or just wait a bit longer .... thoughts?
Lots of traders had their heads ripped off today.
That's something to think about.
and the real value of a "trader" is what again?
Fuck em. The new normal is a monkey of HFT bot pushing paper bullshit. My apologies to those that trade in real physical assets/commodites.
I ride a bicycle everywhere.
Not interested in oil prices.
So do I, but I know I'm going to need new tyres, chains, gears, grease, chain lube and all the other consumables that are currently made with petroleum products, even though the amount used is a lot less than required for automobiles.
https://www.youtube.com/watch?v=4Q5IA2Epk9Y
Eeeeeboooola
Maybe prices are crashing cause all the Nigerians working on the oil fields are dropping dead of ebola.
The only traders making money on this are those getting their insider tips from AIPAC backed appointments in the administration.
Targetting Vlad...
Well, at these prices he could simply buy up all the world's oil at the low price and sell it at the higher price. He might even get it cheaper by getting a bulk discount.
:P
Which were all delivered to the store where you bought them by a truck.
Exactly. If heavy industry (such as is required to produce steels, alloys, rubber, plastics and composites, asphalt/bitumen - and while I'm at it - fertilizers, pharmaceuticals, aggregates, heavy and light machinery, construction materials, food, etc., etc., etc., oh what the hell, point your finger in each and every freaking direction and whatever human-made object it falls on depends on oil), if it takes a hit because of rising oil prices, then you can kiss your precious bike goodbye. I've got three bikes because that's how I commute and I love cycling, and I own zero cars, but that doesn't mean I'm not concerned.
Don't touch it with a 10 foot clown pole. You are watching economic superpowers hammering each other right now. They are trying to choke Russia by knocking the prices down and getting Saud to pump as hard as they can.
The future prices is FIXED TOTALLY FIXED. They know *exactly* where they are going to take the price and it will magically just start trading a new price range and may not bounce back.
That scream you heard was Putin.
Keep having your wet Ebola dreams punk.
For just a week or so...just to get their attention.
Yes... and demand delivery of 1000 tonnes of gold and silver while he's at it.
It would be even more classic if Putin would throw 10 million barells for say 50 $ a barell on the market and see House of Saud be eaten by their peasants.
Or sell it for Rubles and watch the House of Bushbama get eaten by theirs.
What a wonderful idea!!
Let's write our politicians and tell them since the price of oil is down gas should follow, but just leave it at it's gouging blood spurting prices and just tell our elected representatives to give themselves a raise!!
WE LOVE YOU ELECTED LEADERS CAN'T WAIT TO VOTE YOU BACK IN IN NOVEMBER SO YOU ABUSE US SOME MORE!! THANKS!!
"Expect NO savings at the pump....state gas taxes will MOAR than make up for this drop"
Last night on one of our local Silicon Valley news channels, they were just discussing how good it was that prices were dropping before the new California Cap & Trade taxes take effect, which can be as high as 76 cents per gallon, on top of fuel prices that are already 50 cents per gallon higher than the national average. http://cafuelfacts.com/cap-and-trade-for-fuels/
They are also trying to pass a $0.05 per mile California "road usage" tax to replace an existing $0.529 per gallon fuel tax. So, basically, anyone who gets over 10mpg would end up paying more taxes. And all those Prius-driving social media employees are pretty upset about it as they would not be exempt.
Watch for Humvies to make a comeback!
I liked it so much I bought the company
Remington, right? I think he owned the Pats for a spell.
Obozo's US growth story, i mean LIE was always a potemkin village so now they need to kill it as the global slowdown is akin to the tide going out and the world is begining to see Uncle Sam's shrivled little tinkle
"corn up 3% i dont get it"
Halloween decorations
If Ebola fails, the fallback plan is to accelerate the diabetic epidemic.
Long Corn Syrup.
Russia
We are gearing up to make sour mash whiskey with all that excess corn..
Yea........ WHAT THE FUCK EVER!
OVERSOLD FOR WHO?
THE TOWELHEADS THAT ARE TRYING TO KILL US???
THE BANKSTERS THAT ARE ALSO TRYING TO KILL US???
THE GOVERNMENTS THAT ARE ALSO TRYING TO KILL US???
THE AUTO MANUFACTUERS THAT ARE TRYING TO FORCE FEED US WITH HYBRIDS???
THE GREENPEACE WACKOS???
OR ALL OF THE ABOVE???
What about the dude that is working two jobs just to pay rent with him and his three other roomates and have a bite to eat of ramen noodles once in a while???
