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.

 

[Snagglefoot]

$75.82/ barrel this morning. It’ll be in the 60’s in a week.

It’s $74.52 this morning. Not yet.

 

[Pablo]

It’s $74.52 this morning. Not yet.

Which direction are you rooting for? Hard to tell.

 

[GON]

Which direction are you rooting for? Hard to tell.

That would be a very easy question to answer.

Love all the milk and honey benefits from the neighbors to the south, but somehow view those milk and honey benefits as an entitlement, not a blessing.

 

[Snagglefoot]

Which direction are you rooting for? Hard to tell.

That’s a good question. Although I too like cheap gasoline, I see that the general population might be naive about the US oil industry’s ability to profit at low prices. Horizontal wells and multi-Fracking is very expensive. Also, you always drill the best stuff first. They are running on a treadmill with over 500 rigs drilling to essentially keep the production rate constant.

I believe oil traders are not your friend and are placing bets that oil companies will accept lower prices because they are caught between a rock and a hard place. If their production falls for any reason they will be hammered by investors. The banks also are not the oil companies friends. They will force oil companies to drill to make sure the interest payments are made.

Most importantly, Polymarket has picked up on my “ Never see $70/bbl again prediction” and there are 10 billion dollars of bets placed on it.

 

[Pablo]

Sweating BB's!

 

[Snagglefoot]

Sweating BB's!

Yep, we are getting Way too close!

 

[Snagglefoot]

That would be a very easy question to answer.

Love all the milk and honey benefits from the neighbors to the south, but somehow view those milk and honey benefits as an entitlement, not a blessing.

Just appreciate the 4 million bbls a day we send to you.

 

[GON]

Just appreciate the 4 million bbls a day we send to you.

I’ve often asked myself, who has more proven and unproven oil reserves, California or Alberta.

Maybe the CCP will direct (order) Canada to drill for oil in the Salish Sea.

 

[GON]

Just appreciate the 4 million bbls a day we send to you.

Don’t the vast majority of native born Albertans prefer to have Alberta annexed by the United States?

 

[billt460]

This is a very fragile, "peace deal". While it might work, and is holding for the moment, and is the reason for the current falling oil prices, they could easily skyrocket once again if the blasting starts. And it just might.

Ukraine is bombing the hell out of Putin's Moscow oil refineries. That could be just the excuse, (emphasis on the word "excuse"), to once again start jacking them back up.

And if all hell breaks loose on Iran again, (which it easily could), current oil prices won't mean a thing. This is like betting which dishes are going to fall out of the cabinet first during an earthquake.

 

[SC Maintenance]

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

But it was not formerly priced in.

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.

Everyone's oil reserves are very well known. Even China.

And now we are giving them the good news to expect less than $80/bbl. This does not compute.

Again, your tracking spot. 1% of oil sales drive spot price - momentum / day traders. Look at futures out 6 months. That is how most actual producers / users sell / buy - on contract.

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

Different set of problems - not globally traded commodities. I agree with you on those things but around here I would line up for a decent $12 burger and $4 loaf of bread. Clearly life is cheaper where your at.

Here is the chart for WTI that counters the fake news that the US oil industry can drill happily along for $60 oil.

Only MSM is spinning this. Everyone in the oil industry knows there isn't and wouldn't be drilling at $60. $70 maybe - on long term futures not spot.

 

[tcp71]

Don’t the vast majority of native born Albertans prefer to have Alberta annexed by the United States?

no.