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Busted out of that channel.. Both ERX and ERY are now at a higher risk of going one way or another. My sell trigger happened in ERY..
We have a gap in ERX too. I think we see that fill too
Now might be a time to ease into ERX... I think over the summer it will be time to start buying and holding ERX..
We'll be in this channel For a bit but is only a matter of time...
http://www.ft.com/cms/s/2/69350a3e-f970-11e4-be7b-00144feab7de.html?ftcamp=traffic/social_promo/Saudis_oil_strategy_14May/facebook_US_Reach/essence/auddev&utm_source=facebook_US_Reach&utm_medium=social_promo&utm_term=Saudis_oil_strategy_14May&utm_campaign=essence#axzz3bNXYdces
fighting resistance right now.. I'm Still playing the gaps..
21 maybe?
53.93 seems next target to fill...
I still think this is going down...
This one bumping top resistance.. I'm selling.. I'm building as I go and flipping. Playing the gaps... Exxon CEO just said oil prices will be low for 2 years... I thing we have time to flip and build... Buy on dips sell on highs without fears... Then you pop it with flipped profit..and wait. Rig count down... Also if fracking takes environment hit, This one flies... But we have a few months don't let chance of a life get away from you
I should be ok with 28% return huh?
That 62.60 gap will fill... When.. I think sooner than later...
Thinking this should go to 20.70
I saw conflicting articles. When you see all investment drops in rig count.. Tells me storage issues if any will only be temporary.
I've been trading this eft based on gaps filling and been doing pretty good. Gap now is 53.95.
Contango is not an issue here... Stay far away from UCO.
You might look at TRP, they are pipeline but might also store.
Storage article
http://www.forbes.com/sites/christopherhelman/2015/03/04/u-s-running-out-of-oil-storage-blame-canada/2/
http://www.forbes.com/sites/christopherhelman/2015/04/01/busting-the-myth-of-oil-storage-hitting-tank-tops/2/
Myth...
http://www.businessinsider.com/crude-oil-storage-crisis-peak-2015-3
That means prices are going come down... I know supply is plenty but not out of space. In Louisiana they pump into old brine mines... Owned by the Feds.. Plenty of space...
Interesting
I do agree... I think this might be a good buy on lows.
Supply is still higher than demand and timing will be everything. Some say 6 months.. other say 2 years.
I have flipped this 2 times so far to lower my average.. But still thinking by fall I will have a nice base.
We'll see.
It sure filled.. I am thinking about selling???
But we have a triple bottom!!
I sold 30% of my shares yesterday... But will re-enter... On those huge increases I have been selling. In time I do think this will get to $62. I think this is in play for at least 12 months
BOOM...
OK.. one gap at $55.85 to fill... just do it?
Great little flipping stock...
(Bloomberg) -- The global crude-oil market will return to balance in the second half of this year as demand growth picks up and high-cost producers trim output amid lower prices, OPEC Secretary-General Abdalla El-Badri said.
Consumption in 2015 will increase by 1.2 million barrels a day after rising more slowly than expected last year by less than 1 million barrels a day, El-Badri said Sunday at a conference in Manama, Bahrain.
Crude has lost half its value since June, raising risks for suppliers with comparatively high costs of production.
The U.S. is idling rigs and delaying wells even as it pumps oil from shale and other deposits at the fastest pace since 1983. Cheaper crude is a boon to countries such as China and India that rely on energy imports, and OPEC’s decision on Nov. 27 to maintain production rather than sacrifice market share has added to the glut.
“If we made a cut in the November meeting, then we would have needed to make another cut in January, and then we would need another cut in June as supply will keep increasing from non-OPEC,” El-Badri said.
Non-OPEC supply has grown by 6 million barrels a day since 2008 while production by members of the Organization of Petroleum Exporting Countries has remained at about 30 million barrels, he said. Brent oil futures, a benchmark for more than half of the world’s crude, dropped 0.2 percent today to $59.62 a barrel in London.
Shale Output
OPEC pumped 30.6 million barrels a day in February, an increase of 163,000 a day led by gains from Saudi Arabia, the world’s biggest crude-oil exporter. It was the ninth consecutive month that the 12-member group has produced more than its collective target of 30 million barrels, data compiled by Bloomberg show.
OPEC shouldn’t subsidize the high-cost shale oil producers and that’s why the group decided to keep its output target unchanged, El-Badri said. For shale oil production to be sustainable, prices need to be at least $100 a barrel, he said. Shale oil “is not a challenge for us,” and the market should be left alone to determine prices that will decide which suppliers can survive, El-Badri said.
