This just out from out middle eastern overlords, Barrons of Barrels.
“We are not going to change our minds because the prices went to $60 or to $40,” Suhail Al-Mazrouei, the United Arab Emirates’ oil minister said at the conference, according to Bloomberg. “We’re not targeting a price; the market will stabilize itself.”
I think it’s fair to say, judging from statements like that, they invite more selling. For whatever reason, OPEC is intent on walking oil lower.
Bear in mind, these are the same people who maliciously controlled the price at unnatural levels, nearly breaking the backs of all oil importers. Now that the table has turned and the west has become keen developers of crude, a war for market share has ensued.
Oh, one more thing before I go. Remember when I said the world ran on crude?
If you enjoy the content at iBankCoin, please follow us on TwitterThe real damage, however, is yet to come. By some estimates the wreckage, particularly for the oil-services companies, may add up to a stunning $1.6 trillion annual loss, at oil’s current $57 low, predicts Eric Lascelles, RBC Global Asset Management chief economist.
This week is going to be an utter bloodbath. The fed is going to hint at tightening, on top of Oil breaking into the 40’s.
Its going to be ugly.
The Fed is more likely to step in and buy equity futures. And don’t expect any tough talk from them ou of this meeting.
I don’t expect oil to catch a bid.
This was not supposed to happen. All inflation is good and the only way to keep the lipstick on the debt bomb pig we call an economy. Wages were supposed to rise not crude crash into a deflationary black hole. How does the price of everything else now not collapse?
I trust the Saudi economics minister more than the yapping mouths on tv or on this site.
We’re edging towards a permanent, global deflationary environment….zero interest rates and monetary easing were not sufficiently stimulating the economy. Most advanced economies were barely growing at all.
Now we’re getting this miraculous drop in oil prices that will fuel consumer demand for more of everything. That will lower the cost of most end products, delivering record profits to most companies. Plus it will destabilize some our most prominent adversaries (Russia, Iran, Libya..Venezuela)…it’s a Christmas gift that everyone is overlooking because its being accompanied by some short-term S&P price retracement. It’s nirvana.
Think if you weren’t locked into some oil sands names and that camera company your outlook would be much brighter. XRT will run to $120 by the end of Q1
The US is a major Crude producer now. This is not a win with no loss scenario. Why did house prices getting cheaper not help retail sales? How about stocks getting cheaper? Hopefully you are right.
True. Oil companies lose, at least temporarily, here. But maybe the Saudis are being like Wal-Mart. Lower the prices, run the smaller competitors out of business, then hike the prices back up.
In the mean time, everybody will have extra cash to buy the goods and services of other companies because their fuel costs will be lower. And the fuel costs will plummet, for all the companies that transport their goods on ships or planes or trucks, causing an increase in their net earnings.
The biggest loser other than oil companies are the banks that chased shit debt on the “Shale Revolution”. When banks lose assets lose. Main Street is not the markets..
Banks chase all kinds of shit all the time. But the largest banks make so much money off of inside information and other kinds of predatory behavior and fraud, that the losses from the shit debt on shale will pale in comparison.
And the government is turning a blind eye towards all kinds of criminal activities committed by large banks, helping them to make big bucks by removing the impediments that would otherwise be caused by the rule of law. The big banks will do just fine, whether oil is at $100 or at $10 a barrel.
Maybe. The shit housing debt did asset damage. They get saved but not before assets die a horrible death. We have seen this movie before.
Crude back to 80-90 and this whole horseshit panic goes away. Main Street continues its death spiral and Wall Street continues to thrive like Ebola in Liberia.
The Grandmaster has spoken.
He has. But what yapping mouths on this site are being referred to? Surely just the ones in the comments..
He opened his yapping mouth again
$SWHC FTW F’me
Le fly, I have been short oil and equities for a couple weeks now, done pretty well for myself, do you think I should close them out? My biggest short position is yelp, are you in that?
Do you want Fly to throw you off the roof?
fly will you please tuck me into bed at night and read me a story?
OPEC’s oil traders have been given the green light to short the proverbial shit out of crude futures to make up for any shortfall in oil revenue, as Saudi Princes run the pumps at full tilt, flooding the market. When these same traders get the nod, they will about-face & go long crude futures in size & magically, OPEC will announce a mongo cut & crude will rise 25-40% in short order. They are gonna get their petro-dollars one way or the other.
Let’s be honest. Unless you’re wearing a Keffiyeh, you have no business trading in oil. This is a market where insider trading is completely legal and encouraged “for hedging.”… we’re the dumb money.
Totally true. Wait till the full on panic
if it comes and buy a co. you think will
survive and wait for a nice double.
@juice and @ the profit well said.
Unless your a player on both the physical and financial sides of energy, stay on the sidelines.
In 2013 the US imported 42% of its oil from Canada. 21% from OPEC.
In 2002, the numbers were just about reversed.
The house of SAUD is gunning for the Canadians. Oil below 60 is more than plenty to crush the Canadian Oil Sands over time.
I can’t tell if oil is leading equities, or vice versa at this point… or maybe they are each leading each other in a positive feedback loop.
So when will the Canadian Traders come out to defend their $60 per barrel cost to produce? This spring I’ll be selling any “Arab” uprising oil spikes. But I’d be a buyer of oil in the low 50’s as I believe the price will be defended by US and Canadian concerns.
Assume for a minute that all world markets are not rigged by the banksters……….
Parse these facts and apply a meaning to them;
* Oil is crashing. In fact nearly all commodities are crashing.
* All growth during the last decade or so, in the entire world, has been fomented by the accumulation of debt. Not an actual creation of wealth.
* We have reached the point where It is now mathematically impossible for the US, indeed many countries in the world, to “grow” their way out of debt without geometric and heinous increases in the tax burden placed upon citizens.
* Tax increases of the magnitude needed to service debt being carried by nearly all nations (with the exception of some OPEC members) will further stifle any real growth.
* Creation of meaningful jobs here in the US since the turn of the century has been nearly non existent.
* The vaunted “stimulus package” has been a complete and utter failure in terms of creating any appreciable real economic growth.
* While the market has rebounded on paper the wealth created by the same is worth nothing more than the paper it is printed on. There is very little “real” value in terms of goods and services that are of use to 80% of the worlds population.
Stick those in your pipe and smoke ’em for a while.
Santa’s going to eat your pipe and kick you into the fireplace where you belong.
With the Senate passage of the spending bill which allows bank subsidiaries w/FDIC insurance engage in swaps, does that help oil? ie through Oil Swaps?
With the supply/demand imbalance, I doubt many trading desks are going to try to play the long side of the oil trade right now. No need to try catching a falling knife when the producers are likely to increase supply in response to falling prices.
Just like that someone catches the temporary knife.
Yep. Open mouth insert foot on my part. At the moment, it looks like the bounce belongs to a dead cat. We’ll see how it plays out in the next 15 hours.