Official (Alberta) Oil Discussion Thread

[Locke]

Have you seen the size of that document??

[polak]

Originally Posted by Dan02

When the full change over occurs is hard to say, I think it will be sooner then you obviously, but it is a inevitability. When it does happen it'll be the professional drivers who go first with the personal vehicles being the lingering ones on the road.

Say you're a cab company or a long haul trucking company, one of your biggest expenses(salary), your biggest risk(accidents/maintenance) and biggest limitation(shift lengths) can all be eliminated by removing the driver, you're going to be one of the first people to get in line.

Yes but there is no way you remove the drive until autonomous cars have a 100% safety rate without incident for who knows how long. You might never get rid of them to be honest. Look at train engineers or pilots.

[SebC]

Originally Posted by Locke

Have you seen the size of that document??

It's not the size of the doc that matters, it's how you use it.

[Tiger]

Originally Posted by Locke

Have you seen the size of that document??

I did... only got part way before I just read the conclusions

[jayswin]

Originally Posted by calumniate

Says the guy that stated 'we've accomplished pretty much everything when it comes to science.' This is hilarious!

I could have swore that was Sliver.

[Flash Walken]

Originally Posted by jayswin

I could have swore that was Sliver.

it was definitely peter.

[GGG]

Oil up for no reason today. After the Russia/Saudi talks fall apart its going to crash back down. But if Russia/Saudi can keep juicing the prices with fake optimism its good for us.

But we're almost in double meat territory.

[heep223]

Originally Posted by GGG

Oil up for no reason today. After the Russia/Saudi talks fall apart its going to crash back down. But if Russia/Saudi can keep juicing the prices with fake optimism its good for us.

But we're almost in double meat territory.

This is pretty funny logic. Oil going up is bearish? Oil going up "for no reason" is very bullish. Even more bullish is when oil shrugs off large inventory builds to keep going up. It's a sign the market is looking past the supply glut and realizing that we could be in an under-supplied market as soon as this year. Obviously it could come back down and/or bounce around the mid-30s all year. But WTI rallying back above $37 is undoubtedly a good sign, even if it doesn't fit your personal narrative that the recent highs are based on "fake" optimism out of OPEC.

Things are looking a lot more constructive in terms of balancing the market. US production is down for the 4th consecutive week, first time since the shale boom. Watch production fall off significantly as non-OPEC activity is at levels we haven't seen since the early 1980s. Price is recognizing this and I wouldn't be surprised in the slightest if we ended 2016 in the 50s on WTI.

[IliketoPuck]

Originally Posted by heep223

This is pretty funny logic. Oil going up is bearish? Oil going up "for no reason" is very bullish. Even more bullish is when oil shrugs off large inventory builds to keep going up. It's a sign the market is looking past the supply glut and realizing that we could be in an under-supplied market as soon as this year. Obviously it could come back down and/or bounce around the mid-30s all year. But WTI rallying back above $37 is undoubtedly a good sign, even if it doesn't fit your personal narrative that the recent highs are based on "fake" optimism out of OPEC.

Things are looking a lot more constructive in terms of balancing the market. US production is down for the 4th consecutive week, first time since the shale boom. Watch production fall off significantly as non-OPEC activity is at levels we haven't seen since the early 1980s. Price is recognizing this and I wouldn't be surprised in the slightest if we ended 2016 in the 50s on WTI.

Further to your point, I read in an article last week that the rig count in the U.S. is at its lowest point in recorded history. Some speculate that it may be at its lowest point since the Pennsylvania oil boom of the late 1800's.

Pretty stunning when you actually sit back and think about the implications.

The Permian basin has also rolled over; rig counts under 200 in the area, last major U.S. basin not to be in a declining profile....things are setting up for a period of material out performance in the future.

If all you do is read the Bloomberg, BNN, CNN, etc. etc. headlines, you are missing what the numbers are pointing to.

[Fuzz]

other rig charts here:
http://www.wtrg.com/rotaryrigs.html

[GGG]

Originally Posted by heep223

This is pretty funny logic. Oil going up is bearish? Oil going up "for no reason" is very bullish. Even more bullish is when oil shrugs off large inventory builds to keep going up. It's a sign the market is looking past the supply glut and realizing that we could be in an under-supplied market as soon as this year. Obviously it could come back down and/or bounce around the mid-30s all year. But WTI rallying back above $37 is undoubtedly a good sign, even if it doesn't fit your personal narrative that the recent highs are based on "fake" optimism out of OPEC.

Things are looking a lot more constructive in terms of balancing the market. US production is down for the 4th consecutive week, first time since the shale boom. Watch production fall off significantly as non-OPEC activity is at levels we haven't seen since the early 1980s. Price is recognizing this and I wouldn't be surprised in the slightest if we ended 2016 in the 50s on WTI.

