Citigroup just announced a price target of $75 this Summer for WTI citing geopolitical concerns.
Off topic but just saw an interesting statistic i.e. iron ore inventories in China are the lowest that they have been for four years now and falling which will affect price. It’s touted as being the out performing commodity for the year.
Is that as dark as it will get during the summer? BTW it’s beautiful!
Depends on the weather. When it is very cloudy then it is noticeably darker. Last night was a totally clear sky and a lovely sunset. This was also about midnight:
So a new week starts and there is a lot of stuff ahead of us!
The weekend saw very little change in oil prices. We are still very much caught between the cold light of weakness in global economic growth and fears of recession and the heated fears of the Iranian match in the fireworks box of the middle east.
President Trump appeared to put on a humanitarian stance by halting an attack on Iran because it might kill 150 people. My take on this was that it shows Mr Trump totally unwilling to start a forest fire that cannot be contained at this stage in his presidential campaign - but not wanting to appear weak and give Iran a wrong message. So we fabricate a picture of a “kind” president holding back his viscous,salivating dogs of war that would unhesitatingly tear Iran to bits should he release his grip on their leashes. And adding to this a “heartfelt” sigh that: Please put away your dreams of nuclear weapons and I will make you great again and I will be your best friend!
I doubt Iran is taken in by this, either…
So we have a G20 meeting, a reunion of the US/Chinese negotiating teams, a high profile meet between Mr Trump and Mr Xi Jinping, a meeting between Iran and the remaining 5 parties to the 2015 nuclear accord and then an OPEC+ meeting.
Xi Jinping has met with N. Korea’s Kim Jong Un prior to G20 and so Mr Trump also sent Kim another “love” letter which Kim described as “excellent”. At the same time, Russia has been offering to assist Iran with its oil exports and payment facilities in the light of US sanctions.
Is this just a lot of political manouvering prior to these high profile meetings - or further evidence of global power changes underway?
As I see it, Mr Trump is in dire need of some concrete results at this point. His progress with N.Korea reached a stalemate with no decisive results, he started this Iran face-off that is now at its highest point of sensitivity with no signs of a solution. He started the trade war with China which so far has only produced widespread weakened global economic growth. He has alienated and insulted at various points all the traditional US allies without any material benefit (except maybe some increased NATO contributions). His attempts to replace Venezuela’s Maduro with Guaido have so far failed to evict the incumbent president (who is supported by both Russia and China). He has alienated environmentalists throughout the world, both domestically and abroad but without any evidence that they were wrong or misguided. But the domestic stock market remains strong and the southern border is looking better protected - but is that enough in an election run-up?
This is not a political speech, it is just a scene-setter for what we might expect this week. Whilst the G20 meeting is unlikely to produce anything overly concrete, it cannot avoid discussing the twin issues of trade wars and the Middle East cauldron. Both key issues have enormous potential repercussions that could reverberate throughout the global economies for years to come. The key outcome, I think, will be who comes out of it with most credibility. The most likely names are Trump, Jinping and Putin. Afterall, the UK prime minister Theresa May is already history and the EU representatives Tusk and Junckers are ending their watches.
Europe is in turmoil and the US, China and Russia are power-hungry.
And then beyond all that, OPEC+ is yet to show its hand.
Volatility? Yes, I think so. 
I should have stayed the course when I got in at 54.10!!
Great summation Manxx, thanks.
My impression is that The Trump Trio are out of their league. I know that is easy to say tapping away at 6:35AM. When it comes down to it he is a real estate developer and by analysis has only the “appearance” of success. Lot’s of talk and knee-jerk reaction, a deep misunderstanding of how government works and that the office of the President of the United States doesn’t come with crown. It’s not missing. There never was one.
My biggest concern is all three “toughs” are now carrying the biggest bats in the world.
KC
I don’t know if it’s just me BUT am I seeing chinks in the armor with Big Red there???
It first struck me with the drone saga and his reasons for backtracking on his tough talk i.e. the number of people that would be killed vs. the fact that the drone was simply unmanned. And now it would appear he is softening on a lot of other things too (matter of fact if these love letters keep going back and forth between him and good 'ol Kim there then they may as well just get a room and have done with it). What I’m saying is that it takes a certain kind of person to authorize such action and go through with it and then be able to live with your decision. Personal opinion is that Bush and Clinton (I mention those two simply because two different sides of the aisle) would have had no issue. I guess my point is: is he that good a negotiator and believes he can deal on anything. Or does he simply just not have what it takes.
Doesn’t have what it takes.
I was thinking the same thing regarding chinks in the armor. I think he’s realized he’s in the deep end of the pool.
I don’t believe it is a lack of resolve or a big humanitarian heart, afterall, we had the big MOAB in Afghanistan. I think military targets and soldier deaths are all “acceptable” casualties at this level.
I fully believe this is purely political and avoiding getting into an escalating situation that he is not able to control and would present the domestic opposition with invaluable support if/when the body bags start rolling home.
Besides, handling the dynamics of a war situation would be a full-time occupation for Mr Trump at a time when he wants to focus on results, as well as boosting the fans and crushing the opposition in his own back yard. A war theatre spreading to oil supplies, Saudi Arabia and Israel would not be at all beneficial - unless it could be ended quickly and definitively …and, of course, in the US best interests.
