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Thread: OIL..

  1. #71

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    Mind The Inflection Points: Unemployment Claims Up 17% In Texas And 69% In North Dakota

    http://davidstockmanscontracorner.co...d+Day+Thursday

    The oil price collapse may be analogous to the housing bubble peak in 2006.

    The impact of the oil price collapse started to show up in state claims data in the November-January period. While most states show the level of initial claims well below the levels of a year ago, in the oil producing states of Texas, North Dakota, and Louisiana, claims have been above year ago levels since the turn of the year. North Dakota and Louisiana claims first increased above the year ago level in November. Texas reversed in late January. In the most current state data, for the April 11 week, claims in these states were well above year ago levels. Texas was up 17% (vs. 14% in the previous week), Louisiana +24% (vs. +9%), and North Dakota +69% (vs. +87%). Another oil producing state, Oklahoma, was up by 26.8% (vs. +30%).

    With its huge and widely diversified economy, Texas could be the harbinger of things to come for the entire nation as the ripple effects of the oil collapse and the disappearance of those $85,000 per year jobs spread through the US economy.
    What's the Frequency, Kenneth?

    432Hz

  2. #72

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    Quote Originally Posted by WhatsUpDoc1958 View Post
    Peak Production? Touché! But I feel a title for a future thread coming on!!!

    OK. So I misappropriated the term "Peak gold" and "Peak silver" production merely for purposes of hyping a thread...

    I admit it.

    In my peak gold and peak silver threads, I simply meant that there was decline in the commodity production cycle due to years of low prices causing miners to not invest in exploration and discovery and to invest less in the opening of new mines. I would presume the same should hold for oil later this year.

    Whether gold production will increase or not in future years is a function of both the price of gold (a higher price can drive more investment in exploration and discovery) and declining ore grades (it's getting tougher to find good gold deposits). Same for silver. Same for oil.

    So I am using "peak production" in the sense that we may never pass this way again, but it is only a possibility, not a certainty.

    More certainly, commodity cycles have their peaks and valleys, and I believe this commodity cycle has "peaked" in terms of gold and silver production. Oil has not peaked yet, as far as I can tell, but I believe the peak is coming within the next year...
    But there is a difference between voluntary production declines due to reduced profitability, and production declines based on limited in-ground resources. This can be applied to any commodity.

    In this case... gold and oil are comparable. When gold was $1900/ounce and mining companies had access to higher grade ore, they could produce gold and make a huge profit. But when gold drops to 1200/ounce and the high grade ore becomes limited... the profitability drops, maybe even to the point where the mine needs to shut down because it can't be profitable. That doesn't mean that the mines have exhausted their gold reserves... it just means that it is not profitable to extract those reserves at the current price.

    The same holds true for oil. When oil was $100+/barrel... the US had no problem extracting oil for a profit. But at $50+/barrel... many oil producers cannot make a profit and shut down operations. But the oil reserves are still there... waiting for a higher price to make it profitable to extract once again.

    I guess my long winded point is... Peak production is married to price more than it is to reserves.

    .

  3. #73

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    Quote Originally Posted by Atlas Shrugged View Post
    I am going to short oil....soon.
    Hi Atlas,

    There will be a correction at some point for this current price action

    On the daily chart...

    http://stockcharts.com/h-sc/ui?s=%24WTIC

    But WTI is showing many technical indicators of an uptrend

    Since Mid MARCH

    1) Higher highs and higher lows
    2) 50DMA now pointing upwards
    3) 50DMA breached to the upside (and retested and resumed upwards trajectory)
    4) MCAD producing higher highs and higher lows since DEC (and MCAD still wide open)
    5) RSI producing higher highs and high lows since DEC (RSI still not in overbought teritory)
    6) 'W' bottom formation
    7) Downtrend line broken to the upside

    Many possibilities, but one is that it could run to the 200DMA and then get rejected. if this happens, 200DMA would be a nice 'low risk' entry point for a short (with proper stops of course IMHO. And I would still expect corrections on the way to 200DMA). I may even put on a hedge at 200DMA with inverse ETF if this plays out.

