horrible oil fundamentals seems to be influencing price
Long time readers know that it's easier to predict the fundamentals than it is to predict when the fundamentals will matter. Just look how long it took "the market" to realize that the airline industry was becoming an oligopoly. Similarly, we've known for quite some time that the artificial (financialized) price of oil is encouraging too much supply and too little demand. As US production soars almost weekly, and Western oil demand falls to 1980s levels, the market seems to FINALLY be understanding the situation. Will this trend continue? Everyone who has tried to predict ANYTHING about future oil prices in the past decade has been wrong. Including me, Still, anyone who ignores the obvious fundamentals here will eventually regret that decision.
My best estimate for the supply/demand balance point is Brent $108 ± $7.50, that is $100.50 to $115.50. Oil prices are still within that range. Just wish oil stock prices would follow crude down. I want to be "all in" oil stocks by the time Riyadh hits 105 F daily highs.
I have gone out on a limb and predicted Bakken will peak this year. People I respect forecast 2015. Any speculation about the psychological impact when (not if) this happens ?
We've seen this happen occasionally: LCC will trade down a little on days when it's profitability has obviously materially increased. Welcome to Wall Street's strange world of asset classes and programmed trading. That said, the single easiest way to make money on Wall Street is to take advantage of the absurd. Anyone selling LCC today is a fool.
I read an article awhile ago that said that money is coming out of the OTC, non-transparent commodity swap dark markets and moving to the futures market. For one, transparency rules are being imposed (lights are turning on) and they claimed the cost to do futures will be more economical going forward than the former OTC dark markets now with the transparency rules ... and many firms are shutting down instead of having to comply. I would like to see a more detail report to determine if profits will be harder to come by with the transparency rules, or if the costs of the transparency rules is making the futures market more economical.
Position limits were denied by the courts in the swap markets a number of months ago ... they'll probably end up being Impose, but nevertheless, position limits exist in the futures market.