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WTI Tumbles Back To A $50 Handle On Iran, Default, And Cushing Build Fears
Having surged on Tuesday when the Iran "deal" was confirmed and tumbled yesterday despite inventory draws and production decreases, WTI crude is re-slumping back to a $50 handle this morning as traders cite more Iran concerns (flattening the curve) and a Genscape report that indicates inventory builds at Cushing once again...
It appears the algos have been turned upside down...
As we noted previously, worries over Shale Oil company indebtedness are resurging...
“The energy sector of the high-yield market continues to be a silo of misery,” Margie Patel with Wells Capital Management, told Bloomberg telephone interview. “If we stay near these levels, marginal high-cost producers won’t be able to survive.”
Bonds due in 2020 for Energy XXI, a driller in Louisiana, are now trading at 84.5 cents on the dollar, and Oklahoma-based SandRidge has seen its debt fall to 87 cents on the dollar.
The markets will get a clearer picture as second quarter earnings season arrives, as indebted shale companies provide some clues into their ongoing struggles.
However, the outlook moving forward may be gloomier than whatever they report in the second quarter.
Charts: bloomberg
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Oh good, people will have disposable money to spend in the Summer of Recovery!
Risk on Garth….
Risk on Wayne……
https://www.youtube.com/watch?v=oe30habM0ls
Ah yes, Energy XXI. This was a Cramer favorite back on March 12, 2014. Back then it was trading at $21.50, today the share price is $2.10. Buh Buh Buh Booyah !
http://www.cnbc.com/2014/03/12/energy-xxi-makes-great-acquisition-for-sh...
half the country here is on holidays. People have loads of cash and most are debt free here.
half the country here is on holidays. People have loads of cash and most are debt free here.
The algo's are almost as confused as the sheep. There are people out there right now who are waiting for the sector to take a dump so they can pick up leases etc on the cheap......
Yet gasoline still sits at $2.83/gallon.
Fuck the oil monopolies.
Thats dirt cheap. I pay 8 dollars a gallon equivalent in Euros. Still debt free and lots of disposable cash.
Appears your cash is about to be disposed of.
That price you see is in US dollars would appear...
https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...
https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...
Yeah, 8 Dollars for me also (Luxembourg).
Gas was always a strawman argument even in the USA. When family members used to bring it up I was like, "Do you really spend that much of your income on fuel?". The answer was No... it was just something the unwashed masses used to complain about.
Other than summer road trips, I possibly fill my tank once a month in Europe (60 Euros)
Same here,, BTW I lived in Luxembourg 3 years and flew for Cargo Lion. (defunct now).
Still collect Luxembourg Social Security which is the best in Europe.
Luxembourg is nice... I have zero regrets leaving the USA.
Lived in USA 35 year. Wouldn't go back for a million bucks.
You're getting a deal.
$3.65 in SF Bay Area yesterday.
Over a dollar in new taxes was added when the price went down. Tried to sneak it in there on us.
Now it will be europeon prices when oil goes back up.
Just a Silver slips under the $15 horizon
into a golden sunset.
Where will it all end ? And so sad for the Greek seniors - no cash, little savings left, and bleak prospects for the future. Austerity kills.
An article on Zero Hedge explained the multi-trillion dollar oil market swindle - it's part of the Nobel Prize Winner's full spectrum war against Russia:
According to Cornerstone Analytics, who have documented the IEA systematically underestimating demand in 2012-2013 only to revise it higher quarters if not years later, the EIA has created the appearance of an imbalance of supply by some 500 million barrels or $2.5 trillion in the last 5 quarters alone. This has easily swung oil by at least $20/barrel if not more.
I have maintained that oil should have corrected to around $70 in the fall of 2014, tied to U.S. production increases which at the time represented the price at which drillers would continue to add to supply. That price tied to cost reductions has probably been reduced to $60ish currently. But today, with the consensus oversupply widely quoted in the media as some 2 million barrels per day worldwide, it’s clear that if the numbers are correct below, the perceived oversupply wouldn’t exist at all. Suffice it to say prices would be at least at the point where production would need to be added, perhaps around $60-$70 per barrel, if not higher.