Price Test
He urged OPEC nations to continue investing in oil while also diversifying their economies, many of which rely mostly on crude exports.
“The current lower price environment is a test for all producers and investors. Low oil prices means less revenues, and less revenues means tighter budgets,” El-Badri said. OPEC made more than $1 trillion in revenue from 2010 to 2014 with oil at $100 a barrel, he said.
Kuwait is in a “critical situation” because crude oil accounts for 94 percent of the Persian Gulf nation’s gross domestic product, Oil Minister Ali al-Omair said at the conference.
Over the next 25 years, the oil industry will need to invest $10 trillion to meet a forecast 60 percent increase in energy demand, El-Badri said. “Fossil fuel will remain central to the energy mix,” he said.
Gap seem to always hit. A chance to enter today and fill that gap at 51.95.
I'm shooting to re-enter at 51. What are you think?
We hit that.. I think we go down to 50..
Citigroup; Oil's Heading To $20 And Opec's Days Are Over
2/10/15
Citigroup C +0.59% is telling us that oil is going to head down to $20 a barrel soon enough. Further, that Opec’s hold over the oil price is now definitively broken. That’s a pair of pretty strong claims and of course we need to take them both with the appropriate amount of salt. But I think the first is possible and the second is likely. Even though I agree that that second, the days of Opec’s control being over, is the more remarkable claim I do think it is the stronger of the two. The reason for this is two little bits of economics.
The first being that monopolies and cartels do indeed exist but in the end they always fall over. If it’s not because of legal action against them, or because of cheating among the cartel’s members, then in the end technological advance will indeed get them. And that change here is fracking for tight oil. No, it’s not that the fracking revolution is cheaper than Saudi conventional oil or anything like that. But because the technology of fracking entirely changes the elasticity of supply of oil and that really does change the whole marketplace.
Citi’s claim is here:
“The recent surge in oil prices is just a “head-fake,” and oil as cheap as $20 a barrel may soon be on the way, Citigroup said in a report on Monday as it lowered its forecast for crude.
Well, maybe, maybe not. I tend not to place all that much strength in predictions of short term price movements: too much like a random walk for most prices. However, the larger claim I do think will come true:
““It looks exceedingly unlikely for OPEC to return to its old way of doing business,” Morse wrote. “While many analysts have seen in past market crises ‘the end of OPEC,’ this time around might well be different,” Morse said.
As far as I know the point was first made in a research paper I linked to here.
“The essential contention is that the development of fracking shale has made oil production like manufacturing, not like traditional resource extraction (ie, that it’s the technology you use to do it which is important, not the limited number of resources you can apply the technology to). And the thing we know about manufacturing is that it becomes ever cheaper to produce things as we’re really pretty good at increasing productivity in manufacturing processes.
Another way of making much the same point is to look at the elasticity of supply and demand. Famously, demand for oil is inelastic with respect to price. If the price doubles or halves we all go on using much the same amount. For we all live about the same distance away from the office as we did, the supermarket is in the same place, baseball practice is in the same park, just as they all were before the price change. In the longer term the average age of the car fleet is about 10 years, the average American moves every 7 years (although that’s a high figure based on all, so young people moving a few times as they start careers is included there) and some 50% of all jobs are destroyed and created again every 6 or 7 years. So over time demand for oil is quite elastic with respect to price as obviously in a world of $200 oil we’re going to be making different choices about commutes, car engine sizes and so on.
On the other side elasticity of supply of oil is pretty inelastic as well. Other than the Saudis who have spare capacity pretty much anyone with an oil field produces at maximum rate whatever the price. And it takes a decade or two to bring a new field from discovery to actually producing. And once you’ve got the field up and running the marginal costs of keeping it so are pretty minimal. So, fields don’t closed down when the price falls and it takes a long time to get a new one going if it rises. And of course the longer the time span, as with everything, the more elastic it does become.
If you’ve a market with a pretty inelastic demand and also a pretty inelastic supply then it’s the price that is going to do the dancing all over the place. Because that’s what prices do in markets, equate supply and demand.
