Oil price discussion and analysis

[Dona Ferentes]

Sunday night, Saudi Arabia admitted defeat in its attempt to maintain high world oil prices. They acknowledged being bested by the realities of the oil markets and consequently cut prices to their lowest point in over two years. OPEC+ (mainly Saudi Arabia and Russia) did not discuss further production cuts, only providing the usual details for next month's loadings.

OPEC+ had already claimed to reduce production by 2.2 million barrels per day in an effort to balance the market, with little lasting impact. This led to Angola leaving OPEC, and other African producers refused to discuss baseline quotas and caps.

Following December's inconclusive attempts by OPEC+ to stabilize oil prices after the brief boost from the October 7 Hamas attack on Israel, markets were hoping for more discussions on production cuts to support prices. Attacks on shipping in the Red Sea by Houthi militants from Yemen (supported by Iran) briefly raised prices but had no lasting impact.

Major oil traders are still sending large crude cargoes through the Red Sea and Suez Canal, with only Western-owned container and other vessels being targeted.

On Sunday, Saudi Arabia cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months, reducing it by $US2 a barrel. This move indicates Saudi Arabia's intention to maintain market share and compete against cheaper crudes from Iran and Russia.

The United States is also contributing to lower oil prices, producing approximately 13.2 million barrels of crude per day in the last week of 2023, while its inventories of gasoline and distillate both increased by more than 10 million barrels. US crude exports also rose by more than 1 million barrels per day to a record 5.2 million barrels per day during the same period.

On Monday and Tuesday, the market's response to this news was a sell-off, with US West Texas-style crude and Brent losing more than 3% before stabilizing during Tuesday's Asian session. These falls more than reversed the 2% gain in the first trading week of 2024.

 

[qldfrog]

Sunday night, Saudi Arabia admitted defeat in its attempt to maintain high world oil prices. They acknowledged being bested by the realities of the oil markets and consequently cut prices to their lowest point in over two years. OPEC+ (mainly Saudi Arabia and Russia) did not discuss further production cuts, only providing the usual details for next month's loadings.

OPEC+ had already claimed to reduce production by 2.2 million barrels per day in an effort to balance the market, with little lasting impact. This led to Angola leaving OPEC, and other African producers refused to discuss baseline quotas and caps.

Following December's inconclusive attempts by OPEC+ to stabilize oil prices after the brief boost from the October 7 Hamas attack on Israel, markets were hoping for more discussions on production cuts to support prices. Attacks on shipping in the Red Sea by Houthi militants from Yemen (supported by Iran) briefly raised prices but had no lasting impact.

Major oil traders are still sending large crude cargoes through the Red Sea and Suez Canal, with only Western-owned container and other vessels being targeted.

On Sunday, Saudi Arabia cut the February official selling price (OSP) of its flagship Arab Light crude to Asia to the lowest level in 27 months, reducing it by $US2 a barrel. This move indicates Saudi Arabia's intention to maintain market share and compete against cheaper crudes from Iran and Russia.

The United States is also contributing to lower oil prices, producing approximately 13.2 million barrels of crude per day in the last week of 2023, while its inventories of gasoline and distillate both increased by more than 10 million barrels. US crude exports also rose by more than 1 million barrels per day to a record 5.2 million barrels per day during the same period.

On Monday and Tuesday, the market's response to this news was a sell-off, with US West Texas-style crude and Brent losing more than 3% before stabilizing during Tuesday's Asian session. These falls more than reversed the 2% gain in the first trading week of 2024.

As soon as poo goes below the $60 a barrel, US shale oil vanished, there is a huge destruction of resources there and the cycle can restart

 

[mullokintyre]

As soon as poo goes below the $60 a barrel, US shale oil vanished, there is a huge destruction of resources there and the cycle can restart

That of course may well be the aim.
Shut down the competition than have the larger share of the market, thus a greater clout.
Mick

 

[divs4ever]

I still use it and many do when doing corner posts, using sump oil from mower etc in the hole before putting the post.
Helps again termite and rot.
I know there are some heavy metals but is it worse than arsenic which was used in treated pine logs up to very recently

but arsenic is a natural mineral .... ROFL ( and was formerly used as a tonic )

 

[Bailxtrader]

A few key pointers on USO...

• A Reuters poll published earlier this week showed that global oil supplies are expected to keep prices around $80 a barrel this year.
• International Energy Week in London may also bring some headlines for the oil market.
• This week will be a key one for WTI, with a bullish break above 80.00 potentially setting the stage for a quick continuation toward the mid-80.00s.

As the chart above shows, WTI is testing a key resistance zone, and 3-month highs, in the 78.50-80.00 area. The commodity has stretched somewhat away from its rising trend line, so a near-term pullback can’t be ruled out, but the two-week consolidation range just below that resistance area hints at strong buying pressure.

This week will be a key one for WTI, with a bullish break above 80.00 potentially setting the stage for a quick continuation toward the mid-80.00s. Meanwhile, traders may be willing to buy dips into the 75.00-76.00 range if they emerge.

 

[Garpal Gumnut]

A few key pointers on USO...

