Oil may not be out of the woods yet?
Updated
There is still the potential for oil to slip to test or drop below the recent lows. After the big drop we had a stutter step and a retracement followed by another big drop. If price disrespects the 4 hr trend line look for a retracement. It is not if, but when and how far. While oil futures are painting a rosy picture price may be being slightly manipulated.
- Iran is back on track and will be pumping out record volume.
- Reserves are at all time records or near enough.
-We are still not using as much as we are producing.
As the higher cost extraction oil will be shut in we will get to a balance. Then we can see prices rise as reserves fall and equilibrium is restored.
On the other hand as a commodity that can be manipulated there is always the chance that the puppet masters can keep the price inflated.
- Iran is back on track and will be pumping out record volume.
- Reserves are at all time records or near enough.
-We are still not using as much as we are producing.
As the higher cost extraction oil will be shut in we will get to a balance. Then we can see prices rise as reserves fall and equilibrium is restored.
On the other hand as a commodity that can be manipulated there is always the chance that the puppet masters can keep the price inflated.
Note
I am not saying this is going to happen, rather we should be aware it could happen. We are still producing more oil than we are using (97M bbl consumed/day 101M bbl produced/day). Until this trend reverses price is being manipulated. If the manipulators run out of energy price can tumble.
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