Posted on 08/23/2016 9:27:28 AM PDT by bananaman22
Oil prices have surged more than 20 percent in the last two weeks but there is quite a bit of disagreement over whether or not the rally can continue.
The spark that created the bull market was the decision from OPEC to hold an unscheduled meeting in Algiers in September to discuss a production freeze. On the one hand, it would seem odd that OPEC members would once again go through all the motions and trouble of holding another meeting without a high degree of confidence that this time will be different. On the other hand, it has been years since OPEC was last able to agree to some coordinated action. One would think that oil traders would not be so gullible, but every utterance from Riyadh moves oil prices. Even if OPEC has little intention of agreeing to something substantive in Algiers, the decision to meet was enough to end the bear market and bring back the bulls. Maybe that was part of the plan.
The most that OPEC might agree to will be a production freeze, which as has repeatedly been noted by oil analysts, would have little effect on oil market fundamentals because most OPEC members and Russia are near their production limits anyway.
So the big question is what happens to oil prices after Algiers - and you will hear a different answer depending on who you ask.
(Excerpt) Read more at oilprice.com ...
with the way the money supply has exploded over the last 15 years i wouldn’t try to predict anything its kinda like letting go of an untied balloon now
I would tend to discount the meeting’s announcements a little...there’s just too large of an incentive to cheat in oligopolistic markets.
Oil looks like it will stay in a 40-ish to 50-ish trading range for some time. Nat Gas similar at its level. That’s goldilocks territory. Affordable prices for consumers, enough to support decent American production and dividends, and still hurts the Saudis big time.
The Saudis have low productions costs, but they need prices just over $100 to pay out all the goodies that keep the Royal Families heads on their shoulders.
On another happy note, I got the cash part of the Chesapeake class action suit payment yesterday. Best one I’ve ever received. Don’t know if I’ll ever see the remainder (about 30% more) as CHK was allowed to finance that as a 3 year note, but this was a nice “windfall profit”.
You can’t cheat when you are at full production.
You can only continue or cut.
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