If this keeps up, you guys may like me again!
Take a look at this chart: https://www.tradingview.com/chart/wBMe44ta/
Except for psychological resistance at $50 and $60, I don't so any real technical resistance until $64.
EIA's admission that their previous production volumes were wrong (See: http://www.eia.gov/todayinenergy/detail.cfm?id=22732 ) is just part of the reason oil prices were up today.
On Meet the Press yesterday a Middle East expert said "ISIS is expanding like 'crazy' not only in Iraq, but across the entire region". These cats are a serious threat to global oil supplies and it is about time the market added some risk premium.
I have also seen several reports that OPEC members are asking for an emergency meeting to do something about the price of oil. Most OPEC members are broke and they have populations that like to kill leaders that don't keep giving them stuff.
Oil Prices
Oil Prices
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices
With the release of the Petroleum Supply Monthly (PSM) later today, EIA is incorporating the first survey-based reporting of monthly crude oil production based on an expansion of its survey program earlier this year. Today's PSM includes EIA's first reporting of June crude oil production. EIA also begins using new survey data from multiple states and regions within the United States, and revises figures previously reported for January through May 2015.
EIA's lame admission that they have been overstating production since January. [I have been telling EPG members this for months.]
EIA estimates U.S. crude oil production in June 2015 at 9.3 million barrels per day (b/d), a decrease of approximately 100,000 b/d from the revised May 2015 figure. Production estimates released in the PSM for January through May were revised downward by 40,000 b/d to 130,000 b/d. The largest revisions in volume include decreases of oil production in Texas (ranging from about 100,000 b/d to 150,000 b/d) and increases in the federal Gulf of Mexico (ranging from about 10,000 b/d to 50,000 b/d). U.S. crude oil production for the first six months of 2015 averaged 9.4 million b/d.
This is a repeat of 2009. EIA will keep "revising" both their production volumes and demand forecasts. BELIEVE ME: Demand for refined products is much higher than EIA and IEA have been reporting. There is NO WAY that U.S. crude oil inventories can be declining if their estimates that crude oil production exceeds demand by 1.5 to 2.0 million barrels per day are accurate. NO WAY!
EIA's lame admission that they have been overstating production since January. [I have been telling EPG members this for months.]
EIA estimates U.S. crude oil production in June 2015 at 9.3 million barrels per day (b/d), a decrease of approximately 100,000 b/d from the revised May 2015 figure. Production estimates released in the PSM for January through May were revised downward by 40,000 b/d to 130,000 b/d. The largest revisions in volume include decreases of oil production in Texas (ranging from about 100,000 b/d to 150,000 b/d) and increases in the federal Gulf of Mexico (ranging from about 10,000 b/d to 50,000 b/d). U.S. crude oil production for the first six months of 2015 averaged 9.4 million b/d.
This is a repeat of 2009. EIA will keep "revising" both their production volumes and demand forecasts. BELIEVE ME: Demand for refined products is much higher than EIA and IEA have been reporting. There is NO WAY that U.S. crude oil inventories can be declining if their estimates that crude oil production exceeds demand by 1.5 to 2.0 million barrels per day are accurate. NO WAY!
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices
oil is up a lot from the recent lows (about 25%), and some, but not most, of the stocks you follow are not up that high (some are higher than 25%, I know). My question is, for stocks to collectively rise appreciably are the companies going to have to show a couple of quarters of real bottom line improvement? I notice that the mlps in particular have been hesitant to rise much.
Re: Oil Prices
1. The upstream MLPs have so much production hedged at higher prices that this recent $10 increase in WTI has little to no impact on them. It does however, improve their outlook for 2016.
2. In 2009 it was the high quality small-caps that made the biggest runs. Take a look at the Small-Cap Growth Portfolio in last week's newsletter. I believe my valuations are now conservative.
3. There is a lot of money now looking at this sector. It was obviously grossly oversold early last week. However, many investors are rightfully concerned that this up tic in oil prices may fade. We do need oil prices up near $60/bbl before the fundamentals really look a lot better for most of these companies. The long-term trend line (adjusted for the spike in the U.S. dollar) is now around $75/bbl. However, I think it take at least six months to get back to that level. The global oil market is MUCH TIGHTER than EIA and IEA have been reporting, BUT their is still a lot of skeptics out there.
This is a short covering rally. There were a lot of NYMEX contracts sold short. Any traders that did this on margin, which most of them do, and did not cover today will get margin calls in the morning.
A bullish storage report on Wednesday (although they are total SWAGs by the EIA) could send oil a lot higher. Speculators know this of course.
A lot of short sellers were really pissed at this morning's admission by EIA that they have been overstating U.S. oil production. When are we going to learn not to trust the government?
2. In 2009 it was the high quality small-caps that made the biggest runs. Take a look at the Small-Cap Growth Portfolio in last week's newsletter. I believe my valuations are now conservative.
3. There is a lot of money now looking at this sector. It was obviously grossly oversold early last week. However, many investors are rightfully concerned that this up tic in oil prices may fade. We do need oil prices up near $60/bbl before the fundamentals really look a lot better for most of these companies. The long-term trend line (adjusted for the spike in the U.S. dollar) is now around $75/bbl. However, I think it take at least six months to get back to that level. The global oil market is MUCH TIGHTER than EIA and IEA have been reporting, BUT their is still a lot of skeptics out there.
This is a short covering rally. There were a lot of NYMEX contracts sold short. Any traders that did this on margin, which most of them do, and did not cover today will get margin calls in the morning.
A bullish storage report on Wednesday (although they are total SWAGs by the EIA) could send oil a lot higher. Speculators know this of course.
A lot of short sellers were really pissed at this morning's admission by EIA that they have been overstating U.S. oil production. When are we going to learn not to trust the government?
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices
The Organization of the Petroleum Exporting Countries signaled Monday that it may have had enough of low oil prices after keeping them down to pressure U.S. producers, sending crude futures soaring.
In its August bulletin, the oil cartel said it "stands ready to talk to all other producers," noting worries that cheap oil would hurt OPEC's ability to build new projects and expand capacity.
OPEC will likely talk to Russia and maybe Mexico's state-run oil giant, said Phil Flynn, senior market analyst for Price Futures Group. "Venezuela is already talking to Russia."
Read More At Investor's Business Daily: http://news.investors.com/business/0831 ... z3kR2DsPA6
In its August bulletin, the oil cartel said it "stands ready to talk to all other producers," noting worries that cheap oil would hurt OPEC's ability to build new projects and expand capacity.
OPEC will likely talk to Russia and maybe Mexico's state-run oil giant, said Phil Flynn, senior market analyst for Price Futures Group. "Venezuela is already talking to Russia."
Read More At Investor's Business Daily: http://news.investors.com/business/0831 ... z3kR2DsPA6
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group