It depends on your belief if Iran can soak up all the US supply reduction and if you see shale supply coming back at 40ish short term on uncompleted wells. I would understand long term futures being quite high creating contango to eat up current supplies. But for April delivery when US storage is 88% full and still producing at 500k per day extra supply shouldn't be going anywhere.

[Izzle]

WTI close to $40. Should I spend money on a double meat?

[Simon96Taco]

Originally Posted by Izzle

WTI close to $40. Should I spend money on a double meat?

Yes, AND extra cheese.

[BrownDrake]

Short covering that's all. Fundamentals still suck. Will revisit mid twenties sometime in the near term.

[burn_this_city]

Why would someone cover if they believed it would go back to the bottom again?

[BrownDrake]

Originally Posted by burn_this_city

Why would someone cover if they believed it would go back to the bottom again?

Because those people covering see less downside than short term upside and they are locking in gains. We are probably in a bottoming process. This is not 2008/9 where you will see a V shaped oil recovery, this is a fundamental supply/demand imbalance oil price collapse. Before the all clear is sounded you will likely see a re-test of the lows or a higher low in the low 30's or high 20's. We probably eventually see oil recover to the mid forties by year end if US and other Non-OPEC production shows significant declines.

OPEC has not gone through this pain and the burning their cash reserves to see world rig counts recover - they are attempting to stabilize the price not make it go higher to save these producers.

[IliketoPuck]

Margin calls can be painful for shorts. Even if the long term thesis is believed in, the ability to see the trade through can be limited by available liquidity.

[heep223]

Originally Posted by BrownDrake

Because those people covering see less downside than short term upside and they are locking in gains. We are probably in a bottoming process. This is not 2008/9 where you will see a V shaped oil recovery, this is a fundamental supply/demand imbalance oil price collapse. Before the all clear is sounded you will likely see a re-test of the lows or a higher low in the low 30's or high 20's. We probably eventually see oil recover to the mid forties by year end if US and other Non-OPEC production shows significant declines.

OPEC has not gone through this pain and the burning their cash reserves to see world rig counts recover - they are attempting to stabilize the price not make it go higher to save these producers.

I don't really disagree with anything you said here, though I would think most long term shorts have already locked in gains and if your thesis of a short squeeze is correct, it's because they're getting margin called after getting their faces ripped off in the last 2 weeks like ^ just posted. Not because they're locking in gains.

I'd also mention that we have already re-tested the mid-20s lows and bounced hard from there to form a pretty textbook "W" double bottom. Previously every re-test of the lows failed so there is a real distinct change in behaviour here. But you're right we could test mid 20s again to form a triple bottom, I personally think that's pretty unlikely and the lows are in.

[BrownDrake]

Originally Posted by heep223

I don't really disagree with anything you said here, though I would think most long term shorts have already locked in gains and if your thesis of a short squeeze is correct, it's because they're getting margin called after getting their faces ripped off in the last 2 weeks like ^ just posted. Not because they're locking in gains.

I'd also mention that we have already re-tested the mid-20s lows and bounced hard from there to form a pretty textbook "W" double bottom. Previously every re-test of the lows failed so there is a real distinct change in behaviour here. But you're right we could test mid 20s again to form a triple bottom, I personally think that's pretty unlikely and the lows are in.

My comment was oversimplified for sure. Probably the majority of short covering or margin calls occurred from $29 to $32. Some of those same traders could be long right now in addition to others. Most of these contracts aren't held in either direction for very long. Oil is probably range bound $30 to $40 until fundamentals suggest a break out in either direction, ie. big draws on inventory or production declines or conversely a weakening of demand or slowing global economies. Very big resistance to overtake at $40 range, if it can break $40 its probably going to $45 in hurry. Problem longs have in the near term is there is no change in fundamentals, just less pessimism and the trade probably got too crowded.

[heep223]

Originally Posted by BrownDrake

My comment was oversimplified for sure. Probably the majority of short covering or margin calls occurred from $29 to $32. Some of those same traders could be long right now in addition to others. Most of these contracts aren't held in either direction for very long. Oil is probably range bound $30 to $40 until fundamentals suggest a break out in either direction, ie. big draws on inventory or production declines or conversely a weakening of demand or slowing global economies. Very big resistance to overtake at $40 range, if it can break $40 its probably going to $45 in hurry. Problem longs have in the near term is there is no change in fundamentals, just less pessimism and the trade probably got too crowded.

There most certainly is a change in fundamentals. Non-OPEC production isn't just slowing - it's now showing a persistent declining trend and it's just the beginning. You now have major U.S. producers forecasting double digit production declines for the year 2016.