And so, they all stopped talking about $ 100 oil




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Ironworkers secure the wire, a cable used to lower and lift tools and other equipment in a deep shaft over a Chevron Corp. oil helicopter that was ready for hydraulic interruption in the Perm Basin on Thursday, March 1, 2018. & Nbsp; Photographer: Daniel Acker / Bloomberg&copy; 2018 Bloomberg Finance LP

If there is one thing worth the price of oil on the global market, it is that no one really knows where the price of oil is in the global market. Just over six weeks ago, oil news was largely focused on how high it could be, as the Brent price was $ 86 / bbl on October 3, while the price for West Texas Intermediate (WTI) was $ 76 / bbl.

At that time, banks, investment houses and analysts gathered to find out who could predict the exact day when the Brent price was over $ 100 and returned the commodity to the glorious days of 2014. Saudi Arabian and Russian officials were engaged in discussions on how much additional production will be marketed because the US sanctions against Iran will be restored.

That was when it was now. From October 3rd to 3:00 pm on November 13 (as I have compiled this piece), both Brent and WTI have fallen by about $ 21 / bar, a loss of 24% for Brent and a 28% loss for WTI. On November 13, he recorded a record 11th consecutive trading day when the WTI price dropped because the price dropped by more than 4 USD / bbl.

Since this unfortunate day six weeks ago, there have been a number of factors that have led to a fall in prices, including in connection with the continued rapid increase in shale production in the US. In fact, maybe one of the biggest factors for this week's shameful shot was estimate published last week (US Energy Information Administration, EIA) said US daily raw material production increased from 11.2 mph to 11.6 mph during the week. Such a huge jump in one week seems unlikely and these weekly estimates are often revised later, but this large amount combined with the current large jump on the active platform seems to scare the market.

And again the market was a bit horrible, and continuing speculation about the slowdown in China's enormous economy together with the resulting monthly revision of the expected increase in demand for OPEC in 2019, which is still a healthy estimated growth of 1.29 mmbopd) undoubtedly had its own psychological impact on the market. & Nbsp; As I noted last week, everything that appeared on the market came at a time when oil and gas producers in the US are trying to complete their capital budgets and drilling programs by 2019, which increases uncertainty in a very unsatisfactory time.

Here is what we know for sure: Over the past 12 months, assuming the latest EIA figures, total oil production in the US has grown somewhat overwhelming 2 million barrels per day, because gradual technology and increased efficiency enable producers to drill volumes from each subsequent well. & nbsp; A reasonable person a year ago could predict that the US industry could reach half of this overall increase.

The result of all of this additional US production coming to the market is rapidly increasing pressure on OPEC and other exporting countries to adjust their volumes accordingly to keep the commodity price at the desired level. Given that Iran's export capacity has increased again since July to reintroduce US sanctions, both Saudi Arabia and Russia have responded by raising their own production levels so "empty" they believed was created in the global offer. & nbsp; With the benefit of a review, we now know that it has turned out to be an incorrect assessment of the real conditions of the raw market, which suddenly seems to be unbalanced with the surplus of the offer.

This will help to show the original point: If Saudi Arabia and Russia do not know where the price of oil is, who does it really do? This explains why nobody today talks about returning to $ 100 oil.

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The crane provides cable ropes that are used to lower and lower tools and other facilities in a deep shaft, over the Chevron Corp. oil drilling rig, which was ready for hydraulic cracking in the Permian Basin on Thursday, March 1, 2018. Photographer: Daniel Acker / Bloomberg© 2018 Bloomberg Finance LP

If there is one thing worth the price of oil on the global market, it is that no one really knows where the price of oil is in the global market. Just over six weeks ago, oil news was largely focused on how high it could be, as the Brent price was $ 86 / bbl on October 3, while the price for West Texas Intermediate (WTI) was $ 76 / bbl.

At that time, banks, investment houses and analysts gathered to find out who could predict the exact day when the Brent price was over $ 100 and returned the commodity to the glorious days of 2014. Saudi Arabian and Russian officials were engaged in discussions on how much additional production will be marketed because the US sanctions against Iran will be restored.

That was when it was now. From October 3rd to 3:00 pm on November 13 (as I have compiled this piece), both Brent and WTI have fallen by about $ 21 / bar, a loss of 24% for Brent and a 28% loss for WTI. On November 13, he recorded a record 11th consecutive trading day when the WTI price dropped because the price dropped by more than 4 USD / bbl.

Since this unfortunate day six weeks ago, there have been a number of factors that have led to a fall in prices, including in connection with the continued rapid increase in shale production in the US. In fact, maybe one of the biggest factors for this week is a negligible slide, an estimate published last week by the US Energy Information Administration (EIA) that US oil production has risen weekly over a week from 11.2 mmbopd to 11.6 mmbopd. Such a huge jump in one week seems unlikely and these weekly estimates are often revised later, but this large amount combined with the current large jump on the active platform seems to scare the market.

And again the market was a bit horrible, and continuing speculation about the slowdown in China's enormous economy together with the resulting monthly revision of the expected increase in demand for OPEC in 2019, which is still a healthy estimated growth of 1.29 mmbopd) undoubtedly had its own psychological impact on the market. As I noted last week, everything that appeared on the market came at a time when oil and gas producers in the US are trying to complete their capital budgets and drilling programs by 2019, which increases uncertainty in a very unsatisfactory time.

Here is what we know for sure: Over the past 12 months, assuming the latest EIA figures, total oil production in the US has grown somewhat overwhelming 2 million barrels per day, because gradual technology and increased efficiency enable producers to drill volumes from each subsequent well. A reasonable person a year ago could predict that the US industry could reach half of this overall increase.

The result of all of this additional US production coming to the market is rapidly increasing pressure on OPEC and other exporting countries to adjust their volumes accordingly to keep the commodity price at the desired level. As Iran's export capacity has risen again since July to reintroduce US sanctions, both Saudi Arabia and Russia responded by raising their own production levels to fill the "emptiness" that they believed to be creating in the global offer. We now know with the benefit of a review that it has been shown that it was a misinterpretation of actual conditions on the raw material market, which suddenly seems to be unbalanced by excess supply.

This will help to show the original point: If Saudi Arabia and Russia do not know where the price of oil is, who does it really do? This explains why nobody today talks about returning to $ 100 oil.


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