Yes - I was wrong.
But lets say they can get to 1.4 mpd (meant the 1b for a year) thats still what, half a billion?
With OPEC how long do you think the members are going to agree for production cuts to support oil when the UAE is out there selling aggressively. I think OPEC has lost pricing power.
The war ending is the big wildcard - the great orange idiot now says Labor Day.
But one more thing - demand destruction is coming when EMs start to raise rates for austerity purposes.
What if the US grows at the expense of every other country?
That's what I think Trump is doing - he will force Asia (China) and EU (already scheduled) to raise rates.
People much smarter than I in the oil markets, and you appear to be smart, have been talking about the above scenario to produce the downdraft in oil.
Finally, I posit this: isn't right now, during a ME war exactly when you would see oil above $120?
If yes, then why isn't it?
Because in the past we have at the SPR as have other countries - my point is we are in the environment for much higher oil and yet, it sticks around 95ish.
I am keeping my eye on interest rates in the EU and Asia EM. When they start going up it is going to damper any up trend in oil.
Thats my opinion and its as good as the paper it was written on.
Venezuela adds 1b per year (I think)
OPEC no longer has the pricing power now that the UAE exited - prob the first of many.
And IF the Iran war ends then that supply will come on line to the commercial markets.
I'll bet you a dollar that within a year we will see $50 oil.
And yes, I am a total Maroon.
Anyone who thinks today is a big deal has a lack of perspective.
We have had 8 straight weeks of up.
Today is a much needed pull back to reset the market for a summer run.
I hope we get another day like today on Monday.
Plus, if you have been trading the market you should have made plenty of gains so that today's down move is a small $ of giveback.
TRADES:
- SOLD $GEN calls for +24% (1day)
- SOLD $MITK calls for +10% (3day timestop)
- SOLD $PCT calls for -12%
- SOLD $MAGS calls for -71%
- BOT .ATEN260717C30 for 3.40 ($ATEN)
- BOT .F260717P17 for 1.63 ($F)
- BOT .USAR260717C32 for 4.47 ($USAR)