But this is the equation that fracking breaks. A fracking well doesn’t take 20 years and billions of dollars to bring online. It takes $5 to $10 million. And it doesn’t produce for decades either. In terms of significant production a fracking well rarely operates beyond 18 months. So we’ve no longer that inelasticity of supply. Instead we find that we’ve got a rather elastic with regard to price supply: and that entirely changes the price dances that will take place within the industry in the future. As soon as oil goes consistently above, say, $60 a barrel then more fracking will be done, that oil will come to market quickly and that will be the end of the price boom. That’s not an exact number, of course, merely one chosen to illustrate the point.
So, yes, Opec’s days as a cartel able to rook us with high oil prices really are over. For the usual reason that all monopolies and cartels eventually die, technological change. And the most important part of this change, fracking, isn’t actually the technology itself at all. It’s the way that it changes the elasticity of supply of oil with respect to price.
On a related note, this is also interesting:
“Beset by falling prices, the oil industry is looking at about 50,000 existing wells in the U.S. that may be candidates for a second wave of fracking, using techniques that didn’t exist when they were first drilled.
New wells can cost as much as $8 million, while re-fracking costs about $2 million, significant savings when the price of crude is hovering close to $50 a barrel, according to Halliburton HAL -1.06% Co., the world’s biggest provider of hydraulic fracturing services.
From friends working in the industry I know that this definitely works with gas wells. My assumption would therefore be (but beware, I’m about economics, not geology!) that it would work with oil as well. The biggest difference would, I guess, be how long one needs to wait between fracking attempts. And we also know that currently they’re only getting 5-10% of the oil out of those shales: refracking could be the technology that gets them up to something closer to conventional oil recovery rates of 40-50% or so.
Decided to sell my recent Dec and Jan holding for a profit.. and will re-enter sometime soon.. We have 8 months to accumulate per this guy... ERX will have huge increases.. timing is the question.
(Bloomberg) 2/10/15 -- The world’s biggest independent oil trader said crude could resume a slump that saw prices fall 61 percent between June and January, as unrelenting growth in U.S. output leads to a “dramatic” build in the nation’s stockpiles.
The oil market is slightly oversupplied, making another downward move possible in the first half before supply and demand balance in the last six months of the year, Ian Taylor, chief executive officer of Vitol Group, said Tuesday. There are no signs of slowing U.S. output even as the country’s drillers idle rigs, he said.
Brent crude, a global benchmark, has rallied 27 percent from its low point this year. It’s still down by half from last year’s peak as the U.S. pumps the most oil in three decades and OPEC responds by maintaining its own output to keep market share. While companies have pulled rigs off oil fields and cut billions of dollars of planned spending, it will be some time before there is an impact on production, according to the International Energy Agency.
“The market looks a little bit long in the first half of the year,” Taylor said in an interview at a conference in London. “It’s very difficult to be sure you’ve seen the bottom, particularly when in the U.S. production is still going up. We think there are going to be quite dramatic builds in stock for the next few months.”
Oil inventories in industrialized nations may climb near a record 2.83 billion barrels by the middle of the year because supplies remain abundant, the IEA said in a report.
Extreme Cuts
While prices probably aren’t sustainable at current levels in the long term they will remain “relatively modest for the foreseeable future,” said Taylor. It’s possible there will be “another move down” in prices before a recovery, he said. Vitol trades more than 5 million barrels of crude and fuels each day, according to data on its website.
The IEA, a Paris-based adviser to 29 nations, cut its forecast for oil-supply growth from nations outside the Organization of Petroleum Exporting Countries for a second consecutive month, citing cuts in company spending. Production will increase by 800,000 barrels a day this year, the slowest rate of expansion since 2012 and down from an estimate of 1.3 million a day in December.
Supply Risk
“Extreme cuts in investment in output now could lead to an oil deficit by the fourth quarter,” Igor Sechin, chief executive of Russia’s largest oil producer OAO Rosneft, said in a speech at the London conference.
The price slump has prompted retrenchment across the industry with companies including Chevron Corp. and Royal Dutch Shell Plc announcing more than $40 billion in spending cuts since Nov. 1. Investments across the whole industry might drop by about $100 billion this year, according to the IEA.
Rosneft’s projects are viable with crude at $50 a barrel and investments won’t be cut from the 2014 level, Sechin said. The company’s output will remain unchanged this year, he said.
OPEC is “destabilizing” oil markets through its policy of maintaining output to defend market share, Sechin said. The 12-member group gave Russia the chance to join as a member, an offer the country refused because it is unable to reduce output, he said. Russia instead unsuccessfully sought observer status at OPEC, said Sechin.