You know what, I'm 33 and I STILL remember when gas a $1 a gallon and it blows my mind that it IS STILL $3 a gallon for NO OTHER REASON OTHER THAN:
THEFT.
Need a strong USD to unveil more QE. How else can outright money printing be done without an excuse? How can the US invade Syria without the evil ISIS?
It's all centrally planned. Oil is falling because someone is making it fall. THen, a reaction will take place and it will rise back up. The markets are a control mechanism for exporting monetary havoc and todays action is painfully obvious.
Last Friday, I set up my heating oil budget plan for 600 gallons. For the first time ever, I paid an extra 22 cents per gallon for downside price protection.
As of that Friday the current price was $3.19. The budget plan was $3.68. I think I'm gonna be glad I opted for downside protection on this baby.
Nice move.
Nice. I hope those fuckers "show you the money", because you know damn well it will be like pulling teeth.
This is financial war against Russia who's #1 income is, drum roll please, oil. When Russia invaded Georgia back in 2008 oil plunged down to under $50 a barrel. Now they're giving Russia some payback for all their meddling in the Ukraine. Sure it will hurt the oil companies and middle east but it'll hurt Russia a lot worse.
Oh, this is going to get exciting. Popcorn please!
Vicky Nudelman's $5 billion investment in the Kiev Junta was meddling in Ukraine.
Russia was trying to protect it's lifeblood (gas supply routes) and ethnic Russians.
I hear part of the five billion came from royalties on Anne Franke's bogus autobiography. The gents buying that made up piece of crap are funding their own demise.
Have you read the unabridged diary? Interesting read, especially comparing it to the originally published propaganda version.
Who needs to meet Anastasia babes when hot Russian hookers are so cheap with the ruble down so much.
I hear they dont take funny money like dollars. You gotta pay in gold, silver, or oil.
russia dont give a fuck about dollar value of oil, since they throat piss filling petrodollar...
you american must understand that any fucking single move you make against russia is send back to launcher....
if not europ too.
Saudi Arabia - land of the beauty goat pagent (seriously youtube it) is trying to knock Russia out with oil price flooding, while Obola the Kenyan Con man rubs Saudi Backs by supplying ISIS with weapons to overthrow Syria.
That's what this is.
DON'T DROP THE PRICE TO HELP YOUR CITIZENS YOU MORANS! NO!! DO IT CAUSE YOUR HAVING A COMMODITY WAR WITH RUSSIA YOU SMUCKS!
I think this whole price drop is a slap at Putin/Russia. It was engineered between US and SA to make ruble drop further.
It will backfire on them (like everything else does). Putin knows they're attacking the ruble, he and China will respond by moving ahead with their new SWIFT system, moving up the timeframe for new gold-backed Eurasian trade currency, which will move Eurasia away from the dollar faster, causing USD to lose worldwide support faster and lose reserve status faster.
Seems everything they do is for America's eventual downfall. That's the real back story in all this.
Just like hammering gold down is letting China/Russia buy gold super cheap for a gold-backed currency that will kill dollar reserve status.
US may be able to steal Lybia's gold and Ukraine's gold, even Germany's gold, but not China's and Russia's gold, and they have more than anyone else now.
Never see gold standard again? Oh yea, it's coming back. But it won't be ours.
i wish people would quit with the china and russia gold backed currency non sense. They don't want a gold backed currency that they can't print any more than the clowns in the west.
Agreed, and it would be naive for anyone to think Putin and his advisors didn't know this was coming and have planned accordingly well in advance.
And it isn't just chess but multi-dimensional chess played by a 4th dan Judoka that we are witnessing.
Further, if anyone were to look at Putin's actions through the fundamentals and philosophy of Judo they would get a clearer picture of his moves and motives.
@ MeMadMax:
Amen.
Theft by the self chosenites incorporated...
Theft and more. It's just about to begin though. Clean your guns while we wait.
Yeah? Well I remember .25 a gallon gas. The .25 was silver though so that's $3.14 a gallon so.......
Glad you did not list the Russians trying to kill us. Actually we are trying to kill them which is part of our problem.l
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula:
RSI = 100 - 100/(1 + RS*)
*Where RS = Average of x days' up closes / Average of x days' down closes." In technical terms its oversold.
PS: Its a TRAP!
Of *course* it's oversold. I've learned one thing about the markets that *always* is true. Anytime it goes parabolic it comes back. Simple.
not sure why anyone is junking ekm... oil held steady for a good 15 years at $20 a barrel and then from 2003-2006 it skyrocketed to $140 a barrel... um yeah, id say its been pretty fucking over bought for a while now
and we actually had solid growth from 2003 to about 2006..
after that... not so much!
chickens coming home to roost
The "growth" from that time period was from people using their homes as ATMs.
