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Let's not forget the other factors:
- The national reserves are set to stop being distributed by the end of October, which will lower supply by 1m barrels per day
- OPEC have said categorically they do not have extra spare capacity
- Increases in gas prices, to which the EU is royally doomed without Russian gas, will also increase the demand for oil energy use, and hence the price will also increase
- Xi Jingping is expected to announce the end of the zero covid policy after the Chinese vote in November, increasing demand
- It will take many years to build out the infrastructure for alternative energy sources and new gas pipelines, meaning these inefficiencies will be present for many years
Goldman Sachs have reaffirmed an expected EoY price of $130 per barrel: https://oilprice.com/Latest-Energy-News/World-News/Goldman-Sees-5-Gasoline-130-Brent-By-Year-End.html
I expect it's really just a waiting game, we've been seeing these $20 price crashes on and off for the last few months now as the market freaks out about a recession which will likely be quite modest in nature and indeed has not happened yet.
Lastly, with regards to the recession let's remember the chief reasons it is going to happen:
- Lots of government spending during covid lockdowns
- Inefficiencies in the energy and food markets
I expect the former will be solved by interest rate rises, but not so the latter. The latter is from a supply shock rather than a money increase, and I don't believe raising interest rates will necessarily fix that problem in a productive way.
“ all they’re doing is selling cheaper oil to India and China it’s still not stopping the demand for oil… ”
I rest my case.
Your last post is yesterday’s news, - suitable for wrapping fish today, or covering up windows to block out the sun during the heatwave - ie: probably already in the price.
“ and I very much doubt America would choose to sleep with the enemy…”
Haha, funny.
You can also relate the Iranian situation to Russia yes Europe is banning oil by the end of the year but all they’re doing is selling cheaper oil to India and China it’s still not stopping the demand for oil… it’s about capacity and the lack of investment for the last six or seven years… this massive drop in CapX is now causing the problem amongst geopolitical situation… The oil market has to be constantly looking for new oil each year to keep the game going that has been cut back by 40% each year since 2014 you are now starting to see the consequences of those things…
We will see. As you know Maris is informed by these chaps for forward guidance:
https://www.erce.energy/graph/global-oil-demand-and-supply/
https://www.erce.energy/graph/brent-futures-curve/
The US still imports half its oil mostly from Saudi Arabia… even if there was any truth in the Iran situation to bring those barrels on line it would take time and independent investment… and I very much doubt America would choose to sleep with the enemy…
Far more inclined to try and persuade OPEC to pump more but why should they they’re quite happy with the price of oil and it works for them and there isn’t much capacity left from them anyway..
Dickbat, Of course there will be a continued demand for oil. It’s a headache for all right-minded folks. But it is current US policy to try and subdue the price. To that end, there are quantities of oil available to the world that go unmentioned. Iran for example - instances described in the book ‘The World for Sale” (mentioned through Schemiel’s Twitter link yesterday 11.25) since you mention reading, show how American sanctions can be circumnavigated by commodity traders, and States, bringing cheaper oil to market.
As for other investments (I could mention but would have to charge you, lol) I think it is discourteous to discuss other tickers on this board as I would rightly be criticised for ramping.
But I hope and trust that you also have a balanced folio.