{"id":16507,"date":"2016-01-15T06:52:15","date_gmt":"2016-01-15T11:52:15","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16507"},"modified":"2016-01-15T06:52:15","modified_gmt":"2016-01-15T11:52:15","slug":"re-covering-oil-and-war","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16507","title":{"rendered":"(Re-)Covering Oil and War"},"content":{"rendered":"

(Re-)Covering Oil and War<\/a><\/h3>\n

The first thing that popped into our minds on Tuesday when WTI oil briefly broached $30 for its first $20 handle in many years, was that this should be triggering a Gawdawful amount of bets, $30 being such an obvious number. Which in turn would of necessity lead to a -brief- rise in prices.<\/p>\n

Apparently even that is not so easy to see, since when prices did indeed go up after, some 3% at the \u2018top\u2019, \u2018analysts\u2019 fell over each other talking up \u2018bottom\u2019, \u2018rebound\u2019 and even \u2018recovery\u2019. We\u2019re really addicted to that recovery idea, aren\u2019t we? Well, sorry, but this is not about recovering, it\u2019s about covering (wagers).<\/p>\n

Same thing happened on Thursday after Brent hit that $20 handle, with prices up 2.5% at noon. That too, predictably, shall pass. Covering. On this early Friday morning, both WTI and Brent have resumed their fall, threatening $30 again. And those are just \u2018official\u2019 numbers, spot prices.<\/p>\n

If as a producer you\u2019re really squeezed by your overproduction and your credit lines and your overflowing storage, you\u2019ll have to settle for less. And you will. Which is going to put downward pressure on oil prices for a while to come. Inventories are more than full all over the world. With oil that was largely purchased, somewhat ironically, because prices were perceived as being low.<\/p>\n

Interestingly, people are finally waking up to the reality that this is a development that first started with falling demand. China. Told ya. And only afterwards did it turn into a supply issue as well, when every producer began pumping for their lives because demand was shrinking.<\/p>\n

All the talk about Saudi Arabia\u2019s \u2018tactics\u2019 being aimed at strangling US frackers never sounded very bright. By November 2014, the notorious OPEC meeting, the Saudi\u2019s, well before most others including \u2018analysts\u2019, knew to what extent demand was plunging. They had first-hand knowledge. And they had ideas, too, about where that could lead prices. Alarm bells in the desert.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

(Re-)Covering Oil and War The first thing that popped into our minds on Tuesday when WTI oil briefly broached $30 for its first $20 handle in many years, was that this should be triggering a Gawdawful amount of bets, $30 being such an obvious number. Which in turn would of necessity lead to a -brief- […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3,5],"tags":[2674,130,4232,588,592,1775,595,596,600,7738,670,4740,701,11732,11733,834,11734,862,1451,895],"class_list":["post-16507","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","category-geopolitics","tag-automatic-earth","tag-china","tag-inventory","tag-oil","tag-oil-price","tag-oil-price-collapse","tag-oil-production","tag-oil-supply","tag-opec","tag-raul-meijer","tag-recovery","tag-saudi","tag-saudi-arabia","tag-storage","tag-tankers","tag-us","tag-wagers","tag-war","tag-west-texas-intermediate","tag-wti"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16507"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16507\/revisions"}],"predecessor-version":[{"id":16508,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16507\/revisions\/16508"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}