Oil (brent/light-crude) Fundamental Update 13:32:16 (UTC)
アップデート済
The president of OPEC mentioning a February meeting with the Russian oil Minister. An emerging meeting could be held as early as this coming week. The question is, what is the real impact of price of a barrel of sweet crude with so many moving parts across a trillion-dollar global supply chain. The president of OPEC mentioning a February meeting with the Russian oil Minister. An emerging meeting could be held as early as this coming week. The question is, what is the real impact of price of a barrel of sweet crude with so many moving parts across a trillion-dollar global supply chain. Fundamental headwinds include the impact on jet fuel demand and tensions in the middle east (Libya).
What's to come:
OPEC and the Saudi Oil minister wants to prove to the public right now that they are reacting proactively and display an earner willingness to react.
Output will be slashed. This was seen as the company went public back in December.
As mentioned, Libya has just shut down an 800,000 barrel/day pipeline. This compensates easily for the demand impact stemmed from the virus outbreak that the markets ignored; which is the issues on the supply side of Oil . Sentiment is so negative, that the market is fixated on the demand headlines and ignore issues on the supply side. Libyan production being offline for the last 2 weeks, has kept over 2 million barrels off of the market. When Libya went offline, it was assumed this was political. I think this shows something much worse, which is a theatre of war and thus a destruction to infrastructure.
Jet fuel prices in Asia are crashing. The question forward is, what’s the timeframe for the Coronavirus?
The U.S. rig count is at multi year lows, since last summer. At the current rig count level, the industry can’t grow. It would be at best a flatline, and probably a decline. A catalyst needs to come desperately, and this catalyst would be a spike in oil prices. Unless oil prices recover from current levels, there will be a structural shortage of WTI for years to come.
Bias is now long for both fundamentals and technical for WTI going forward this Q1
13:32:16 (UTC)
Mon Feb 3, 2020
What's to come:
OPEC and the Saudi Oil minister wants to prove to the public right now that they are reacting proactively and display an earner willingness to react.
Output will be slashed. This was seen as the company went public back in December.
As mentioned, Libya has just shut down an 800,000 barrel/day pipeline. This compensates easily for the demand impact stemmed from the virus outbreak that the markets ignored; which is the issues on the supply side of Oil . Sentiment is so negative, that the market is fixated on the demand headlines and ignore issues on the supply side. Libyan production being offline for the last 2 weeks, has kept over 2 million barrels off of the market. When Libya went offline, it was assumed this was political. I think this shows something much worse, which is a theatre of war and thus a destruction to infrastructure.
Jet fuel prices in Asia are crashing. The question forward is, what’s the timeframe for the Coronavirus?
The U.S. rig count is at multi year lows, since last summer. At the current rig count level, the industry can’t grow. It would be at best a flatline, and probably a decline. A catalyst needs to come desperately, and this catalyst would be a spike in oil prices. Unless oil prices recover from current levels, there will be a structural shortage of WTI for years to come.
Bias is now long for both fundamentals and technical for WTI going forward this Q1
13:32:16 (UTC)
Mon Feb 3, 2020
ノート
OilTaking a lot at crude, we’re seeing price bounce after its low at 55.90; the same point from the August swing low. If this price is broken, the next area of support will be around 2- year lows so I think a bounce here combined with the technical from my other article will hold steady with former support possible turning into resistance. The $55.6 price will be an interesting price to watch. This is also earnings week which could move equity markets from companies like GM , Uber, Twitter , Disney, etc. Robust earnings could offset the risk-aversion that we’ve seen because of the coronavirus which is important to remember. Overall the Corona virus seeks to disrupt global supply chain networks powered base line to growth
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