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WTI Hits $52 Handle As US Rig Count Tumbles To 8-Month Lows
Just as T. Boone Pickens warned "watch the rig counts" last week, so the Baker Hughes rig countjust collapsed for the 3rd week in a row to 8-month lows. This is the fastest 3-week drop since mid-2009. Crude prices were already weak but the news has flushed WTI to a $52 handle (not seen in the front-month contract since May 2009)
Rig count is tumbling...
Some context for the surge in US rig count...
And while the drop in Canadian rig count sounds impressive - it's the worst since 2009 - it's much more seasonal
WTI Hits A $52 handle!!
And then there's this...
Charts: bloomberg
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...and US futures all green ??????????
Of course they're green ........ the algobots are on Holiday mode.........no way it goes red........
Is this a reaction to the greek elections?
Its a reaction to algorithms running on computers in New Jersey. That is all the fun-durr-mentals that count these days.
Atlantic City New Jersey...
Might as well be... not many humans left there anyhow.
At least Libya is doing well
https://twitter.com/search?q=%20Al-Sidra&src=typd
But it's ok because oil isn't a leading indicator, it's transitory.
Maybe I should have added #sarc
The bankststers wanted him eliminated. https://www.youtube.com/watch?v=XorKTwkFPDU&feature=youtube_gdata_player
The energy credit chart tells us that another big financial crisis is looming. Oil prices go back up, or expect a junk bond crisis. It'll be like a high speed, high energy impact. You know that peices will go flying, but figuring out where which peice will get shattered and where it will fly will be anybody's best guess. A bond crisis that sees UST yeilds plummet and everything else gets nuked? Yeah, it could happen.
Yet another shining example of DEM governance...
today's top headlines - as a car crash happens outside my window while I type (crap, pause, seems OK, yep all fine a fender bender):
who we like:
http://www.nydailynews.com/news/politics/obama-golf-game-boots-bride-gro...
who we do not like:
http://www.nydailynews.com/news/world/argentina-president-adopts-boy-sto...
gotta say media is freakin awesome and so helpful for the future. KMA (RIP Arron Russo)
edit some sarc intended...
Get thos V8s out
watta beacon of light
Ruble plummeting as well. Looks like they're having another go, as explained in this 25 minute talk (English subtitles).
How and why the Ruble was driven lower.
http://www.youtube.com/watch?v=Un5rsKFo7Xo
Nikolai Starikov, writer on geo-politics and international finance, explains in detail the mechanisms of the ruble's 2014 fall, the passivity or complicity of the financial authorities, and the end result this is leading to.
Attacks against Russia are happening on multiple fronts, including:
- Sanctions suspending credit lines from abroad;
- Speculators easily manipulating the RUB exchange rates;
- False flag atrocities;
- The oil price determined by OPEC;
- Preparation of a “Patriotic Maidan”.
Starikov claims that all of the above is instigated by Washington to defend the dollar's supremacy and prevent the rise of the Eurasian Economic Union, which officially comes into existence at the beginning of 2015.
Psst! The Dems and Repubs are just like competing mafia groups. They may fight against each other, but when it comes to your little shop on the corner, both will demand a "protection" fee from you. The only real difference between them is the label that they put on themselves. They're both out to benefit, and if they have to fuck you in the ass to do it, neither will bring lube.
I believe the concept is called "manufactured debate" (or something to that extent.)
It's also referred to some as just bullshit.
Political parties?
Narcissism of minor difference
"...the news has flushed WTI to a $52 handle."
What news?
Collapsing rig counts should be long term bullish so my guess is that "the news" is something so bad we are never to speak of it...
Collapsing Rig Counts may be bullish in the long term...MAY being the key word.
However in the short term it indicates that the Companies are seeing little demand thus they shut down rigs.
It indicates a waning demand in the short term so prices subsequently decline.
A contrarian bet might be to go long oil in the long term at these low prices.
I would not pull that trigger just yet. Let this pie cook a bit longer. I know that the aroma is sweet. But this pie is not done baking.