Assuming that number at $70 and with the blended average of WTI & Brent at $55/Barrel approximately, at $15/Barrel given the 95 million barrels of global production, then we can estimate that global oil markets are being undervalued by about $1.425 billion per day or over $500 billion per year
http://www.zerohedge.com/news/2015-07-14/multi-trillion-dollar-oil-marke...
How come every other commodity in the world is manipulated to conform to the price they deem most convenient, but oil must be allowed to "float"?
Why don't they just fix the price of oil as well and be done with all this nonesense?
I'm not saying this as an endorsement of a command economy, but why does oil get a pass while, say, Silver gets pummeled to whatever price they like?
Ever heard of the Rockefellers? They and big oil wants to grab Russia's oil. Short term pain for long term gain. Putin put Khordokovsky in prison for years for this reason.
US backed Maidans. Evgeny Fedorov
http://www.youtube.com/watch?v=XiSR8jDVKaU
Since it costs $60-$70 to produce, earl companies must be hurting yes?
Dow soaring to all-time highs while commodity stawks, retail and equipment manufacturers are getting blasted to smitherines.
Houston energy company files Chapter 11http://www.bizjournals.com/houston/morning_call/2015/07/houston-energy-c...
Moar political correcctness, moar illegals, moar open borders, moar HB-1 visas, job cuts, layoffs, restructing and it'll get only moar Bullish is what they're saying on MSM.
It's no wonder Trump is widening his lead.
"Milagro Oil & Gas filed for chapter 11 bankruptcy protection Wednesday, joining the ranks of energy companies seeking refuge from diving commodity prices"
PEG BRICKLEY
Updated July 16, 2015 9:42 a.m. ET
http://www.wsj.com/articles/milagro-oil-gas-files-for-chapter-11-bankrup...
Do NOT worry; the data collection and "let's make up some lies" or "Murder Inc." will make sure no real traction is gained here. You will have a Bush or a Clinton to choose from and then they will select the winner. You can take that to the bank or Bankster. Ben Carson is the only candidate that could defeat the establishment because he has something the others do not have, the One who is the ultimate Authority of all creation.
Better manufacture some pretext for military intervention somewhere (preferrably oil rich nation), STAT!! High yield bubble popping is just one of the unpleasant side effects. Employment, or lack of, is the real issue and heading into election year? Perish the thought....
Hey yellen - could you fuck right off with your fucking buy algos?
The planet is getting sick of you.
All people will die physically and end up in one box or another; so give it time and your wish will come to pass. Hope you do not end up in the same box as her unless both of you are reconciled to God via Jesus and that would be just great.
OAS is my zero candidate.
Iran puts their oil back on the market... drive on Garth.
Iran deal puts the heat on higher cost Russian oil. BHO always minds his puppeteers.
daveO
hasn't russia signed a deal with iran, maybe last year, whereby it buy/trade iranian oil for tech support and to help construct reactors and other things...in turn it could take the oil and sell it to china, or keep it and sell russian to china. also european oil companies have been busy signing or reopening deals closed b/c of the embargo.
If oil is down on over production, what happens now the second largest oil consumers middle class has taken a bath on Chinext?
Oil should stay "low" per barrel for quite a while because the entire world is in an economic SLUMP with no end in sight. If it goes up, then it is based on rigging and/or complete supply disruption.
Based on the price at the pump in relation to the per barrel price; we, the people, are still getting the shaft. Gasoline should be at about $2.15-$2.35 per gallon except for the east coast and west coast because of their additional raping of their people with state taxes.
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Everything is awesome though, my stomach is full, the toilet flushes, the washer & dryer work, the fridge and pantry are plentiful...and people say there is no God..praise the Lord and thank you Lord!
Yes, Croc - everything will continue to be awesome -
as long as electricity still arrives through the wires and the food trucks still roll on the freeways.
Other than that, What Could Go Wrong ?
You don't want to know what it costs to park your car in a major European city.
Thats why most us use bicycles in and around the city.
The city I live in has 21st century infrastucture that makes anything in the USA look archaic.
you guys ever hear of city planning and modern infrastucture?
BTW, just got email from Dutch consumers union.
There were over 1 million new electric bicycles manufactured and sold here last year.
State of the art bicycles.
Big business.
Today was option expiry for WTI. Move here means shit. Let's see where the weeks settles at.