Oil Price Watch

[uls]

and so far brent can't even fall to 100 despite the selling pressure in risk assets

[niky]

months ago when brent was freefalling from 120+ to -100 i said the right price for brent is around 100. at that time mainstream media kept saying the price of oil would keep falling coz there's too much oil but i stuck to my conviction that there's a price floor either 90 or 100

The MSM don't know nuthin'. They're boosters and yes-men for their corporate bosses, and at the time they were trying to buoy confidence in the US economy.

[uls]

So ULS, you are Smarter than the SHELL CEO too.

Shell CEO sees oil price falling more in 2012

Demand is quite clearly softening, but I wouldn’t say it’s collapsing. Today the market has enough oil, more oil than we need…I see (oil prices) softening in the second-half,” Voser told CNBC on the sidelines of the World Gas Conference in Kuala Lumpur on Tuesday. CNBC, June 5, 2012. a Few Hours ago.

Hey ULS, has it ever occurred to you that people other than yourself can be Right?

These people actually work in the Oil and Financials Industry, while you are just an Armchair analyst.

October is OVER and Brent is still above $100

where's the "softening in the 2nd half"?

[uls]

Oil Markets Brace for 'Demand Destruction' After Sandy - CNBC

Hurricane Sandy may inflict a negative hit to demand for crude oil and fuel products as production at U.S. East Coast refineries comes to a standstill, reducing demand for the primary input.

Meanwhile, diesel and gasoline consumption by businesses and households could also be cut sharply after New York and other large cities are shut down by the storm, reducing economic activity. Power outages lasting as long as ten days may reduce demand further.

The supply of gasoline, diesel and jet fuel into the U.S. East Coast ground almost to a halt on Monday as Hurricane Sandy forced the closure of two-thirds of the region's refineries, its biggest pipeline, and most major ports, Reuters reported.

[vinj]

October is OVER and Brent is still above $100

where's the "softening in the 2nd half"?

Ginebra fan daw si Shell CEO... Last minute rally yan tapos buzzer beater.

[Ry_Tower]

I think Shell CEO was misquoted by media. He meant 2nd part of 2nd half. So may 2 months pa siya.

[uls]

haha

dapat Q4 sinabi niya hindi 2nd half

[uls]

i still think Brent will end the year above $100

[Ry_Tower]

i still think Brent will end the year above $100

I have to agree. Pero baka hindi $110 medyo below. Sama pa din ng recent trends ng reports sa US at euro eh.

haha

dapat Q4 sinabi niya hindi 2nd half

Playing safe, kaya hinabaan yung prediction.

[Ry_Tower]

Brent futures still not over $110 so I guess the last price rollback will hold. Walang bawian next week. hehe

[uls]

for those who still think it only takes $25 to produce a barrel of oil in Canada

Mining Canada's Oil Sands: Suddenly Not a Sure Thing - WSJ.com

The new caution concerning oil sands in Canada comes amid sharply rising costs for everything from labor to construction material and contracting. These days, even the most cost-efficient oil sands producers need U.S. benchmark prices of at least $50 a barrel to justify investment in new projects, executives and analysts figure. Many of those projects—with newer technology using steam to coax bitumen to the surface—are going ahead or forecast to grow quickly.

But for operators who mine bitumen and produce synthetic crude from it, the break-even threshold can exceed $100 a barrel. U.S. crude is currently trading well under $90 a barrel.

Bloomberg Syncrude Sweet Blend Crude Oil fob Edmonton Spot Price Chart - USCRSYNC - Bloomberg

Bloomberg Syncrude Sweet Blend Crude Oil fob Edmonton Spot Price
USCRSYNC:IND
83.99000

[uls]

concern over the US fiscal cliff is driving risk-off sentiment

risk assets are being dumped (which includes oil)

flight to dollar

Analysis: If U.S. goes over fiscal cliff, dollar could fly | Reuters

(Reuters) - In times of trouble, investors tend to flee to the comfort of the U.S. dollar -- even when the trouble is emanating from the United States.

If Congress fails to reach a deficit reduction deal by the end of the year, it will automatically trigger big spending cuts and tax increases in 2013. This so-called "fiscal cliff" would hit the still-recovering U.S. economy hard.

i did say brent will end the year above $100 but it doesnt mean it won't fall below $100 again before the end of the year

it could revisit the June $88 low

last time the selloff was caused by fear of Greece leaving the euro which could cause contagion (other countries also leaving) which would mean the end of the euro project

now the fear is the fiscal cliff could send the US back into recession

if this selling momentum continues brent will fall below $100

but again i wanna emphasize the $100 breakeven price --- if the price stays below $100 too long it will cause supply destruction which will drive the price back up