Patience, young man...patience. It will decline much more before this shitstorm is over. (Of course waiting for a price recovery may take an extended period because this is the deflationary episode before any hyperinflation can develop...if a hyperinflation develops...)
Watch Saudi Arabia.
Patience young man, patience. Do not catch the falling knife.
(What an Exponential Collapse. Exponential Collapse always precede an Exponential Growth as well. Of course for the Bear Side of the trade it is an Exponential Growth Curve. Just invert the Price Curve and that is the growth in Profits on the Short End of the trade. . Man Math is beautiful when displayed graphically.)
go fuck yourself with your crude projections and trading advice.
The term collapse is casually used by ZH as it mostly reports most things as all doom and all gloom all the time. Rigs drilling for oil are still up 117 from this week last year. What one could call a collapse with a short term focus could still be honestly reported as a rise using a slightly longer time frame. True, no one expects the down trend to reverse anytime soon but it is not all doom yet. There are still 1000+ rigs making hole and putting payroll in worker’s pockets. For the most part is less efficient rigs that are being dropped, not the newer most productive rigs. NG rigs were actually up 2 rigs wk/wk. No collapse there (yet) despite terrible prices, but that is not news because it is not all doom and gloom all the time.
Good for you; that's whtat we usually are in need of here; the other side of the story.
That's because those rigs have already been under lease contract. You can't just plug up the hole and take a $10 million hit for breaking the lease. They have no choice.
As the older rigs go off lease, I doubt the E&P's will be ordering more. That's when the rig count will collapse.
re: WTI; well, there's a bottom here someplace; darned if I know where. It's a good contract to trade; $1,000 / dollar; and the margin is not too high. But as I say, I don't hve a clue. And I don't want to find out the expensive way.
Fuck Tyler, you jinxed the son of a bitch again. Every time you do this we get a low volume melt up.
Dont blame the messenger buy the fuckin dip
" Who could imagine, it can't happen here, everybodies clean and it can't happen hear" Frank Zappa
when in doubt pound the vix lower
Who cares what the hell the rig count is? The obvious demand is for STAWKS!
We don't need no stinking oil rigs! All we need is MOAR!
Similar to 2008. Interesting.
Yes except Bush was president and the Progressive Federal Reserve, Kramer, and the rest of the media were well in the bag for their Marxist-in-Chief...
I was not a supporter of Bush either..
Someone is deathly afraid of these collapsing crude prices. CNBC is parading clips of the Libya fires in a desperate attempt to overplay anything that might cause sentiment to drive prices the other way.
Release The (misallocated capital) Kraken
How many trillions in derivatives are tied to oil prices at $70 and above?
Wall Street - Heads I win, Tails you lose
Jamie Dimon: Are you scared yet, Janet? Do you want to see something really scary? Go ahead and keep pulling this car over. I will show you something really scary.
https://www.youtube.com/watch?v=ETC6NSxpFFE
Speaking of rig count, the offshore drillers are going to be seeing a lot of headwinds given the large number of rigs coming to market at exactly the wrong time.
Let's get oil to $10/barrel and Gold to $7,200/troy ounce so I can buy back my 1987 Porsche 944S and afford the parts and mechanic.
LOL, son, if oil gets to $10/bbl, gold will be closer to $72/oz than $7200/oz
Gold goes back to $300, where it was in 1999. WTI will frontrun this (1999 = $10).
I will be stacking every fucking ounce I can get my greedy hands on. That is a promise.
...well as long as everyone in the western world is living in mud huts, then yes. Oil is very much an important part of maintaining a high standard of living. Sure, if we all want to go back to being "hunter-gatherers" then, and only then, would you really see "no demand" for oil.
Simply more paper bullshit games. Look, if an oil company makes a huge capital and resource investment to get some wells producing, they will keep them producing until they are dry. Storing oil is no big deal, shutting down and starting up is.
Paying the costs to pump it and store it is a big deal. There is also a limited above ground capacity.
As as for MOST Westerners living in mud huts...I think that might be a part of the plan...