Maybe it’s just a matter of “let’s talk!” being the safer approach right now.
Never think like that! 
It you get in with a strategic set-up and then exit based on exit criteria, then the trade is good. We will never get the whole move! You can think that looking back - but you could easily be looking back saying, “why didn’t I take the profit when I had the chance!”
There is always the re-entry prospects if a firm trend does start to evolve - but can demand a lot of concentration. I’ve been in and out regularly during this move and closed my last long this morning at 57,81. I am now totally flat and sidelined.
Point is, IMHO, a good trade is one that is entered and exited in line with one’s strategy - not whether each individual trade make a profit or loss or every pip from the move. The strategy’s rules, and its risk/management parameters, define whether an overall profit emerges over time - not each specific trade.
Look forward to hearing more!
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Sorry. Will stay on track.
this is a major issue I am trying to temper. I will enter/exit in anticipation and not wait for the signal. I keep reminding myself to be satisfied with a “chunk” of trend; don’t need the whole thing.
KC
Hi @frandlost KC,
You are certainly not alone in that! I try to take my signals more from the Daily/4H charts nowadays (instead of my old 1H/15m combo when I was a “younger” trader! 
) - but does that stop me “accidently” looking in every now and again and acting prematurely? NO!! I do it time and time again! 
and it nearly always turns out to be worse than if I’d waited.
It almost requires one to reach a state of “semi-boredom” with trading in order to find the patience to wait without pre-empting signals!! But it is really worth working on the discipline aspect in your trading. It also helps avoid over-trading.
Not much change on the day so far.
Prices had dipped earlier, before climbing back to earlier levels, when Russia put even more weight on the outcome of the Trump/Jinping meeting by saying that they will wait for the outcome of the G20 talks before deciding whether to agree to extending OPEC+ production cuts next week.
Russia’s Energy Minister Alexander Novak said that ”OPEC+ needs to understand oil demand in the third and fourth quarters, the pace of growth in the world’s biggest economies and the effects of sanctions before making a decision on the deal”.
Apart from a brief move above $58 (WTI) in the morning, Monday has spent most of the day below last week’s high. We are currently sandwiched between the Daily and Weekly 200SMA’s but these will mean nothing if the market moves in response to G20 comments or US/Iran developments.
There are supposedly new Iran sanctions being imposed today, but I have not seen any news about that - maybe I’ve missed it. 
Little new overnight and we are still trading (not surprisingly) just under the top of last week’s range.
The additional sanctions applied by the US to Iran came in the form of financial constraints on the assets of the Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials. Whilst this cannot be any great surprise to the Iranians, it does not help towards starting any negotiations between the two countries, either.
Iran has so far denied any involvement in the earlier attacks on oil tankers and infrastructure and only confirmed shooting down the US drone as it was claimed to be in Iranian airspace. Therefore we are unlikely to see any responsive direct military activity from Iran, especially during such a high-profile week leading up to the G20, if at all. But that does not exclude further unidentified attacks on oil targets from whoever was responsible for the earlier attacks.
Interestingly, Mr Trump also stated that other countries should protect their own oil shipping in the Middle East rather than have the United States protect them. Is this again just an issue of the US bearing too high a proportion of defence costs or an attempt to get more allied military presence into the area?
Comments suggest that expectations from both the war threat and the upcoming Trump/Jinping meeting are weakening and markets are further stagnating in the wait for new input.
Certainly, we are facing a rare situation where the outcomes are more than just near-term price direction. We are looking at possible wide-scale destructive military eruption in the Middle East and a possible catalytic start to a global economic recession in an already weakening growth situation.
Both events would have a major impact on oil supplies and demand - and therefore on price. Little wonder we are all looking and waiting and wondering…
Just for the record, the first of this week’s crude oil inventories is released later today by the API. Any marked deviation one way or the other will have an impct but I suspect it will be short-lived ahead of the EIA release tomorrow and the huge relevance of the G20 at the end of week and next week’s OPEC+ meetings - but worth being aware of.
Well we did get quite a deviation with a draw quite significantly exceeding expectations. But I confess I didn’t expect to see quite such a sustained follow-through on the upside. Having re-entered longs earlier in the day on a dip below $58, I jumped out at 58.50 in anticipation of the market retracing ahead of the weekend G20 events and comments - but we have sustained the gains overnight and breached the $59 level.
We have also passed up over the Daily 200SMA level.
The API reported a draw in crude oil stockpiles of 7.5 mill barrels for last week, which was noticeably more than the expected draw of around 2.5 mill barrels. This caused an immediate spike in prices which had been drifting around the top end of last week’s price range all week so far.
The API also reported a substantial draw in gasoline inventories for the week, at 3.17 mill barrels, compared with analysts’ estimates of a build in gasoline inventories.
However, although these figures are bullish when considered in isolation, US crude oil inventories are still showing a net build of 26.69 mill barrels during the current year to date, which somewhat softens the relevance of one set of data.
The EIA also releases its own version of the weekly inventories data later today. Last week they reported a draw and today is expected to see more of the same at around a drop of 2.5 mill barrels.
