The Black Gold Thread (Crude Oil)

Since we have some interest in the liquid energy, maybe we can produce a constructive thread.

Oil Is a Buy Only When Egypt Dust Settles:
http://seekingalpha.com/article/251414-oil-is-a-buy-only-when-egypt-dust-settles?source=hp_latest_articles

Published in the Guardian Newspaper yesterday if you missed it.

WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices
US diplomat convinced by Saudi expert that reserves of world's biggest oil exporter have been overstated by nearly 40%


http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

Great piece on some of the fundamental details on saudi Oil fields. Undoubtedly, the most telling stat is the oil/water mix coming from the wells. The more water used to extract Oil, the more damage it does to the well long-term.


Here's Why You Don't Need Wikileaks To Know That Saudi Oil Reserves Are Overstated

http://www.businessinsider.com/wikileaks-saudi-oil-reserves-2011-2?utm_

OPEC to boost output: http://www.newzfor.me/news/144211563.aspx

Excerpt from Futures Magazine:
By: DOMINICK A. CHIRICHELLA


Countries currently at risk are Bahrain, Algeria, Iran and Yemen where protests have continued. The total volume of oil from all of these countries combined is about 5.6 million barrels per day which exceeds the current EIA estimated surplus crude oil capacity of 4.65 million bpd in OPEC by about 500,000 bpd. Also as I mentioned yesterday the majority of the surplus crude oil capacity (3.76 million bpd) sits in Saudi Arabia which is also a potential hot bed as it is a ruling monarchy state. Whether or not the protests in any of these countries will continue to evolve or even spread to other areas like Saudi Arabia or Kuwait is a very big question.

http://moneywatch.bnet.com/investing/blog/against-grain/opec-sources-saudi-arabia-worried-about-strife-will-let-oil-rise-to-120/943/?tag=col1;fd-banner-news

World Oil prices from the U.S. Department of Energy: http://www.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm

African Blends are strong, specifically Nigeria's Bonny Light and Forcados

Saudi Spare capacity really not what we think: http://ftalphaville.ft.com/blog/2011/03/08/507161/the-saudi-capacity-puzzle/

Breakdown of Libya's Oil exports. The recipients are not the U.S.:

Italy- 28%
France- 15%
China- 11%
Germany- 10%
Spain- 10%
Greece- 5%
Britain- 4%
The US- 3%
All Others- 14%

How is everyone oriented on crude this week?

To me 98's Key on August WTI aka Im biased long this week as long support holds.

The aggressive risk off end last week leads me to think short term reversal squeeze.

Long term price action coming ot a squeeze on crude to the lower BB possibly leading to upshoot to upper ranges (below key resistance).



Only thing that I see that can force crude to new ranges is clear consensus on supply/demand data from opec and agreed production increases across the board. Or very weak econ data in the OECD confirming bearish sentiment on weak seasonal demand.

thoughts?

Goldman Presents Three Scenarios For Where The WTI-Brent Spread Is Headed (And Why The Firm Has Been Wrong So Far)

http://www.zerohedge.com/article/goldman-presents-three-scenarios-where-wti-brent-headed-and-why-firm-has-been-wrong-directio

And thus why I trade outrights...

and thus why I got hammered this week.

Break on support makes me want to trade this further down, but strong short covers and algos hunting stops above makes me worried. Will have to wait it out to see if any favorable action can come my way.

Failure of DX to breach 76.5 can cause severe reversals esp if Eurozone manages to get their crap together. Arguements are still in favor of Dollar up, crude down though... I doubt the greek cabinet reshuffle will do squat... let sit back and watch europe become the next MENA riot/protestor zone...

Is There Equity Beta in Oil?
http://media.pimco.com/Documents/Viewpoints--Oil%20Equity%20Beta%20FINAL%20formatted%20July%202011%20US.pdf

Fundamentally speaking, geopolitical risks such as Nigerian protests and Iranian Military exercises threaten to instill a permanent bid under the fossil fuel. Regardless, here is my interpretation of the medium-term price action over the next 2-4 months: http://twitpic.com/86guah