The earning releases of the US shale oil firms have been published in May 2016, whilst the oil price is rebounding from its bottom. The following is the chart of the WTI crude oil futures:
Then, how are the financial situations of the US shale oil industry? Would the financial results justify the recent rebound?
Continue reading The break-even point of the US shale oil industry and its production decline
The crude oil price is surging even after the disagreement in the oil producers’ meeting in Doha, but it will try its bottom again soon. The only thing that has changed in the oil market is the price, and the long-term oversupply of oils would not change as nobody is willing to cut their production.
In the long-term chart, the oil price seems just trying to recover after a radical fall. Is this so-called a dead-cat bounce? We presume so and will explain the reasons.
Continue reading The oil prices rebound will not last: US shale industry still far from bankruptcy
The oil price is surging as investors expect the oil producers’ meeting in Doha on 17th of April could stop the oversupply of oils, and so the WTI crude oil price is now trading in $40s. This could provide a very good opportunity for investors to short sell.
As we have been analyzing the crude oil market from several aspects, we would like to summarize our predictions in this article.
The oil price has been tumbling since 2014 due to the oversupply by the US shale oil industry. The following is the chart of WTI crude oil futures:
The shale industry has made it possible to extract oils that could not be extracted in a conventional way, and consequently the supply of oils immensely increased. Now even oil tankers are used as storage.
After the radical crash in 2015, the WTI crude oil price has been trading around $30s, and many try to forecast how long it will remain low.
The prospect of the crude oil price depends on the two factors: the OPEC and the US shale oil industry. Whilst the OPEC now tries to cooperate to freeze production, Saudi Arabia is still unwilling to cut its output.
Then what about the US shale industry, which Saudi Arabia tries very hard to kill? They surely have larger costs for production, and then it would be them that would die out if low oil prices continue.
The shale oil companies published their earnings releases in February, and this article is examining the results. Are they cutting production? Are they close to bankruptcy? These factors will be necessary to know in order to foresee the future of oil prices.
Continue reading Shale oil companies’ earnings releases predict the crude oil price in 2016
The US stock market still remains at around the all-time high after the Fed started raising rates, and that is because investors believe, rationally or not, that the strong US economy will keep equity appreciated even without the support of the Fed. However, the US economy will slowdown, and then the stock market will lose its last resort.
The crude oil price has fallen radically and is finding a comfortable level to be. Is it going down further? We presume it has to be, though we also suppose it will rebound eventually.
Then, how much further is it going down? When is it going to rebound? We provide answers to these questions in this article. The following is the long-term chart of the WTI crude oil futures:
The easy market for investors supported by the Fed’s quantitative easing is already over, and now the question is merely when, not if, the asset bubble bursts in several markets. The assets in a bubble are stocks, bonds and the dollar.
The Fed has ended its QE programme and is now in a process of raising interest rates. Will the US stock market be okay? It can never be okay as the central bank has injected trillions of money and is now going to retrieve it, but the market is manifesting groundless optimism.
The greatest premise investors believe in is the strong US economy and thus the strong dollar. However, the time is near for the uptrend of the dollar to be fading out. Why, how, and when? We will explain it in this article.
On 14 Jul, the West and Iran agreed to freeze Iran’s nuclear programme and, in exchange, gradually relieve the sanctions on the Iranian economy.
This agreement allows Iran to export oils and natural gas to the western countries to increase the oil supply of the world, which has already been greater than the demands. Iran has the 4th greatest oil reserves and the 2nd greatest natural gas reserves in the world.
The oil prices have already been declining due to the US shale oil and Saudi Arabia refusing to decrease its production, but the markets haven’t fully reflected the benefit that oil tankers would get from the increasing oil supply.
Continue reading Iran nuclear deal and sanctions relief could boost oil tanker stocks
