• 5 minutes Malaysia's Petronas vs. Sarawak Court Case - Will It End Up In London Courts?
  • 9 minutes Sell out now or hold on?
  • 16 minutes Oil prices going down
  • 8 mins Oil prices going down
  • 21 hours We Need A Lasting Solution To The Lies Told By Big Oil and API
  • 5 hours After Three Decade Macedonia End Dispute With Greece, new name: the Republic of Northern Macedonia
  • 21 hours Another WTH? Example of Cheap Renewables
  • 8 hours What If Canada Had Wind and Not Oilsands?
  • 4 hours Two Koreas Agree To March Together At Asian Games
  • 2 hours Sell out now or hold on?
  • 3 hours Oil and Trade War
  • 21 hours The Wonderful U.S. Oil Trade Deficit with Canada
  • 4 hours Geopolitical and Political Risks make their strong comeback to global oil and gas markets
  • 20 hours The Permian Mystery
  • 14 hours No LNG Pipelines? Let the Trucks Roll In
  • 8 hours Australia mulls LNG import
  • 14 hours China & India in talks to form anti-OPEC
  • 2 days Russia's Rosneft 'Comfortable' With $70-$80 Oil Ahead of OPEC Talks
  • 2 days Trump Hits China With Tariffs On $50 Billion Of Goods
Alt Text

Oil Falls On OPEC Uncertainty

Oil prices seesawed for most…

Alt Text

China’s Oil Demand Could Take A Big Hit

In the last three years…

Martin Tillier

Martin Tillier

More Info

Trending Discussions

Oil’s Big Drop: The Contrarian View

Rig

One of the first things I learned as I started my career in a dealing room was that, unlike in a marriage, on a trading desk being a contrarian made sense. You have only to look at the fickle nature of opinion to see why. Just a few days ago it seemed like everybody in the oil market was convinced it was going higher. OPEC’s cuts and the expected boost to U.S. growth from Trump’s administration led to everyone and their mom buying oil futures. I pointed out here and elsewhere that that huge ratio of longs to shorts in the market meant that vulnerability was to the downside, especially as the OPEC cuts could be offset by increased shale production in the U.S. and that the “Trump effect” was a hope rather than a fact at this point.

Sure enough, over the last couple of days we have seen the market turn as that increased U.S. production has become obvious, in turn leading to cracks seeming to appear in OPEC’s much heralded agreement, and with it opinion has shifted and everyone is bearish. Now that we are here, though, it is necessary to once again take a contrarian view. Now that everybody seems convinced that we are dropping back to the low $40s for WTI it is getting close to the time to buy. I can see somewhere around $47 being achievable over the next few days, but around there or at the first sign of a turnaround I would be a buyer.

(Click to enlarge)

The crazy thing about this move is that the conditions that have supposedly…

To read the full article

Please sign up and become a premium OilPrice.com member to gain access to read the full article.

RegisterLogin

Trending Discussions





Oilprice - The No. 1 Source for Oil & Energy News