In other words, the growth was just an illusion created by low interest rates and too much easy credit from the Fed.
Those were the days my friend, we thought they'd never end...
Those were the best of times, those were the worst of times, we'd sing and dance....
Oh wait, that's not it..
The downvotes are due to the fact that technical indicators mean nothing in this controlled market and price discovery is dead.
You can only centrally plan and control the market so much. If no one is buying your $100 barrel of oil eventually you have to lower the price.
Who wasn't buying it?
Ethanol economic sense? Never intended to make economic sense. It was always there to buy off mid-western agri voters. It worked wonders to support the corn prices and inflate farm land values. As a motor fuel it has a lower BTU content and reduces mileage.
The ONLY time I give a shit is when I have to return a rental vehicle.
E85 fillup on the way back to Enterprise? Hell yes.
Next guy to rent the car and get shitty E85 mileage? Not my fucking problem.
:)
Not to mention it ruins fuel lines
Don't be such a tight wad, put a couple ounces of ACETONE in a full tank and watch that thing *race* back to the rental store... :D
Used to do 30% Xylene in my fill ups with the Grand National. Made 91 octane 100 octane. Turn that boost up! Lotsa fun
Almost Solvent
"Next guy to rent the car and get shitty E85 mileage? Not my fucking problem.
Not my problem huh? Bad Karma. People who think this way are one of the reasons why this country is going to hell.
Just F... the next guy right!
Paybacks are a bitch!
A tornado ripped through Arkansaw Monday morning and killed a Marine that had several tours in the Middle East, including Iraq, Afganistan and sent his wife to to the CCU. His children thank God, were unharmed.
Yes Karma is a bitch.
Fuck Karma.
Math - now there is an ABSOLUTE bitch.
:)
karma=religion
No shit, could not agree more...and I live here in IA where it's CORN CORN CORN every damn year.
Think of it as blending votes with the gas and the economic sense you'll make.
Big time, heavily negotiated contract taken out on Russia.
Nuland-Kagan types are still hell bent on pipeline wars, strategic, geopolitical positioning, PNAC game theory and other such matters.
If this keeps going, it's to be a looong, cold winter.
Omg this is crazy. Canadians must be shitting some serious bricks right now. Con party canada:
"So, good news / bad news. The bad news is oil is crashing and our entire economic plan was based on high energy prices...but the good news is we still have that booming real estate we spent tens of billions propping up to fall back on.."
"Um, sir..."
No. Canadian oil has made enough money with overblown prices.
Time to take a break
'enough money'? what kind of heresy is this!
And, Mr. Rockerfeller, how much money is enough?
Just a little bit moar!
I want moar enough money too!
Just wait until all the Indians and East Asians go back home because there are no more tech jobs in Canada. Already where I live (Tech hub of Canada) home prices are declining..... - FINALLY! They need to decline a modest 70% before I even think about "buying" (going in to debt).
Where would that be?
You live in a tech hub, how do you like the Jewish cuisine?
Somewhere in Alberta, heard today:
"Listen, I got an overpriced mortgage on a hastily crafted shitbox & a $750/month payment on a F250 King Ranch Lariat, eh?!"
Well it isn't Edmonton -- Dell closed their support center there a few years ago. Why hire East Indian accented Canadians to man a call center when it's cheaper to do it from India?
You live in Waterloo too?
Kanata? Cambridge-Waterloo?
Canadian joke... This Hoser says: "My date asked me to kiss her where it smells. So I drove her to Hamilton".
That's sick.
Kirk - in the strip clubs up there that would be either set of bare lips.
Sheesh, eh? Yaaa.
Canadian joke: Canada
That is all.
I would worry more about the new American Shale Oil miracle, than about the canucks. You know, all that talk about US being the biggest oil producer in the world... which lasted all about a few months and, at these prices, it's deader than a doorknob.
From Rolling Stone, via Washingtons Blog:
"Fracking, it turns out, is about producing cheap energy the same way the mortgage crisis was about helping realize the dreams of middle-class homeowners. For Chesapeake, the primary profit in fracking comes not from selling the gas itself, but from buying and flipping the land that contains the gas. The company is now the largest leaseholder in the United States, owning the drilling rights to some 15 million acres – an area more than twice the size of Maryland. McClendon [the CEO of fracking giant Chesapeake] has financed this land grab with junk bonds and complex partnerships and future production deals, creating a highly leveraged, deeply indebted company that has more in common with Enron than ExxonMobil. As McClendon put it in a conference call with Wall Street analysts a few years ago, “I can assure you that buying leases for x and selling them for 5x or 10x is a lot more profitable than trying to produce gas at $5 or $6 per million cubic feet.” "
That shit is FUCKING OVER.
