The EIA report yesterday showed a massive surplus. There was ZERO reason for the face-ripping oil rally yesterday. The oil surplus isn't going to work itself off in one day, that's silly. Yesterday was a RYFO short covering rally.
Posted on 12/18/2014 10:06:12 AM PST by blam
Myles Udland
December 18, 2014
Crude oil is starting to roll over.
In late morning trade, West Texas Intermediate crude oil futures were giving up earlier gains and were down more than 1% on the day. WTI futures were down near $56 a barrel on Thursday, after briefly touching $59 a barrel earlier.
On Wednesday, crude oil had a wild ride, spiking ahead of the Federal Reserve's announcement before giving up those gains.
(snip)
(Excerpt) Read more at businessinsider.com ...
Have they reached “peak oil” ? :)
The EIA report yesterday showed a massive surplus. There was ZERO reason for the face-ripping oil rally yesterday. The oil surplus isn't going to work itself off in one day, that's silly. Yesterday was a RYFO short covering rally.
With between 750 billon and 800 billion in cash reserves the Saudis could weather the shortage for 5 years. Somebody will break and whack them before that happens.
Neat graph though, thanks.
This kind of stuff tends to happen when you have an over reaction to the over reaction to yesterday.
As I guessed yesterday—and I freely admit that it was a guess—oil experienced a dead cat bounce.
This whole decline in oil prices was, IMHO, orchestrated by the Saudis and big oil companies to put marginal US oil producers out of business. Once they’ve succeeded, oil prices will climb back to $100/bbl and gas to 3.50+/gallon. This ploy is hardly new in commerce and geopolitics.
In the mid-80s, as part of his successful effort to end the Cold War, Reagan (with Bob Casey) persuaded the Saudis to turn on the spigots. They did, and the Soviet Union folded like a cheap suit.
How did the Saudi’s do that by producing less oil than last year?
And most of the increases in US oil production have come from smaller independents, rather than larger “big oil” companies.
It might make for an compelling conspiracy intro, it doesn’t follow what has actually happened.
Also the Global demand for oil isn’t climbing as fast as the US and Canada have been adding to the supply.
That is an interesting chart. Thanks for posting.
Go American oil producers.
Thanks for the data.
However, I’m glad to be on this side of the curve.
Amen, brother.
“I see it as a good thing that they cannot effectively control the cartel and manipulate the price.”
It appears that the Saudis may have declared an economic war against Russia and its ally, Iran.
Many of the current Saudis went to the London School of Economics, and they learned how to play hard ball.
This will get very interesting in the next few months.
I like the header before the comment section at the source for that graphic:
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
“Ernest O. Thompson (1892-1966), head of the TRC from 1932 to 1965, took charge of the agency and indeed the oil industry by appealing to an ideal of Texas’ role in the global oil order—the civil religion of Texas oil. He cajoled, harangued, and browbeat recalcitrant producers into compliance with the TRC’s prorationing orders. The New Deal allowed the TRC to set national oil policy.[9] As late as the 1950s the TRC controlled over 40% of United States crude production and approximately half of estimated national proved reserves. It served as a model in the creation of OPEC.[10] Gordon M. Griffin, chief engineer of the TRC during World War II, developed the formula for prorationing to keep production flowing for the military.”
Thanks for the data. It was apparent that the late 1950’s and throughout the 1960’s our oil industry leaders got in bed with the Opecker Princes, declared that we were running out of oil in America and allowed the Opeckers to control our economy.
What is interesting now, is how the newer USA oil company leaders have turned this around to our advantage.
Well, reading it isn’t the same as living it, eh? Have a great Christmas, FRiend.
“Considering the price is now below $60, this graph is something else.
This is economic war, which is always a prelude to military war. It was ever thus.”
Right on, I started posting that graph before the recent big dips in oil price. Suddenly a lot of Freepers and non Freepers who visit this site are realizing that we have declared Economic war on Russia, the Opeckers and Venezuela.
One of the first casualties may be the serial killers in charge of Cuba. They are not getting money from Mother Russia and Venezuela, and that is why they are trying to Con Comrade Obozo into bailing them out.
Merry Christmas FRiend.
It was just easier and cheaper to let “them” do it. Or so they thought.
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