WTI Crude Crashes Below $50 As Hedgies Lose Faith In OPEC

Tyler Durden's picture

Oil is headed for its biggest weekly loss since early March as signs that OPEC will continue with output reductions are offset by growing U.S. production and inventory gluts. Having tried and failed to spark some momentum yesterday (via Saudi jawboning and Goldman confidence), WTI Crude just plunged below $50 for the first time since March.

"It all comes down to whether OPEC can deliver inventory cuts," Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, said by telephone. "So far we haven’t seen a lot of evidence that they’re succeeding."

It seems Goldman's muppets aren't buying it this time.

Erasing 70% of the early April bounce...

“We are once again seeing the emerging stalemate between OPEC and non-OPEC cutting efforts on one side and rising U.S. production on the other,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “We are currently testing the lower end of the range. This market is unlikely to go anywhere for the foreseeable future.”

OPEC has lost the confidence of the hedge funds.

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John Law Lives's picture

Crash away.

Black_Gold_FUBAR

Raffie's picture

OH NOES!

The magic bulls ran out of magic?

We were at a CRUSH a few months ago and oil tankers being turned away because there is no storage.

SO...... where is all this oil being stored (or dumped)?

I think it takes longers to produce the oil into a fuel then to pump it out.

Maybe it's just me thinking this.

 

FreeShitter's picture

Rumors of cuts, intentional fires set, pipelines sabotaged...what the fuck else is needed? War, baby.

ZippyBananaPants's picture

What would the Clampett's do?

happyfrog's picture

It will keep tanking until Gartman says he's short. That will be the bottom... again.

brushhog's picture

Temporary drop, It'll be pushing $60 by june-july...driving season. They wont miss an opportunity to gauge the public.

ebworthen's picture

"gouge" - but +1, usually right before Memorial Day (May 29th).

Cheaper gas is fine with me.

crossroaddemon's picture

Good. It's still too damn expensive, but every little bit helps...

 

mily's picture

ABC...as expected

Tugg McFancy's picture

I'm glad Sloth Hansen could bring us the news.

BigFatUglyBubble's picture

Instead of mexico wall lets make firey gasoline moat.

Or we can build the wall out of US auto inventory buildup

Sapere aude's picture

The U.S. production figures are FAKE, everyone knows it. You only have to look at legacy wells to realise the EIA are rigging the figures.

I suppose we will roll out the picture of the oil tankers again, you know, the one used to suggest XXX number of tankers were filled with Iranian Oil, only then for the same picture to be used to suggest a convoy of oil tankers off Galveston...

 

Sadly the guy/girl who photoshopped it knew jack shi t about oil tankers, or the Plimsoll line, as half the ships were empty, half were not even oil tankers.

 

Sapere aude's picture

brushhog. It will be pushing $100 before long, when the world refuses to sell oil at $50 to subsidise U.S. imports.

This 'surplus oil' story is simply to keep oil low to make it cheaper for the U.S. to import.

With legacy wells, there is no way on earth production is increasing, and whilst production on single fields can increase, such as Permian, this is because the Red Queen Syndrome has not yet geared up on the Permian, but it will, as sure as eggs is eggs.

1000 wells requires another 500 at 6 months just to keep production static and so ad infinitum until like the Monterey its a busted flush

 

 

sinbad2's picture

Payback for Trumpstein threatening Russia and China.