[Ry_Tower]

concern over the US fiscal cliff is driving risk-off sentiment

risk assets are being dumped (which includes oil)

flight to dollar

Analysis: If U.S. goes over fiscal cliff, dollar could fly | Reuters



i did say brent will end the year above $100 but it doesnt mean it won't fall below $100 again before the end of the year

it could revisit the June $88 low

last time the selloff was caused by fear of Greece leaving the euro which could cause contagion (other countries also leaving) which would mean the end of the euro project

now the fear is the fiscal cliff could send the US back into recession

if this selling momentum continues brent will fall below $100

but again i wanna emphasize the $100 breakeven price --- if the price stays below $100 too long it will cause supply destruction which will drive the price back up

Let's say around end of Dec '12, $100 na brent, mga addt'l P5-8 na lang kaya aasahang rollback from the current price during the remaining months? ceteris paribus

[niky]

Let's say around end of Dec '12, $100 na brent, mga addt'l P5-8 na lang kaya aasahang rollback from the current price during the remaining months? ceteris paribus

I doubt December will end on a low. The traditionally high holiday demand will be tempered by the recession and economic instability, but that uptick will still keep the prices as high as they are now, at least.

[uls]

speculators reduce long positions on Brent but still net long

Hedge Funds Reduce Brent Crude Net-Longs to Three-Month Low - Businessweek

Hedge funds and other money managers reduced bullish bets on Brent crude in the week ended Oct. 30 to the lowest level in almost three months, according to data from ICE Futures Europe.

Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 91,462 lots, the London-based exchange said today in its weekly Commitment of Traders report. That’s down by 2,545 lots, or 2.7 percent, from 94,007 last week and is the lowest since Aug. 7.

Bearish bets by producers, merchants, processors and users of Brent outnumbered bullish positions by 90,036, compared with 76,788 lots last week. Swaps dealers were net-long 33,568 contracts, from 22,527 a week earlier.

Money managers’ net-long bets on ICE gasoil futures and options fell to 73,197 positions from 75,740 last week, the data showed.

[uls]

Oil Prices Surge, Following Equities Higher

NEW YORK--Fueled by a strong Election Day jump in equity markets, crude futures surged 3.6% higher Tuesday.

Analysts said there were no crude-specific headlines during the trading day that accounted for the oil rally, which was accompanied by a 3% rise in gasoline futures. The increase in oil also was joined by a 0.8% rally in the S&P 500, which typically gets a boost on Election Day.

Front-month crude for December delivery on Nymex jumped $3.06 to settle at $88.71 per barrel. Brent futures settled at $111.07, up $3.34 or 3.1%.

[Ry_Tower]

As quickly as it has risen, price falls overnight as well. The euphoria was short lived because a clash in budget by US is eminent as Uls said.

[niky]

Wasn't it more of a shift to commodities as money moved out of the stock market for safer havens?

[uls]

yup

money moved from risk assets to safe haven assets coz of the fiscal cliff

US 10 yr note yield



oil and stocks rallied on election day but pulled back post election. Brent rose to $111 and WTI $89 on Nov. 6 then Brent fell to $106 and WTI $84 last night

gold didnt pull back coz Obama win = Bernanke stays = loose monetary policy (Romney wanted to replace Bernanke)

[uls]

Brent edges above $107 after slump; U.S. fiscal woes weigh | Reuters

SINGAPORE, Nov 8 (Reuters) - Brent crude rose above $107 per barrel in Asia on Thursday as an almost 4 percent slump in the previous session, its biggest fall in about a year, lured in some buyers although worries on the U.S. fiscal cliff and Europe's woes kept a lid on gains.

Oil led a slump in commodities on Wednesday as concerns shifted to a shaky global economy and its impact on demand, after the uncertainty about the U.S. presidential race faded with Barack Obama's re-election.

it's not only the US fiscal cliff. there's Europe and China

Weakness in the U.S. economy at a time when China is struggling to push up its growth rate and Europe is grappling with its debt crisis may derail the global economic recovery even further.

Europe's crisis swung back into focus after European Central Bank Chairman Mario Draghi said the euro zone economy will remain weak in the near term, even as he hinted at unlimited intervention in the region's sovereign markets.

Investors will also be monitoring the one-in-a-decade leadership change in China, the world's No. 2 energy consumer, as President Hu Jintao hands over charge to his successor Xi Jinping, although there are no real concerns about changes in policy.

in an earlier post i said Brent could fall below $100 before the end of 2012 if selling momentum continues. but of course there are factors that can prevent that from happening

But supply concerns with increasing violence in the Middle East are expected to keep prices supported.

Syrian rebels fired mortars at President Bashar al-Assad's palace in Damascus on Wednesday but missed, in an attack underlining the growing boldness of forces fighting to end his family's 42 years in power.

In Yemen, a gunman shot dead a Yemeni security officer near the interior ministry in the centre of the capital Sanaa on Wednesday, a police source said, blaming al Qaeda.

The U.S. and Yemen's neighbour Saudi Arabia are keen to stop al Qaeda and other Islamist militants strengthening their hold on a country which is close to major shipping lanes.