• A Reuters poll published earlier this week showed that global oil supplies are expected to keep prices around $80 a barrel this year.
• International Energy Week in London may also bring some headlines for the oil market.
• This week will be a key one for WTI, with a bullish break above 80.00 potentially setting the stage for a quick continuation toward the mid-80.00s.

View attachment 172093

As the chart above shows, WTI is testing a key resistance zone, and 3-month highs, in the 78.50-80.00 area. The commodity has stretched somewhat away from its rising trend line, so a near-term pullback can’t be ruled out, but the two-week consolidation range just below that resistance area hints at strong buying pressure.

This week will be a key one for WTI, with a bullish break above 80.00 potentially setting the stage for a quick continuation toward the mid-80.00s. Meanwhile, traders may be willing to buy dips into the 75.00-76.00 range if they emerge.

Thanks @Bailxtrader

Just the chart I was looking for and for which I was looking. It would appear the buyers are set for WTI.

With all the fighting over The Books it would appear that the fundamentals are aligned with the chart. $80 seems extraordinarily cheap for a barrel given the geopolitics which will only get worse as the masses in many countries go to the polls in the northern hemisphere.

I was going to lighten my Aussie Oilers given the recent fall in divies from some but this helicopter view of the WTI price makes me inclined to hold atm.

gg

 

[Bailxtrader]

Thanks @Bailxtrader

Just the chart I was looking for and for which I was looking. It would appear the buyers are set for WTI.

With all the fighting over The Books it would appear that the fundamentals are aligned with the chart. $80 seems extraordinarily cheap for a barrel given the geopolitics which will only get worse as the masses in many countries go to the polls in the northern hemisphere.

I was going to lighten my Aussie Oilers given the recent fall in divies from some but this helicopter view of the WTI price makes me inclined to hold atm.

gg

Friday’s rally saw crude oil break a major resistance zone between $78.00 to $79.10. This is where oil prices had repeatedly sold off from on multiple occasions since November. Now that we have a clean break above it, the technical path of least resistance has been confirmed to the upside.

The bulls need to hold their ground here to maintain the bullish momentum. If so, WTI could be heading towards the next potential resistance area around $82.00 next. An additional bullish target to keep an eye on is at $84.40, which corresponds with the 61.8% Fibonacci retracement level of the downswing from September.

The line in the sand for me is at around $78.00 now, where the rally in the latter half of last week occurred. Should oil prices break that level, then last week’s breakout signal will be invalidated. In this potential scenario, we could see a sharp withdrawal of bids, leading to a sharp correction. However, this is not my base case scenario.


-- Written by Fawad Razaqzada, Market Analyst

 

[Dona Ferentes]

• Brent oil +4% to $US69.53 a barrel
• US oil +4.5% to $US67.92 a barrel

Oil surged as the US government ordered a partial evacuation of its embassy in Iraq amid rising security risks.

West Texas Intermediate futures jumped 4.9 per cent to above $US68 a barrel, the largest gain since October. Brent Crude was poised to end the New York trading day up 4 per cent.

The US ordered some staff to depart the embassy in Baghdad and allowed military service-members’ families to leave the Middle East, officials said, after Iran threatened to attack US bases if talks over its nuclear program fall through.

The UK Navy also issued a rare warning to mariners that higher tensions in the Middle East could affect shipping.

The developments compounded speculation about possible supply disruptions in the Middle East after AFP reported that Iran threatened to target US military bases in the region if conflict breaks out.

 

[Bailxtrader]

As the conflict continues, prices have remained largely on the front foot with shallow dips. The Brent contract was testing Friday’s highs of around $78.00 at the time of writing. WTI crude oil was also up sharply to just over $76 per barrel. For US oil, the bulk of the gains are clearly due to the same factors supporting Brent oil – namely, war fears. But let’s not forget that the EIA weekly report showed a massive 11.473 million barrel draw in US inventories. That sort of number usually should send oil prices higher. But the impact of it was of course diluted by Middle East headlines.

For Brent, key resistance is seen around $78.00. A break above that could see oil prices rise to $80.00, the next psychological round handle. Support comes in around $76.75, marking the high from the day before. Below that $75.00 is the next big level. If tensions de-escalate and we see oil drop below $75.00, then that could open the door for a drop to low $70s again.

 

[Bailxtrader]

WTI Crude Oil Futures (CL) Technical Analysis​

Oil prices rallied 30% over the 10 trading days between May 30 and June 13. The CCI (Commodity Channel Index) reached its highest level since March 2022 by Friday’s close and has remained above 100 (overbought) since the rally began. The CCI is also close to dipping back below 100, which is a classic sell signal by some TA books.

WTI crude oil has also failed to take out last week’s high despite the escalated levels of fighting between Israel and Iran. And while WTI has stayed in the top half of Friday’s candle, price action has been choppy and volatility has receded somewhat.

