With all respect to the trader community, there is now some craziness in our ranks about the oil price: some are trying to catch a hype and predict the further movement casting fortune-telling dice, some, putting a dozen of indicators on the chart and drawing triangles, pennants and flags, furiously declare that they know for sure that oil should grow in the long run, as if it, oil, follows all these tricky technical indicators.
But after looking at about a dozen oil price posts, none of them can fundamentally explain what will happen to oil and its price. I always say: u must understand the market.
I do not pretend to the truth in any way and under no circumstances, I will just try to explain my vision of what is going on. That's what I think about all this:
1. Against the background of the pandemic, the consumption of oil products is falling. There are several major consumer countries in the world, such as America and China. Everyone knows what is happening to the production market in China now. The real sector of the Chinese economy has stopped at the moment, oil consumption has already fallen by 30%.
2. All over the world, the major consumers of oil products are the transport industry. Airliners, cars and cruise liners are the leaders in oil product consumption. Now, from this point of view, look at what happened with CCL and OXY. Occidental Petroleum fell from 47$ (mid-January) to 10.2$ ! Moreover, the falling of
OXY was amplified by the news that the company stops paying dividends. Guys, this is a serious reason to think about it.
The same is true for the Carnival Cruise Lines: they fell from $50 to $11.
What does that mean for oil? Consumption is falling!
3. Let's move on. In order for the price of a product to rise again, two things are necessary: either demand must rise or supply must fall. Any first-year economics college student knows this. What we see is that saudits do not reduce oil production. Even the Yemen bombing has not brought any serious increase in the cost of oil. And that's why: when the price of oil drops to balance your budget, you simply have to produce more oil. Against this backdrop, Saudi have started selling oil below market value. They are dampening the market. The same is true for the Russian oil market. The entire budget of the country, if I'm not mistaken, is equal to $46 per barrel of oil. Cheap oil is not profitable for anybody, but if no agreement can be reached with the Saudi, production will not decrease. And here's the important thing: oil production is not decreasing and consumption has fallen. And this is a serious precedent that we will soon get. Read it carefully. You can't just close an oil-well it's not possible. Those who know the subject of field development and oil production will confirm my words: it is very, very difficult to close an oil well. It is extremely problematic. As part of the reduced consumption, oil is now pumped into storages. But for another month or two, they will be filled. And what's next?...
4. My personal vision: Of course, technically, in a moment, oil can bounce upwards. But if no agreement is reached, oil will fall to $12-15 per barrel in the future.
Guys, once again, here's the main idea: if the oil falls below 28, we'll go down. And I've already told u the reasons for that above.
Once again I want to say: do not listen to pseudo-guru, which give forecasts and don't support them in any way. If you trade inside the day: look at the chart, everything is there. The best indicator is the eyes of a trader who understands the market, understands what is going on. Understanding the logic of the big player will allow you, as well as me, to be in 80-90% of positive trades.
Take care of yourself and don't get sick. love ya all.
But after looking at about a dozen oil price posts, none of them can fundamentally explain what will happen to oil and its price. I always say: u must understand the market.
I do not pretend to the truth in any way and under no circumstances, I will just try to explain my vision of what is going on. That's what I think about all this:
1. Against the background of the pandemic, the consumption of oil products is falling. There are several major consumer countries in the world, such as America and China. Everyone knows what is happening to the production market in China now. The real sector of the Chinese economy has stopped at the moment, oil consumption has already fallen by 30%.
2. All over the world, the major consumers of oil products are the transport industry. Airliners, cars and cruise liners are the leaders in oil product consumption. Now, from this point of view, look at what happened with CCL and OXY. Occidental Petroleum fell from 47$ (mid-January) to 10.2$ ! Moreover, the falling of
OXY was amplified by the news that the company stops paying dividends. Guys, this is a serious reason to think about it.
The same is true for the Carnival Cruise Lines: they fell from $50 to $11.
What does that mean for oil? Consumption is falling!
3. Let's move on. In order for the price of a product to rise again, two things are necessary: either demand must rise or supply must fall. Any first-year economics college student knows this. What we see is that saudits do not reduce oil production. Even the Yemen bombing has not brought any serious increase in the cost of oil. And that's why: when the price of oil drops to balance your budget, you simply have to produce more oil. Against this backdrop, Saudi have started selling oil below market value. They are dampening the market. The same is true for the Russian oil market. The entire budget of the country, if I'm not mistaken, is equal to $46 per barrel of oil. Cheap oil is not profitable for anybody, but if no agreement can be reached with the Saudi, production will not decrease. And here's the important thing: oil production is not decreasing and consumption has fallen. And this is a serious precedent that we will soon get. Read it carefully. You can't just close an oil-well it's not possible. Those who know the subject of field development and oil production will confirm my words: it is very, very difficult to close an oil well. It is extremely problematic. As part of the reduced consumption, oil is now pumped into storages. But for another month or two, they will be filled. And what's next?...
4. My personal vision: Of course, technically, in a moment, oil can bounce upwards. But if no agreement is reached, oil will fall to $12-15 per barrel in the future.
Guys, once again, here's the main idea: if the oil falls below 28, we'll go down. And I've already told u the reasons for that above.
Once again I want to say: do not listen to pseudo-guru, which give forecasts and don't support them in any way. If you trade inside the day: look at the chart, everything is there. The best indicator is the eyes of a trader who understands the market, understands what is going on. Understanding the logic of the big player will allow you, as well as me, to be in 80-90% of positive trades.
Take care of yourself and don't get sick. love ya all.
Trade active:
Like I said, oil is going down.
Comment:
by the way, you have the perfect opportunity now to buy usd\rur. The Russian economy is completely dependent on oil production. If oil falls, naturally, the ruble will become cheaper.
Comment:
oil will down