They are wiping out the middle class. And a poor serf is a good slave.
Not so fast we can take our shit and put it in a container and make bio gas and live off of shit powered vehicles.
Instead of the powered shit vehicles.
"Storing oil is no big deal"
Can be. When you hear of tankers being chartered to store oil, then you'll know it's a problem.
In the current political environment I would expect stategic reserves will get filled first.
" I would expect stategic reserves will get filled first." -- Bingo. Lots and lots of underground storage. Just ask the U.S. military and all their oil contract engineers.
The spice must flow and the U.S. military makes sure of that.
"...the more complex a system is, the more energy it needsw to maintain its size and space." James Rickards, Currency Wars
Why fracking is a push-monster.
The spice must flow.
$10 oil? The teeter-totter is tilting down. LOL... Demand won't stay down forever and marginal supply has already started drying up. The leveraged E&P companies are gonna get thumped even if rig rates drop really low. Cheap peak oil is here... I wonder what the "all in" cost of shale oil really is when you factor in the damage and water issues?
History lesson... OPEC countries used accounting to double their reserves to increase prorated output.
Chris Martenson gave a good speech in Madrid years ago - its on youtube... well worth the hour
Gold can't got to $300. Can't even go to $1200, I don't think.
It's a "Store of Value", don't you know.
(And marginal cost is $1200 to mine and produce. Right?)
Exacto Mundo, Buckaroo
What the fuck does oil have to do with the price of gold in rigged and manipulated markets?
Answer: Very little.
They have something to do with each other. Read some FOFOA.
Yes. Most oil producers will accept gold in exchange for their oil.
Oil is making gold look expensive. If it weren't for the stock market I would say we got thumped by some deflation.
As manipulated as the stock and bond markets are, neither is going to be a leading indicator of a deflationary crisis. What we are going to find out is if the collapse of the price of oil is due to a glut of supply or a collapse in demand. If the latter, we may be looking at our leading indicator right now.
This month EIA cut its estimate for world consumption in 2015 from 92.5 million bbl/d to 92.3 million bbl/d, but the market may be telling us that it's still too high. And it cut its estimate for world production from 93.0 million bb/d to 92.8 million bb/d.
What really puts the sparkle in gold, imo, is the possibility of it being used as collateral / financial backing as world powers realign....
Remind me what we are doing this week - "Lower oil price great for consumer, Higher Oil prices great for business" or "higher oil price great for business, lower prices great for consumer"
Fuck it. just BTFD
There goes a few thousand moar jobs in Texas. After a long Bull run, these earl states are gonna see some contraction looks like.
Gonna take a while here in Texas. Trickle down effect if you will.
Relax .... We got a way to go.
December 23, 2008 WTI @ $ 30.23
You are assuming we reach those levels... or stop once we are there.
It's all rigged. Pun fucking intended.
a spoonerism might be "fun pucking frail shack"
If you are in possession of consumable calories then you can actually make and do real stuff, period. FYI, forget about "growth", the world needs consumable calories in order to simply maintain the status quo.
The way I understand it, producers across the board are maintaining production, trying to keep their volume up even as this drives prices lower. This then actually is a market in action! We all know the Fed can not manipulate oil prices, so this ONE market it immune from communism, and actually trades on supply and demand.
Oil should crash lower on the maintained production by all producers. This will pressure expensive oil out of the drilling business. So when it comes time to refrack producing wells that run out after 3 years, will they go in a pay to refrack existing wells, or let them sit? Employment in the Fracking Patch, North Dakota and Texas will nose dive from here on in.
What can bring prices up? Time! As always, drilling will collapse. No new wells means eventually supply will tighten. Until then, all major oil producers will suffer. None more so than High Cost Producers. We know for fact, the highest cost producers, thus lowest profit margine are: "American Frackers, Canadian Tar Mines". You can run from the market forces, but all the lies about Fracking profitability at $50-$40 dollar oil are bullshit lies, all meant to keep you investors sitting in your stocks and bonds related to Frackers, while all the big money escapes and piles the losses onto you. How many get sucked in by brokers selling "Patriotic Farcker's Bonds, or Patritoic Shares in Frackers?"