    Guessing if this happens the price and 200DMA would converge at about $67

    Time will tell. But that's the way I see it for now... (WTI and Brent both headed for 200DMA where they will likely get rejected at 1st attempt to breach)

    And as mentioned, I am not playing the RAW commodity b/c I think the BIG OIL companies have much more of the price action, geo-political, supply-demand, etc baked into their prices (and they pay me dividends whilst I wait and suffer through the draw downs)


    IceAged
    Last edited by IceAged; 04-23-2015 at 08:04 PM.
    Disclaimer: DYODD (Do your own due diligence). Any information in these posts are my own personal opinions and not investment advice

    ------------------------------------------------------------------------------

    There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT! - "K"

  4. #74

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    I will let you know when I do

  5. #75

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    And the 'bear' scenario

    ABC correction from 100ish -> 45ish -> 67ish - > sub 45

    Price ran from 100 to 45 with no corrections on the way down (a correction was/is due to the upside)

    But still bullish

    On the weekly chart

    http://stockcharts.com/c-sc/sc?s=%24...=1429836438214

    1) MACD buy signal at 48ish in mid FEB
    2) MACD wide open to the upside
    3) RSI coming out of oversold
    4) Nothing but white candles since early march
    5) Downtrend line broken to the upside
    6) Price stretched extremely far from 50 and 200 WMA
    7) And price and 50WMA looking to converge at same $67 price target
    8) Classic 'w' bottoming pattern

    If this does get to 67, I will need to do alot of thinking about hedging, tightening stops, lightening positions, etc

    Would really like to hear others thoughts on price action along the way.

    Good luck to all.

    IceAged
    Last edited by IceAged; 04-23-2015 at 08:05 PM.
    Disclaimer: DYODD (Do your own due diligence). Any information in these posts are my own personal opinions and not investment advice

    ------------------------------------------------------------------------------

    There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT! - "K"

  6. #76

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    It will not get to 67. WTI that is...too many specs are expecting a v bottom. I may short tomorrow.

  7. #77

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    Quote Originally Posted by Atlas Shrugged View Post
    It will not get to 67. WTI that is...too many specs are expecting a v bottom. I may short tomorrow.
    You're gonna' go short oil that you don't have?
    I thought you didn't believe in playing paper games?

  8. #78

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    Quote Originally Posted by insidedealer View Post
    You're gonna' go short oil that you don't have?
    I thought you didn't believe in playing paper games?
    Good point. I'll notionally go short today.

  9. #79

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    So here are a few tidbits

    1) There is a glut. That is undeniable
    2) Saudi is the cause of the glut (all other OPEC nations not happy). That is undeniable
    3) Suadi has the world largest producing oilfeild (Ghawar) - Accounts for about 5 of the 10 billion barrels being pumped out of Saudi. That is undeniable
    4) Ghawar started pumping water into this field in 2009 to get the head pressure needed (prior to 2009 it was producing w/o encouragement)
    5) Reports are anywhere between %25-%40 of the oil coming out of Ghawar is now water



    IceAged
    Last edited by IceAged; 04-24-2015 at 08:33 AM.
    Disclaimer: DYODD (Do your own due diligence). Any information in these posts are my own personal opinions and not investment advice

    ------------------------------------------------------------------------------

    There's always an Arquillian Battle Cruiser, or a Corillian Death Ray, or an intergalactic plague that is about to wipe out all life on this miserable little planet, and the only way these people can get on with their happy lives is that they DO NOT KNOW ABOUT IT! - "K"

  10. #80

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    2) No, US shale oil caused the glut. Saudi just want to get back to their old market share back.
    5) Not a danger point to have 25-40% watercut for an oil pool under waterflood. Any oilman would love to have such 'low' water production when water been pumped into an oil pool

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