Russian Energy Minister Alexander Novak last year said Russia couldn’t join in OPEC output cuts because it can’t force the publicly-traded companies that produce its oil to reduce output.
Very good news today. Now work with each other let's go make some money!
Got my proxy Jeff wants me to vote..
I am not sending it back and doing nothing.
Let these guys fight it out at the meeting in March.
Survey...
I think nobody is paying attention. Apathy.
Frank 2
Jeff 4
And I think it's about 3 of us here and the rest all Jeff and crew... lol...
people go to the dice table and bet snake eyes every time too. It might be a hedge too..
Yesterday went down an filled that gap.. it was needed.. Buying on dips..
I got in the green 2 days ago... Should have sold.. to re-enter because I know we are in a 4-6 months opportunity to enter and make money on this one.. The oil companies or world events will increase oil.. those who have already spent capital will make a huge profit as they cut back today on new wells... only to benefit when oil goes back up.. which is not if but when.
It boggles my mind how some people try an ram rod, be bullies.. .when if you have a skill of grace you can usually get what you want with patient and kind behavior.
I will say how you treat a tile guy, a carpet guy, Plumbers, etc is far different than how you treat a company owner.
Theft never works in the long run.
So this event is not progressing the company but setting it back.. Negotiate might be a solution.
I think if you would short both this one and the inverse.. You win... Not sure the % but you win.
Funny... or not depending on your loses..
So the report today is I am down 3% on this strategy.. I keep buying though.. Perhaps by Summer we can make some money.
This double bottom predicted it.. I wish I had.
Agree.. these companies have already started cuts.. to protect against losses.
This ETF has slippage.. so a long might not even benefit when going oil starts to go up.
This ETF buys swaps and futures.. only looking at daily. Thus you buy a future priced higher when they settle at spot. You just lost.
Oil Drillers ‘Going to Die’ in 2Q on Crude Price Swoon
Bloomberg
By Joe Carroll
14 hours ago
Oil drillers will begin collapsing under the weight of lower crude prices during the second quarter and energy explorers who employ them will shortly follow, according to Conway Mackenzie Inc., the largest U.S. restructuring firm.
Companies that drill wells and manage fields on behalf of oil producers will be the first to fall after the benchmark American crude, West Texas Intermediate, lost 57 percent of its value in seven months, said John T. Young, whose firm led the city of Detroit through its 2013 bankruptcy.
More from Bloomberg.com: Oil Jumps as Saudi King's Death Spurs Speculation Over Policy
Oil companies have slashed thousands of jobs, delayed billions of dollars in projects and dropped or scaled back expansion plans in response to the prolonged rout in crude prices. For oilfield service providers that test wells and line the holes with steel and cement, the impact of price reductions forced upon them by explorers will start to pinch hard during the second quarter, Young said Thursday.
"The second quarter is going to be devastating for the service companies," Young said in a telephone interview from Houston. "There are certainly companies that are going to die."
More from Bloomberg.com: Oil Drillers ‘Going to Die' in 2Q on Crude Price Swoon
Oilfield-service providers are facing a "double-whammy," he said. Even as oil companies are demanding 20 percent to 30 percent price reductions, they're also extending wait times before paying their bills, enlarging cash-flow gaps for the drilling and equipment firms, he said.
Squeaky Wheels
Young, who has restructured more than a dozen energy companies and advised Kirk Kerkorian's Delta Petroleum Corp. through its 2011 bankruptcy, is warning drillers to monitor whether the oil producers they work for have protected future cash flows with hedging instruments like swaps and collars.
More from Bloomberg.com: OPEC Will Blink in Battle With U.S. Shale Drillers, Poll Shows
The amount of projected 2015 oil and natural gas output a company has hedged is a strong indicator of whether they'll be able to pay their bills, he said. Another important metric is how much is drawn on revolver loans, Young said.
"I'm telling them they really have to keep an eye on this stuff and you've got to be the squeaky wheel," he said. "You've got to start filing liens if you see a company starting to go down." In the U.S., a lien is a legal claim against a debtor's property to force payment of a delinquent bill.
West Texas Intermediate, or WTI in oil-patch parlance, fell 3.1 percent to $46.31 a barrel Thursday in New York. The price has been below $70 since the beginning of December and touched a 5 1/2-year low of $44.20 on Jan. 13.
"When I saw WTI hit $65, I thought we're going to be really busy with restructurings," Young said. "When it hit the $40s, I knew we were looking at outright liquidations."
To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net