Brokers were selling a Ponzi. Those holding high yield bonds from the frackers, are about to be vaporized.
well...intervention takes many forms - this is about as marked to market as an underwater balloon mortgage
http://energy.gov/fe/services/petroleum-reserves/strategic-petroleum-res...
perhaps there is such a thing as "fed up" :)
Agreed above. Cost of production for tar sands is near $100. EROEI is low due to the seperation process of the tar from the sand, which uses natural gas to heat water to sperate the oil.
My only small deviation is your statement that the Fed cannot manipulate oil prices. Maybe not directly but I think for sure indirectly. I think we have a world style mafia. Individually they work in unision with each other when it comes to controlling these events. IMHO This came too sudden,,, within 3-4 months for it to be purely a market action.
Otherwise you are, as usual,.. dead on.
Absolutely it is manipulated. Anyone that has followed gold and silver prices the last three and a half years knows this all too well.
"There are no markets anymore, just interventions"
Chris Powell (GATA) April, 2008
http://www.gata.org/node/6242
I am sure the President's Working Group was long oil since the Spring of '09. It was a great way to get investors out of the dollar as oil trades inversely to it and maintain market stabilitee.
Kind of like a global version of Human Centipede....
We ingest the excrement of the one in front of us in the chain and pass it on.
Well, they CAN manipulate whatever they want. The question is can they manipulate prices successfully...
They can certainly TRY. But I think Jack's point was that the oil market is different from say, gold. Oil must be bought and burned by manufacturers. Those manufacturers have no pricing power in a deflationary environment, so despite the Fed's manipulations, oil will be bought and sold by those who need it, at whatever price the market sets.
The Fed has no power to manipulate demand in oil, it is subject to true market conditions. Global market conditions, that is. Paper oil doesn't run industrial machinery, or put gas into people's tanks. Tanking demand cannot be hidden in 'stats', as it shows up everywhere and filters into the whole economy.
But they can certainly TRY.
Absent very small amounts, gold is not needed by industry.
Oil makes industry run - until they get unicorn powered cargo ships and planes online.
I know the answer What is the question?
What or who is the largest consumer of oil in the US
What actions influence the ups and downs of that what or who?
What is the % of consumption from that what or who? And lastly to look at a chart of pricing overlaid on what or who's favorite activity.
So where are we at?
It's ------- surreal that once the machine was created to support the system and now the system runs the machine to support itself.
To be perfectly honest with you, what is to prevent regional banks from enetering the market with their capital now the the FDIC (HA! Taxpayer) is on the hook for all bad bets going forward? Federally mandated bail-in. The sheeple won't see it because it'll be done out of the public eye.
In the long run isn't that also true for silver?
I know in the long run we're all dead, but it's for the kids, right?
Please explain to me specifically why "the Fed can not manipulate oil prices", or did you mean to say futures prices...
Please explain to me specifically why "the Fed can not manipulate oil prices", or did you mean to say futures prices...
Looks like 2015 already started.
I'm the expert here, not you !!
lol
White woman, shoots at random people, aims gun at cops after car chase, lives to tell about it
These charts are a sympton of the problem....
The problem is manipulation. That can't be charted.In a lawful society it would not exist or at least be minimal. The ussa in regards to money creation and/or financial instruments has left lawful behind years ago.
Anything coming from the Fed or USG is at best BS. Only thing one can do is join the charade and lawlessness , steal what they can or sit on the sideline hoping things will improve.
It's a self-fulfilling prophesy now. OIL will find some support soon which will give the markets some false hope. But the trend is down and will be for some time to come...
http://www.globaldeflationnews.com/oil-light-sweet-crudeelliott-wave-upd...
http://www.globaldeflationnews.com/whats-really-happening-with-oilthe-la...
One things for sure crude will be back above $80 in 4-5 months just in time for the summer driving season, time to look at USO/UCO calls
Under normal conditions I'd say you were right. But this isn't normal. And it is always easier to fall from a position than it is to climb UP from that position.
