IMO it is significant that oil closed over $89 yesterday and then move over $90 today. It appeared to me that there was no real support until $87. Now it appears there is some support at $89. If this holds through next week the next leg is up to over $95.
There is good support at $87 and very strong support at $81.
Higher oil prices are good for our Sweet 16 but I definitely do not want them to move up too quickly. The overall economy can't handle it. Steady improvement in the World's economy is good for us all plus, eventually, that is what will bring natural gas prices to a level we can make money on that side as well.
Dan
Oil Price
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prince_jake_33
- Posts: 242
- Joined: Mon Apr 26, 2010 2:21 pm
Re: Oil Price
The "natural gas act" has not been mentioned much. Harry Reid had been a great supporter of this act. According to Mr Pickens we can save 4 milion bbls of diesel fuel per day if we convert the 18 wheelers to LNG. I have wondered if CLNE would be an indicator for conversion to natural gas, but it is not doing much.
Re: Oil Price
The 18-wheelers will be using compressed natural gas ("CNG") not LNG. A lot of large trucks and buses already do. We could do this in five years and it would significantly reduce oil imports. But do we have the will?
Democrats have a very hard time doing anything that will help the oil and gas business.
Democrats have a very hard time doing anything that will help the oil and gas business.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price
From the Morgan Stanley report I received this morning (January 10):
Crude oil and product inventories have
declined well in excess of normal in recent months
supported by demand, which has moved to new record
highs. With non-OPEC supply seen falling by 380 kb/d in
2011, and demand set to increase by 1.1 mmb/d,
inventories are poised to fall further yet, constructive for
both flat price and structure. We see OPEC needing to
increase production in 1H11 and see this action as the
catalyst that will refocus the market on the supply side,
and its inability to meet growing demand, ultimately
lifting prices higher.
December and Year-End Summary: The S&P GSCI
finished higher by 9.4% in December, leaving total
returns higher by 9.0% in 2010, while the broader
DJUBS posted a 10.7% return in December and a
notable 16.8% on the year. All commodities moved
higher in December, with returns led higher by the
agriculture and grains sub-indices. Cotton was the best
performer in December, higher by 23%, with live cattle,
the worst performer, nonetheless gained 1.9%. For the
year as a whole, cotton was also the best performer,
gaining an incredible 98.2%, as inventories tightened
materially owing to recovering demand. A fundamentally
oversupplied balance left natural gas as the worst
performer which lost just over 40% in 2010.
Outlook: The need for increased OPEC production will
lower spare capacity, sending oil prices above $100/bbl
in 2011, in our view. Copper, our favorite base metal,
should continue its move higher as strong OECD
demand growth and resilient Chinese demand are
contained by supply downgrades. Corn and soybean
prices both need to rise to ration demand — simply put,
demand is running too hot given tight inventories and
limited acreage. Gold, in our view, will benefit from
continued investment demand, stemming from a
continued expansion in global money supply and
lingering sovereign risks.
Crude oil and product inventories have
declined well in excess of normal in recent months
supported by demand, which has moved to new record
highs. With non-OPEC supply seen falling by 380 kb/d in
2011, and demand set to increase by 1.1 mmb/d,
inventories are poised to fall further yet, constructive for
both flat price and structure. We see OPEC needing to
increase production in 1H11 and see this action as the
catalyst that will refocus the market on the supply side,
and its inability to meet growing demand, ultimately
lifting prices higher.
December and Year-End Summary: The S&P GSCI
finished higher by 9.4% in December, leaving total
returns higher by 9.0% in 2010, while the broader
DJUBS posted a 10.7% return in December and a
notable 16.8% on the year. All commodities moved
higher in December, with returns led higher by the
agriculture and grains sub-indices. Cotton was the best
performer in December, higher by 23%, with live cattle,
the worst performer, nonetheless gained 1.9%. For the
year as a whole, cotton was also the best performer,
gaining an incredible 98.2%, as inventories tightened
materially owing to recovering demand. A fundamentally
oversupplied balance left natural gas as the worst
performer which lost just over 40% in 2010.
Outlook: The need for increased OPEC production will
lower spare capacity, sending oil prices above $100/bbl
in 2011, in our view. Copper, our favorite base metal,
should continue its move higher as strong OECD
demand growth and resilient Chinese demand are
contained by supply downgrades. Corn and soybean
prices both need to rise to ration demand — simply put,
demand is running too hot given tight inventories and
limited acreage. Gold, in our view, will benefit from
continued investment demand, stemming from a
continued expansion in global money supply and
lingering sovereign risks.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price
From RBC "Global Energy Commodity Price Update" dated January 11
China Will Again Set Pace in 2011
World oil prices have rebounded sharply, reflective of a global GDP growth rate that the IMF pegs at 4.2% in 2011, and retreating fears surrounding a double-dip recession. In our eyes, the global oil price equation in 2011 will revolve around the pace at which China’s oil demand expands, while WTI prices will also take its cues from the Cushing oil inventory picture.
On balance, crude oil fundamentals have firmed – complements of China and the Middle East, which fueled global oil demand growth of some 2.5 million bbl/d in 2010. Although OPEC-11 spare capacity and OECD forward cover should tighten further in 2011, a crunch could occur in 2012, with OPEC-11 usable spare capacity falling into the 4.3 million bbl/d (4.7% of global supply) neighborhood. These factors have been reflected in our WTI oil price outlook of US$87/bbl in 2011 and US$90/bbl in 2012 – with upward bias.
My take is that if OPEC spare capacity shinks then oil prices will move north of $100/bbl. - Dan
China Will Again Set Pace in 2011
World oil prices have rebounded sharply, reflective of a global GDP growth rate that the IMF pegs at 4.2% in 2011, and retreating fears surrounding a double-dip recession. In our eyes, the global oil price equation in 2011 will revolve around the pace at which China’s oil demand expands, while WTI prices will also take its cues from the Cushing oil inventory picture.
On balance, crude oil fundamentals have firmed – complements of China and the Middle East, which fueled global oil demand growth of some 2.5 million bbl/d in 2010. Although OPEC-11 spare capacity and OECD forward cover should tighten further in 2011, a crunch could occur in 2012, with OPEC-11 usable spare capacity falling into the 4.3 million bbl/d (4.7% of global supply) neighborhood. These factors have been reflected in our WTI oil price outlook of US$87/bbl in 2011 and US$90/bbl in 2012 – with upward bias.
My take is that if OPEC spare capacity shinks then oil prices will move north of $100/bbl. - Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group