It is kind of amazing at how much tunnel vision oil traders have. Canada’s output has dropped by about a million barrels per day since the fire and Nigeria has had huge disruptions as well. So oil has been creeping up for the past few weeks. But traders are all panicking that the oil inventory in Cushing increased last week. It's like, calm down people. Oil doesn’t move around at the speed of light. A good quantity of it is still transported by tanker. There is a lag in shortages affecting stockpiles. Its why oil was at $120 per barrel despite the there being a global over supply. No one who traded in it could take a step back and see the big picture. Then once the glut became known, everyone panicked and the price crashed as hard as it did. It seems to be in a weird point where the price is being pulled in two directions. The speculators who know the price is due to surge due to upcoming shorages, and the day to day traders who only care about inventory data, and threats from the Sauds to flood the market.
The Saudi plan to bankrupt the US frackers is coming to a head. A lot of them were only staying afloat because of futures contracts, where they agreed to sell on a negotiated price from a year or two ago. Those were at significantly higher than this market value. Those have run out, and now these companies cant afford to operate. More and more companies keep filing for bankruptcy. I was reading that something like $50 billion dollars worth of bankruptcy protection has been filed for so far. And more join the list every week.
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