While there may be the political will to see prices go back up, the consumer is in no position to PAY those prices. Or all the other prices that would rise as a result of higher oil.
That is the brick wall facing energy prices. Unlike so many other "assets", oil is an ACTUAL thing with an actual market. It has to be taken from the ground, refined, and sold by the barrel to people who need to burn it. You can't 'talk down' oil like you do gold. There are too many who NEED delivery of the actual product, and it is they who will determine the selling price despite what TPTB might prefer. And since it is they who are selling stuff to the consumer with no money, their prices aren't going anywhere either, so they are certainly NOT going to be buying 80 dollar a barrel oil to keep their production lines open when there's no profit.
Inflation is a quick-moving flare-up that you can spot and target. As long as you move fast you can get it under control.
Deflation is a slow-smoldering, low-grade burn that is more difficult to corner. By the time you figure out where it's coming from, it's already too late and the fire is in the walls, beyond your hoses.
"There are too many who NEED delivery of the actual product," -- so you are in fact saying that there is demand that cannot go away?
Wait, are you arguing for higher prices?
I am confused. If I actually have the oil or the oil-product, then I can actually still do and make stuff. If you won't pay my price, fuck you.
"demand that cannot go away?"
Difference between needs and wants. We're a long way from needs setting the floor.
Bullshit. Otherwise we would have ended food stamps and corporate welfare.
You are acting like there is an actual market that allows for true price discovery.
There isn't.
Why haven't delivery services lowered fuel surcharges?
BSBSBS. Oil is talked down and up all the time. There's a paper market and it is heavily manipulated.
my dream? to see timothy show up at the nyfed.
In a box?
Yeah, there's been some frigging in the rigging.....
And so the bottom appears...
...and so the Saudis/OPEC continue to administer a Worldwide Ass Whipping to everyone who wants to make money in Their Playground.
We are watching everyone show their cards.
Ha, we are repeating the same BS from 2008/2009.
Arrest The Banksters!
Do we have enough poles?
Adam Smith's invisible hand is getting ready to smack you with a five fingered death punch.
"ANCHORAGE, Alaska (AP) — With oil prices dropping, Alaska Gov. Bill Walker has halted new spending on six high-profile projects, pending further review..."
Adam Smith's invisible hand is getting ready to smack you with a five fingered death punch.
"ANCHORAGE, Alaska (AP) — With oil prices dropping, Alaska Gov. Bill Walker has halted new spending on six high-profile projects, pending further review..."
can you guys write something funny about Shake Shack IPO?
I wonder if Million Dollar Bonus will be all in like he was with the FB IPO? To me, that post was perhaps one of the most hilarious in memory for this site. If we're lucky, maybe he can grace us with his presence should there be an article on Shake Shack. Cross your fingers...
Shake Shack Shucks.
copper continues down too, perhaps the most stable indicator of resource prices, oil remains weaker and more volatile but until copper bottoms I don't see that oil will, either.
copper bottoms, heh.
The next short move is underway and the targets are in green DASHED LINES. CL has been hitting targets and BLASTING through them since this began. This chart is posted to my Blog:
http://tos.mx/uDP5Ec
Everyone talks the 55 handle but the true zone of resistance WAS in the blue shade box shown.
Everyone talks the 55 handle but the true zone of resistance WAS in the blue shade box shown.
Ruble down about 15% today....
And yet they won't back their fiat with jack.
Since they don't lack brains and seem to have courage, then... Putin is either getting really bad advice from the Fifth Column at the CBR, or not getting permission from his masters in Beijing.
And remind me again what happened to Asymmetric Responses? Their responses are neither asymmetric or overwhelm. They are in fact and in deed... quite mainstream and tame.
Still waiting for something more compelling to counter their increasingly defensive game, that remains RE-active.
You want to laugh, you want to cry, you want to pull your hair out why life never seems to go your way, even while doing all you can to help you and yours?
It, is, all, 'Rigged'.
