• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 9 hours Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 7 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 9 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 4 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 23 hours U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 1 day Nord Stream - US/German consultations
  • 3 days An Indian Opinion on What is Going on in China
  • 3 days Can Technology Keep Coal Plants Alive and Well?
  • 5 days Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 12 hours Forecasts for Natural Gas
  • 21 hours Australia sues Neoen for lack of power from its Tesla battery
  • 3 days Storage of gas cylinders
  • 4 days Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
Martin Tillier

Martin Tillier

More Info

The No.1 Contrarian Play In Oil

Regular readers of my ramblings will be aware that I don’t believe that this drop in oil will be of any long term significance. It is understandable, for sure, as the focus is on supply figures and inventories that indicate that U.S. shale producers are back in business and at least making up for the OPEC cuts. There are, however, three reasons that it is not a long term price adjustment.

Firstly, that shale production is, as we are already all too aware, extremely price sensitive. It has become the marginal source of oil and the cutoff for profitability, and therefore extraction, is starting to look like it is somewhere around $50. Secondly, as the focus of the market has been on supply there is still an improving outlook from the demand side of the equation, as tax cuts and stimulative infrastructure spending from the Trump administration are still on the cards. The prospect of cutting government revenue while launching a big infrastructure program is, I suspect, at least in part what is causing the third thing that limits the downside and makes for a bullish outlook for oil…the dollar has reversed course and is headed lower. Add all of those things up, then, and a pop back up above $52 looks likely in fairly short order.

(Click to enlarge)

The last week or so has seen a parade of oil talking heads on the business channels as the drop is analyzed and the fact that the vast majority of them agree that oil could fall a lot further only…




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News