Crude Oil Opens Above $38, Takes Out 1-Week Highs
With hedge fund short positions near record highs and speculators at their least bullish in almost five years, oil prices have spurted higher in the early trading as the diplomatic gloves come off in The Middle East. Despite record levels of crude inventory around the world, WTI Crude is trading above $38, up over 3% from its $37.07 close on New Year's Eve. Algos ran the stops above last week's highs ($38.32) but for now prices are not as excited as many would have expected. Brent, for now, is outperforming and trade 45c rich to WTI.
WTI tags last week's highs but is holding for now...
Some context - back to the early December inventory build levels...
'
As expected, Brent is outperforming - now trading 45c above WTI...
Hedge fund shorts near record highs may get hurt...
But don't forget that while a "war premium" makes sense in the marginal production barrel sense, with inventories at their limits amid a record glut, unless this escalates even more, the physical demand/supply divergence remains vast...
And of course, if oil prices are higher then US equity prices are higher because "lower oil prices are unequivocally good for America"... oh wait.
Source: Bloomberg
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And we're off! Another investment week.
Popcorn this time?
Once the Iranian tankers hit the high seas, the price will plummet to $30.
and then it'll sky rocket once "terrorists" hit them with missiles that somehow came from the direction Saudi Arabia... hmmm
Opens at $38 and back down to $37.15 now... So much for the SA / Iran bounce... Must depend on more hopium...
Oh, so you mean this shit is 'good' for the banks who sold those hedges? Whatta coincidence!
Yellen is bidding this bloated market and the only one who will take delivery of these $38 oil contracts is yellen - rather than Kushing, oil will delivered to yellen's oversized and rotting cunt...
....it's the only place in the world than hasn't been used for WTI storage.
Crude lingers between $40 and $50.
Stocks lose 50%
Crude off nearly $100 from its high and gains only $1 a barrel on rising tensions? That is nothing.
Gold up less than $5. That is also peanuts.
Gold now up less than $3. The markets are completely controlled.
From $110 to $38 is not $100 unless you're counting that fraudulent spike to $140 about 8 years ago that lasted a week. Oil never should have been at $110 except for QE. Oil was $35 before QE and went back to $35 after QE. It's harder to manipulate 100 million barrels of oil each day than it is to manipulate electronic stock prices.
Getting really tired of the continually increasing number of ads on ZH. This is a mostly text site, but it takes at least a minute to load when not using the no script add-on.
I have Firefox (Mozilla.org) for my browser and have the free add-on Ad-Blocker Plus. Absolutely works and cuts out 99% of ads on all websites, ZeroHedge included. Firefox is also free. Good luck!
I normally load ZH in Mozilla with the No Script addon enabled. No Script prevents any scripts from running and really streamlines the page. But occasionally, I load it in IE (with no ad blocker) if I feel like posting a comment. I was actually going to make a comment about something entirely different but was so annoyed at the ads that I had to vent a little.
After a clean install I forget my ad-blocker etc. before loading this site once. It's horrendous. I can't believe anyone reads ZH that way.
I roll a modified host file, and get zero ads. Where I can, I block the same list on the network firewall.
I <3 root
LOL!!! S&P to new highs within a month. USDX will top 108 before summer... because "markets"...
I agree with you, by the summer the spx will make all time new highs, the usd will top 104 and oil will be at 20 something a barrel.
Does any one knows where you can see the short positions and the where the stops are placed? I am unable to find this on the web.
Covering before Iran comes online, same as the 9% gain a week or ago. Just short covering.
naw. the supply-demand curve causes those wild swings. /sarc.
The Saudi's will need money to fund their war.
SO...
They'll pump at 110% and this little spike will be the last death cat bounce in oil.
Iran also need more money and so does Russia and they'll also increase production.
The infrastructer may be missing the needed investments but that effect will only be felt in 3 to 5 years from now.
Saudi pumping at 110% causes their profits to go down. WAY down, along with all other oil suppliers. When Saudi needs more money, and that's coming soon, they will return to normal supply, and prices will return to actuarial-maximized trend ($80-100/bbl), oil companies will be back to maximized profits, and anyone who invested in quality downstream oil today will have doubled their plays, if not more. Iran, Russia ... nobody else matters in terms of their ability to impact market prices. Only Saudi can ramp up and sustain a meaningful over-supply.
and now DOW futures suddenly went from -1% to plus...
war and a stockmarket make it pretty predictable...
Will Obama take credit for starting WWIII in his CNN propaganda town hall this week?
Invesments? Oil is the only screaming bargain right now. Buy 1x and 2x pure play oil (USO, DBO, etc.), and some quality oil equities (TOT, STO, CVX, etc.). Ride it for who knows how long (2-3-4 years?). Eventually, Saudi-Exxon will need higher profits and will stop flooding the market, and will return to actuarial-maximized margins, and your investments will have doubled, if not tripled.
Bonus points: when oil returns to trend ($80-100/bbl), expect a big underdamped spike, perhaps $150/bbl or more. That's your cue. Thank me later.
Flooding the market is part of a bigger strategy. Low oil price is part of a bigger strategy. This does not just "happen".
Everyone knows that..... the question is, why? Some say Saudi-Exxon is dropping the price to put shale drillers out of business, and to curtail new global shale investment, and/or to buy upstream shale companies at bargain prices. Some say Saudi-Exxon is punishing Russia. Some say they are doing it to weaken other OPEC players, so that when supply is returned to normal, Saudi will be much stronger. Some say that renewables will soon surpass fossils, so everyone is over supplying before demand declines (which is a silly idea). My personal opinion is that Saudi-Exxon wants to acquire a number of upstream shale drillers, and will do so over the next 2 years, before they resume normal supply floes.
I had to upvote. While I still think this is all part of a bigger idea. US has problems with that price (Alaska, Canada and sure Venezuela) they have to fight to get back to normal while still fighting russia, saudis and the rest of OPEC for being non conformant. It is all complex. But the people still favor low gas prices and are happy, the architects are not.
So to say, there are problems out there. They have to be handled. And this will be a devastating mess. Talking about oil black swans that are expected seems to me like lottery forecasts.
Current investor in TLW.L but looking to get heavy in oil.
What do you mean by 1x and 2x pure play oil?
ORIG is worth the gamble too if you don't mind sitting on it for a year possibly.
"$20 oil could be a possibility if this happens" https://www.youtube.com/watch?v=qudNktYwRNo
'How Big Oil Conquered the World' https://www.youtube.com/watch?v=ySnk-f2ThpE&feature=youtu.be&t=0
Look at the Volume Tyler?
New Years Eve is over, and sensationalisms have passed...
Gain already controlled and cut in half. Oil is the new gold.
stacking record numbers of barrels in the backyard..... hope the neighbors don't complain.
no smoking here, please.....
The House of SAUD is about to FALL. This will be an interesting year.