Everything, as I have posted here many times, many fucking times, is a lie.
Everything you ever believed in, from the government that controls you, to the banks that rob you, from the courts that abuse you, to the schools that mis-infrom you is a lie.
Everything you have ever known has a price, with interest added, at your expense. And they even lied about that the cunts.
Withdraw your implied, and complicit concent. Lets fucking bring this shit show down. We are all in the mix, lets show the paedophile fucking cunts we mean it.
You have no legitimacy, you have no concent. Come and fucking get some...
;-)
Janet loves her stawks!
talk of new military offensive in iraq against IS will boost those oil prices though...
I BELIEVE that January is setting up for a massive correction in the global markets. I am getting ready to get long UVXY sometime this week.
VIX...Buy at 12...Sell Higher.
Wash. Rinse. Repeat.
"If prices drop too far the entire extraction industry will go out of business, that the prices have crashed indicates half the industry is already out of business (see: http://makewealthhistory.org/2014/12/16/break-even-points-for-oil-producers/), it just doesn’t know which half it is yet.
The increase in petroleum volume isn’t necessarily a blessing as the energy content of the newer fuels is no greater than that of smaller volumes seven- or eight years ago. The increased volumes cost more to extract, transport and process so the net-energy yield is less.
The plunging price of crude oil does not reflect the cost of extracting it or finding substitutes but rather the paucity of return on its use. This is sensible because returns are what are supposed to pay for extraction- plus a profit. What pays instead are sub-prime loans made against promises of bottomless production rather than actual remunerative use. The highest and best use for crude oil and related goods has been as subjects in a Wall Street finance shell game which is undone by the crash in crude prices.
With world-wide financial repression and the propping up of key-men everywhere, any energy crisis initially will not take familiar forms: gas lines, rationing and highway speed restrictions. Instead, the crisis will emerge as a credit crunch which is underway right now. Credit is being systematically revealed as worthless, leaving the fuel industry to provide for those elements of the fuel-use economy that can pay for themselves. This amounts to a very small fraction of current ‘use’ which is mostly for entertainment and pleasure.
“Central banks will print money,” is the usual nonsense refrain. Central banks cannot increase purchasing power, they can only dilute it. Finance can lend but the cost of moral hazard — a kind of indirect subsidy — has risen to where even largest governments cannot bear it. More loans won’t work anyway: money flows to drillers starving customers of funds leaving nobody to retire the drillers’ loans.
At the same time, oil states need to sell as much as they can to gain what cash-flow is possible. All petroleum is high cost now b/c of the need to work over old, depleting fields. Drillers are frantic to make up their losses on volume …
There is nobody with a handle on this situation, it is running away on its own"
Source: http://www.economic-undertow.com/
Good article around the collage bubble scam.
Billionaire Warns Of Massive Crash That Will Wipe Out America’s Colleges: “You’re Going To See A Repeat Of What We Saw In The Housing Market”:
http://www.shtfplan.com/headline-news/billionaire-warns-of-massive-crash...
And a bit moar about the evil of govt snoopage.
http://investmentwatchblog.com/media-blackout-its-not-just-the-nsa-sneak...
A vision of the future?
How Vulnerable Is America to Mass Starvation?:
http://www.thecommonsenseshow.com/2014/12/27/vulnerable-america-mass-sta...
Oil....who needs it?
No problem... Those unemployed North Dakota Roughnecks can always go back to their old jobs at the Meth labs in the Ozarks, which represent the USA's only real sustainable industry with little job risk (assuming the county Sheriffs are adequately compensated). Unfortunately for the rest of us average Joe's, it's tough shit.
Well the BH employees should start polishing up their resumes
I've heard rumors the investment banking sector is having another best year ever
Take your Enronesque trading skills knowledge and break on through to the other side. Goldmans Sack would love to rest itself on your face. Just don't tell them you're a tea bagger they might think you're enjoying it
THey hyperbole is worse than RobotTrader ever was. Looks to me like rig counts are back to the level they were at in May which is way more than they were in 2009, try looking at the data.