Blog
This is misguided to the extreme. Flipping leases has always been part of the business but dummies who just went to school on O&G think they are finding out some deep secret. The oil out in the Permian is real but it's very deep down and wells are expensive to drill but with a good frack can produce over 500 barrels per day. That is a good well and a $10m well would be paid for in 200 days at $100/bbl. The payback is 250 days at $80/bbl. However, since the production declines after the first 100 days or so, those figures are probably somewhat longer. Fracking is profitable for good wells, not so much for bad ones. Flipping leases in hot areas is always part of the O&G business and always will be.
wells are expensive to drill
a good frack can produce over 500 barrels per day. That is a good well and a $10m well would be paid for in 200 days at $100/bbl. The payback is 250 days at $80/bbl
So you said production is expensive but then promptly ran numbers where production costs are zero.
Is financing free, too?
it's "new math"
fracking is bullshit, an environmental and resource disaster, very short lived and the best proof that the easy oil is gone....
even the heavy ass trucks beat the shit out of the roads
Where do you get production costs are zero?
wrs1
" can produce over 500 barrels per day"
Maybe, but average for 7/2014 was 130 bpd.
"$100/bbl"- subtract out aprox $12/bbl shipping with crude at $83/bbl as of today.
Your figures are nice academic figures for someone that's never owned a business. Good luck out in the real world.
https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
Duplicate deleted
I didn't say average. I said a good frack and I gave an example that is not unrealistic and not academic. You might do better to read about the Wolfcamp before shooting your mouth off about averages which are nothing but a statistic. I don't know where you came up with the shipping but it's not right for the Permian and it's netted out of what the operator is paid. I owned and ran a cash flow positive business for 15 years. I currently have a well producing 950 bbl/day and 4000mcf/day on one of my sections in the Wolfcamp and I am aware of what the costs are and are not, apparently you are not.
You can cherry pick your numbers, however, here is a reference as of May 5th, 2014. The oil is shipped by rail. $12/bbl was the most recent cost I have seen.
Railroad transport reportedly costs in the neighborhood of $10 to $15 per barrel -page 7, 1st complete paragraph.
http://fas.org/sgp/crs/misc/R43390.pdf
So that is why LNG is tanking. There go Ukraine hopes for a warm winter with gas from US fracking or shale gas from Donetsk region. Now they will have to burn Nuland at the star and Hunter Biden at the cross
So that is why LNG is tanking. There go Ukraine hopes for a warm winter with gas from US fracking or shale gas from Donetsk region. Now they will have to burn Nuland at the star and Hunter Biden at the cross
re McCormick No. 9's post... George Carlin was right: This country was build and runs on BULLSHIT! 100% Pure, American-Grade Bullshit.
No wonder that "Organized Religion" is so BIG in USA-cum-USSA: W/o a huge base of gullible, malleable "folks", who are happy to drink Kool-Aid and parrot "Halleluiah!" at Revival meetings, how are you gonna milk, shear and fleece* them?
Paging Elmer Gantry. Elmer Gantry to the Oil-black Courtesy Phone please.
* True story... A car salesman told me last year: "I used to be a Minister/Preacher. This is America. If I can sell Religion, I can sell ANYTHING!"
Again...once the drilling is done its a buck a barrel.
Natural gas .even cheaper.
Of youll still need dollars to get it.
If you spend $10m to drill the well then you need to make back $10m before there is a profit. So no, it's not a buck a barrel once the drilling is done.
I only ten million in debt retard. Once the company goes belly up I'll buy it back from the same bank for a dollar.
AND I'll still be getting actual oil.
Retard? What do you know abou the oil business? Nothing at all based on the content of your posts.
Now you see why he calls himself disabled...
Lol
I "hope" Obammy and the oil boyz aren't thinking they are hurting Putin with this???
Russia will be selling nat gas to EU at all time highs this winter because of this sanctions bullshit and Rusdian oil is flowing East and to South America in exchange for de-dollarization pacts, sooooooo the ONLY ones crushed by this will be the massively over leveraged shale and oil producers in the West!!
More rocket science policy making from the most under qualified President and .gov in American History:)
No actually we don't care a bit. Because every oil refinery in Canada is OWNED BY THE FUCKING US, or has silent partners controlling it.
So what are *you* guys doing down there when fracking becomes unaffordable?
