Crude Oil and oil markets

Was asking about both Oil and Equities!!! LOL!!!

And it appears as though I’m going to be sent a veritable thesis on the topic!!! LOL!!!

Was basically echoing his sentiment.

1 Like

Very good that.

Oil is a VERY interesting asset to trade. You get major moves at least once a week because of API and EIA reports. And then you have IEA and OPEC reports, as well as OPEC meetings as well. And other stuff. Requires very little margin too. Oh and rig counts every week as well. Plus Middle East geopolitical events. 100-300 pip moves frequently.

1 Like

You know I’m a practical person i.e. need things explained in nuts and bolts.

Scenario:

Some Iranian militant drops his firearm and by accident it happens to wound an American soldier or visa versa. Next thing there’s a salvo of goodness knows what. What will happen to the price of Oil!!! LOL!!! Could happen you know.

Well this one is an easy one to answer for a change - I’ve no idea!!! :smiley:

In itself, 1500 is not a huge number and its purpose is apparently to protect US interests in the area. However, if there really is a serious threat in the region then one hotspot is the Hormuz Straits through which much of the Middle East oil flows. Given the recent attacks on 4 ships in that area, this could well be a reality… In which case it would be a viable option to boost defensive measures and addition deterrents in that area.

But, in the same manner as the WMDs in Iraq, it is never clear whether these kinds of threats are real or just fabricated to justify military actions. And that may well be the case here. In which case the question is what is the real motive behind this move:

On one hand, If the threats against the US are genuine then I could imagine that these boostings of military presence in the area will be taken seriously because there are serious hawks in the US Administration and the memories of the MOAB in Afghanistan back in, was it 2017, will have dismissed any doubts about the US resolve to “deal with” any actions against US interests in the region.

On another hand, as you mentioned previously, Mr Trump is famed more as a businessman and his negotiating tactics seem to follow a common pattern - grab the opponent by what hurts the most and then offer to release his grip if they agree to the deal. This military buildup may just be to underline and preserve the effectiveness of the current sanctions grip on the Iran’s sensitive parts!

On yet another hand, Mr Trump is a clever guy and already has his eye on the next election. In this respect, he wants to maintain a strong stock market and low oil prices. It is maybe worth remembering that there is an important OPEC+ meeting on June 25/26 at which they will be considering whether to continue their current production cuts or allow an increase in production amongst its members. Is it then sheer coincidence that this buildup in talk of Iran risks is linked to that meeting? One could imagine a scenario where if the Iranian threat is considered to be real then it would result in a fear of disruptive outages in the region and an upward surge in oil prices - this would encourage OPEC to agree increased production from its members - which, if the threats are actually fabricated would end up boosting oil surplus and pushing prices down significantly - as desired and maybe even planned!

Personally, I think this is all just about keeping the current Iranian regime up against the wall via economic collapse and driving the population to rebel and resulting in a change of regime to better suit the US. The military build up is to ensure that Iran, in its frustration, does not consider doing anything that they might regret!!!

So, at long last, concerning the impact on oil prices! :slight_smile: I don’t anticipate a real war in the region. I don’t believe Mr Trump wants that at this time. There may be terrorist attacks but those are limited in impact. OPEC has its own ears to the ground and has also already declared their intention to do everything in their power to maintain a stable balance in oil supplies and prices.

Equities, on yet another hand, are another beast altogether and I readily admit that I have little feel for them. As you know, I already fail to understand why they remain so positive in the US in the light of the trade wars and their impact on companies everywhere.

All in all, I doubt anything catastrophic is going to happen and nothing major in prices of oil or equities…unless, of course, Iran really does do something “regrettable”!

Well, I don’t know if anyone read this far, but if so, then sorry about the novel! Just thinking out loud again! :slight_smile:

Thank you.

And I have read it twice already.

You’re in the wrong job unless you’re an Economist!!! LOL!!! “On the one hand this could happen… BUT on the other hand this could happen…”!!! LOL!!! Only joking.

On a serious note: nice insights.

1 Like

Good read. Agree with most points except for the ones that assume Trump is rational and understands what he’s doing. In my view, he doesn’t. And I’ll continue to trade commodities and equities on the assumption that he’ll likely do/say/tweet stupid ■■■■ every now and then. Has served me well the past 3 weeks hehehe. He’s an old dog and only knows one trick.

2 Likes

Must admit: either we’re not getting all of the relevant info. this side or something’s wrong in the State of Denmark. Over here all we hearing about are the threats that Iran is making according to Mr. Trump. But then when they interview an Iranian politician or somebody like that: well I’m not seeing the rattling of the sabers.

1 Like

And that’s what makes a market. You think you know something I don’t know, I think I know something you don’t know, and @anon46773462 is on the sidelines with all the info :wink:

2 Likes

Excellent post!!! LOL!!!

1 Like

HI! @GilasTrading Thanks for dropping by! :slight_smile:
You are right that EIA data on the US market does not reflect for example the OECD situation. Also, there are many different types of crude and there can be surpluses in some and shortages in other types, e.g. Venezuelan heavy.

There are undeniably geopolitical supply risks at present including Libya and Nigeria in addition to what you mention. OPEC and Russia are more likely to be in a position of adding supplies if undue tightness occurs as they did when the Iranian sanctions were first announced - and before Mr Trump declared the waivers!

I think the underlying pressure is eventually for higher prices, but that is seriously capped by the possible downturn in global economic growth if the trade wars are not settled soon. Right now I think Mr Trump is really turning the thumbscrews on China in the hope of getting the agreement in time to reap the political benefits - but I think China is a very different kind of animal - and their president Xi Jinping is president for life - he can afford to bide his time!!!

1 Like

That’s my favourie location! :slight_smile:

I don’t know whether he is or isn’t . But whichever it is, he really excels at it! :slight_smile:

1 Like

Found this by searching for “oil price gulf war” for the sake of interest:

1990 oil price shock

1 Like

And and interesting site and link (I think):

The Battle For Control Over Iraq’s Oil

I never know what to make of things like this to be honest. And in this day and age with all this fake news and other nonsense and conspiracy theories abounding and access to information (true or false or other)…

Guess as it pertains to trading: I’m stuck with my trusty indicator and moving average. Best I can do for me. Nothing that I didn’t already know and learn years ago. Just saying I guess.

1 Like

Guess I’d better mosey on over to my own thread and update the thing lest the huge following get the impression I’m not interested anymore!!! LOL!!!

1 Like

Thanks for those links. That’s some weekend reading for me!

Have a good one!

1 Like

Well somebody just put a rocket under Oil. Particularly Brent Crude.

Suits me.

Possibly only short covering/account adjusting ahead o the UK/US holidays on Monday?

1 Like

Matter of interest: how for off topic can we go on your thread??? You know: the “other stuff” part???

For want of something better to do I’m interested in tracking my performance. But one or two things confusing me (worse still: they’re probably total newbie questions if you can believe that),

Lemme know. Otherwise I can take it over to my thread. Or start another I suppose.