Put together, I strongly suspect we’ve seen the best part of this rally. Unless Iran decides to wreak havoc on the Bab el-Mandeb Strait, it’s hard to see how oil prices could go significantly higher from here — especially given they’ve struggled to do so already this week. And as I’m feeling optimistic about a resolution before the two weeks are up, I suspect fading into false breaks may be the better approach than chasing an already extended rally.

 

[ShareSuccess]

This is one Smart Lady!!

 

[Bailxtrader]

Geopolitical tensions between Israel and Iran have escalated rapidly, with President Trump now considering direct US involvement. Yet despite the heated headlines, WTI crude oil has stalled after a 30% rally. With no fresh highs this week and volatility easing, traders are weighing whether the rally has run its course. If the US steps back from conflict, a risk-on rebound could follow — pressuring oil prices and reviving bets on Fed rate cuts.

Oil prices rallied 30% over the 10 trading days between May 30 and June 13. The CCI (Commodity Channel Index) reached its highest level since March 2022 by Friday’s close and has remained above 100 (overbought) since the rally began. The CCI is also close to dipping back below 100, which is a classic sell signal by some TA books.

WTI crude oil has also failed to take out last week’s high despite the escalated levels of fighting between Israel and Iran. And while WTI has stayed in the top half of Friday’s candle, price action has been choppy and volatility has receded somewhat.

Put together, I strongly suspect we’ve seen the best part of this rally. Unless Iran decides to wreak havoc on the Bab el-Mandeb Strait, it’s hard to see how oil prices could go significantly higher from here — especially given they’ve struggled to do so already this week. And as I’m feeling optimistic about a resolution before the two weeks are up, I suspect fading into false breaks may be the better approach than chasing an already extended rally.

 

[qldfrog]

Geopolitical tensions between Israel and Iran have escalated rapidly, with President Trump now considering direct US involvement. Yet despite the heated headlines, WTI crude oil has stalled after a 30% rally. With no fresh highs this week and volatility easing, traders are weighing whether the rally has run its course. If the US steps back from conflict, a risk-on rebound could follow — pressuring oil prices and reviving bets on Fed rate cuts.

Oil prices rallied 30% over the 10 trading days between May 30 and June 13. The CCI (Commodity Channel Index) reached its highest level since March 2022 by Friday’s close and has remained above 100 (overbought) since the rally began. The CCI is also close to dipping back below 100, which is a classic sell signal by some TA books.

WTI crude oil has also failed to take out last week’s high despite the escalated levels of fighting between Israel and Iran. And while WTI has stayed in the top half of Friday’s candle, price action has been choppy and volatility has receded somewhat.

Put together, I strongly suspect we’ve seen the best part of this rally. Unless Iran decides to wreak havoc on the Bab el-Mandeb Strait, it’s hard to see how oil prices could go significantly higher from here — especially given they’ve struggled to do so already this week. And as I’m feeling optimistic about a resolution before the two weeks are up, I suspect fading into false breaks may be the better approach than chasing an already extended rally.

View attachment 202298

View attachment 202299

Isn't your post a day old Mr @Bailxtrader ?
I think we are there already, oil down, risk on?

 

[Antirnator]

The chaos in the geopolitical conditions will bring a low and when things stabilise there will be a short term rise but ultimately the price will return to the rules of supply and demand. I have spoken

The problem is when and how much, and given the number of players in this geopolitical game there are too many variables. The biggest issue is how Trump's realignment will affect China and its manipulation of the markets. China needs it's oil from Iran.

 

[Dona Ferentes]

The chaos in the geopolitical conditions will bring a low and when things stabilise there will be a short term rise but ultimately the price will return to the rules of supply and demand.

Oil markets hit by OPEC+ supply surprise

Over the weekend, OPEC+ stunned markets by announcing it would speed up oil production increases starting next month. The decision is expected to lock in a global surplus later this year, placing downward pressure on prices.

While the move supports President Trump’s campaign focus on lowering fuel costs, it raises fresh concerns for producers in U.S. shale regions and even within OPEC itself. Saudi Arabia’s decision to raise prices following the announcement signals confidence that buyers will absorb the additional supply.
.

.... I have spoken

will the markets listen?

 

[Antirnator]

.

will the markets listen?

To me, no, my opinion is worthless to the markets

 

[Dona Ferentes]

To me, no, my opinion is worthless to the markets

I was asking if the markets would listen to the price signals. Sorry I didn't make that clear

 

[Garpal Gumnut]

Those 3 posts from you two boofheads made me laugh.

gg

 

[Antirnator]

I was asking if the markets would listen to the price signals. Sorry I didn't make that clear

Well given the fact that Saudis have been in special meetings at the Whitehouse about trade stuff, it seems like the US and the Middle east are cooperating on price controls to boost economic growth in both regions. Why would the markets resist positive momentum?

I am not saying any of this is good or bad.

 

[Garpal Gumnut]

I'm not too sure that that the POO will stay low. Admittedly all the fundamentals point that way now. Who knows though where the price will go with Trump in charge of the world and a seething Middle East and hungry oil barons in the US. Once i see the commentariat write stuff like this I turn contrarian. I believe that worst case the POO will collapse as it did a few years ago or "an event" will push it back over $100.



gg