I have a friend formerly at Shell who used to heli-abseil onto our famous Bookcliffs. He says fracking only wins at $140. This was 1980s money, back during the last bust. Now we in the Bust of all Busts and the people who came here and defecated in our streets are long gone.
You're right not to care. Fuck petroleum. Cars are coffins.
paper prices for calories that are available for consumption becoming fucking irrelevant in a hurry.
All that matters now is the Energy Returned on the Energy Invested...
If you don't have a potable form of consumable calories you won't actually do shit, period.
Now, can I interest you in a financial "product" of mass destruction?
That's why technology exists, minimum amount of input to get maximum amount of output
Archimedes Lever concept
Very dangerous way of thinking. There are always hard limits and the next thing you know, new technology must be developed. Unfortunately, technology development requires a tremendous input of real resources and energy itself. This is why it is very important to invest the current resources and capital currently at your disposal very wisely. Very bad things happen if you allow resource and capital mis-allocation and mal-investment to occur for too long. Now, you tell me, especially in light of all those unfunded liabilities on this rock, do we have ability to make the next quantum leap (real fusion reactors) and sustain things as they are...
tick tock motherfucker.
If technology using little energy not available, then we are screwed
You are screwed. Bank on it...
get a life
Anyone seriously thinking that we actually could solve any real human problems with FUSION reactors...
Technology, and science in general, promise all our problems will be solved at a later date as long as we continue to have faith.
Same fucking carrot that religion dangles in front of our faces.
Not at all! The claims made by fusion scientists are quite clear: in 10 years, we should have working fusion.
And these claims are backed up by consistency; 40 years ago they were saying exactly the same thing ;-)
It realistically takes 20 years to commercialise a "working right now" scientific prototype on the scale of a reactor into a product that can be built and run. So if they don't have something actually working producing energy more energy than it consumes [1] reliably and consistently, with all of the major kinks worked out, then you're not going to see one being built in anger and fired up in the next 20 years. Same's true of thorium BTW. If they haven't got one running *today* then don't expect to see it for at least 20 years.
So... Look at the best alternatives that are available *today* for your future.
[1] and this is the real problem with fusion reactors. You can build one in your kitchen that will fuse atoms together, produce energy and radiation etc but you'll be putting in a shit load of energy to get far less out and have no way of capturing it.
No I don't- their garbage.
However Thorium Reactors are another thing entirely. Their initial production was blocked because they would of made coal / natural gas/ and OIL obsolete. They also could not be weaponized.
GE closed the nuclear loop in the 1950's and it would of extracted the other 99% of the fuel. But that wasn't profitable so the advanced design was shelved on purpose and the fuel rods were stored all these decades until Fukushima.. Funny how the greed goes in a circle.
Most of the reactors on the plant are actually submarine reactor design knockoffs.
No but we could keep kicking the can for another 200 years.
Likely scenario. None of us will see any new tech in our lifetime. In-fact I give our lifetime a better chance of seeing 3rd world status from nukes before new energy tech. See our world point of view is fuck the next generation as we won't have to worry about it. So with that said, some generation will be left holding the bag. Unfortunate situation but how I see it.
Precisely!!!
Screwed is what it is. Nothing has the EROEI of simple crude that does not required extensive drilling, fracking, etc. to get at.
https://www.math.nyu.edu/~crorres/Archimedes/Lever/LeverIntro.html
As you said it before: "Get a Life !"... Wanker.
LOP,
Cold fusion may still be in play (maniacal laughter backstage).
http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-b...
"Now, can I interest you in a financial "product" of mass destruction?"
SHUT UP AND TAKE MY MONEY ALREADY. I WANT THEM ALL !!!11!!ONE!!!!
where we're going we wont need oil!
What percentage of that is simply taxes or fees?
$2.80 per gallon in Tennessee, likely going lower.
Bullish Dollywood.
"still paying 2 USD per liter for fuel in Germany..."
I'd understand that better if it were Euro/gallon. Tx
(3.7854118 * (2 euro * 1.265 Euro Dollar)) = $9.57
His price for Germany is way to high. It is 1.45 in France and 1.25 in Luxembourg. I live here...
So Lux price is: $5.98 per gallon
he said $2 USD per litre or about 1.40 Euro for the good stuff
about $7.44 USD per US gallon
that is huge
We're going well in the UK:
Currently $7.64 per (US) Gallon; and you guys think you're getting screwed at >$3.00
In the UK; if a bbl of oil was at $0 the taxes would still have a gallon at >$5.00
2 USD per liter? Hell, thats what we pay here for pop!
1.25 Euro per liter here in Luxembourg.