You’ll never see $70 oil again.

[SC Maintenance]

The July 1st contract traded last at $77.54. That contract will stop trading 3 business days before July 1st, the settlement date. All contracts settle first of the month.

So given that, I don't expect spot to drop much from here given the July 1st implied price. Spot and July 1 should get pretty close - one going up the other down or whatever.

If were going to breach $70 soon I would guess its going to be towards the end of July for technical reasons. That all assumes the peace holds. I actually don't expect it. We will see $70 at some point, just not so sure how soon.

 

[burbguy82]

The cure for high prices is high prices.

Oil goes to $100. Everyone drills with abandon. World goes into recession. We’re awash in oil and it goes to $30.

Rinse repeat. Always same. Forever is a long time.

Agreed.

The following statement will be controversial, but IMO, big oil might be one of the most non greedy industries out there. Oil companies, and more importantly, the support companies who actually do the work, love stability. Love it. Market swings are no good for anyone.

Sure, any business wants to charge the maximum money for the minimum amount of product, that is not what I am saying.

 

[Patman]

Now that the Iranians have control of the strait they will hold the world economy hostage whenever they feel like it. We are in for a lot more instability going forward now

 

[Pablo]

Now that the Iranians have control of the strait they will hold the world economy hostage whenever they feel like it. We are in for a lot more instability going forward now

They have/haven't had control/no control for a long time. This isn't a new thing.

 

[JavierH19]

Now that the Iranians have control of the strait they will hold the world economy hostage whenever they feel like it. We are in for a lot more instability going forward now

I have no idea why the US stated on live TV at the G7 we'd've run out of oil reserves in 4 weeks. Now Iran will renege and leverage with that. A certain country likes to attack neighbors over there so they will take that as the nearest excuse to abandon the deal.

 

[Snagglefoot]

The US oil industry barely increased their drilling during this last session of high prices and they have very little inclination to drill for $70 oil. They are still drilling to replace production due to the horrible decline rates with tight oil. Over 500 rigs drilling in the USA and production is basically flat at around 13.7 million bbls/day. They peaked last August at 13.8 million bbs/day and production has actually been falling since. And now we are giving them the good news to expect less than $80/bbl. This does not compute.

 

[gman2304]

Eventually the geopolitical risks are solved and we’re back to cheap oil. Next week or next year - hard to say, but will happen.

I’d bet the $12 burger and $4 loaf of bread is here to stay, no matter what happens…

 

[Snagglefoot]

Here is the chart for WTI that counters the fake news that the US oil industry can drill happily along for $60 oil. The traders have been testing the industry for a while. Mods, I did a screen shot to show the 10 year price of oil. Meanwhile most of the oil companies in North Dakota went bankrupt and Texas will be next if the price does not improve.