{"id":31241,"date":"2020-03-11T10:34:35","date_gmt":"2020-03-11T10:34:35","guid":{"rendered":"https:\/\/tabadul.demo.ly\/en\/oil-expert-oil-price-development-challenges-price-war-intentions\/"},"modified":"2020-03-11T10:34:35","modified_gmt":"2020-03-11T10:34:35","slug":"oil-expert-oil-price-development-challenges-price-war-intentions","status":"publish","type":"post","link":"https:\/\/tabadul.tv\/en\/oil-expert-oil-price-development-challenges-price-war-intentions\/","title":{"rendered":"Oil expert: “oil price development challenges price war intentions”"},"content":{"rendered":"\n

The oil expert Muhamed Ahmed wrote:<\/p>\n\n\n\n

Why does oil market move against all odds?<\/p>\n\n\n\n

Who focuses only on the spot price, he expects it to keep on decreasing; at $32 a barrel, Russians declared a barrel would hit $30. Meanwhile, the price rose to $35 a barrel. <\/p>\n\n\n\n

On the other hand, the Saudis claimed they would reach a production level of 12 million barrels per day. As a result, the price jumped to 38 dollars a barrel.<\/p>\n\n\n\n

It’s either these states lie, or speculators are\u00a0in a state disbelief<\/p>\n\n\n\n

After the Saudi announcement, the expected price reaches $25 per barrel<\/p>\n\n\n\n

Well, first see the forward rate curve<\/p>\n\n\n\n

Look at the yellow line, which represents today’s price movement; speculators are bounding rates at the end of the curve, still above $50, yet moving up compared to yesterday’s gray line.<\/p>\n\n\n\n

This is where mystery could be solved<\/p>\n\n\n\n

Look at the Contango, represented by the triangles <\/p>\n\n\n\n

The difference between May 2020 (the closest month) and March 2021 (The furthest month) is growing, showing pressure for higher prices.<\/p>\n\n\n\n

If the difference remains the same, speculators will sell their oil at that price, buy from the spot market and pay a storage cost that does not exceed $2 a barrel for a whole year.<\/p>\n\n\n\n

The difference now is $5.47 a barrel, which means that they will achieve $3.47 per barrel.<\/p>\n\n\n\n

The market is moving toward adjustment, and there is a lot of money being won by speculators, and a lot of money being lost by producers.<\/p>\n\n\n\n

Until this moment, the structure of the market does not recognize the decline of the future price of $50 per barrel, and that is why the price moves up to an equilibrium position regardless of all Saudi and Russian decisions.<\/p>\n\n\n\n

This is the best solution for the market and for the continuation of oil shale producers. In case there is a change in the structure, and if oil shale producers exit, there would be a supply crisis in a period not exceeding two years, and prices might rise to more than $100 per barrel, but -for sure- they will not last, as this will bring back high cost producers. That is balance.<\/p>\n\n\n\n

<\/p>\n\n\n\n

\"\"<\/figure><\/div>\n","protected":false},"excerpt":{"rendered":"

The oil expert Muhamed Ahmed wrote: Why does oil market move against all odds? Who focuses only on the spot price, he expects it to keep on decreasing; at $32 a barrel, Russians declared a barrel would hit $30. Meanwhile, the price rose to $35 a barrel. On the other hand, the Saudis claimed they […]<\/p>\n","protected":false},"author":1,"featured_media":31242,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9271],"tags":[9586],"class_list":["post-31241","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-oil-expertoil-prices"],"_links":{"self":[{"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/posts\/31241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/comments?post=31241"}],"version-history":[{"count":0,"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/posts\/31241\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/media\/31242"}],"wp:attachment":[{"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/media?parent=31241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/categories?post=31241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tabadul.tv\/en\/wp-json\/wp\/v2\/tags?post=31241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}