Long term OIL

[botany]

Looks like crude prices are falling further. Opec has refused further cuts and the supply glut looks like it is here to stay.
Other oil producing countries OPEC are in no mood to limit production.

http://www.cnbc.com/2017/05/03/oil-eases-near-weakest-since-late-march-on-small-u-s-stocks-decline.html

[deisik]

Looks like crude prices are falling further. Opec has refused further cuts and the supply glut looks like it is here to stay.
Other oil producing countries OPEC are in no mood to limit production.

http://www.cnbc.com/2017/05/03/oil-eases-near-weakest-since-late-march-on-small-u-s-stocks-decline.html

We should all expect the fall to continue

Unless the US dollar itself suffers severe depreciation, the crude oil prices are set to slowly decline in the coming years on average. The American frackers kinda seem to have adopted to low oil prices. There should be no doubt that the fracking technology will continue to evolve further, thereby making the oil extraction using this method more profitable at current prices, but that will drive prices lower over the long term. OPEC and their gatherings become more and more irrelevant

[botany]

An increase in US shale production has undermined the efforts of OPEC to cut production.
Looks like OPEC doesn't have the ability to move the market now. 

https://www.bloomberg.com/news/articles/2017-05-19/u-s-shale-roars-back-at-opec

[Xester]

Looks like crude prices are falling further. Opec has refused further cuts and the supply glut looks like it is here to stay.
Other oil producing countries OPEC are in no mood to limit production.

http://www.cnbc.com/2017/05/03/oil-eases-near-weakest-since-late-march-on-small-u-s-stocks-decline.html

We should all expect the fall to continue

Unless the US dollar itself suffers severe depreciation, the crude oil prices are set to slowly decline in the coming years on average. The American frackers kinda seem to have adopted to low oil prices. There should be no doubt that the fracking technology will continue to evolve further, thereby making the oil extraction using this method more profitable at current prices, but that will drive prices lower over the long term. OPEC and their gatherings become more and more irrelevant

The fall in the value of oil is just temporary since the oil companies who mostly are owned or has a big influence on the government officials in different countries has a way to make the price of oil increase again. First is hoarding and the second is fake war. They will just simply hoard the oil and with the limited supply in the market the price begins to rise up and one way to cut off the supply aside from hoarding is to create fake wars which will result to the increase in oils value.

[grermezter]

An increase in US shale production has undermined the efforts of OPEC to cut production.
Looks like OPEC doesn't have the ability to move the market now. 

https://www.bloomberg.com/news/articles/2017-05-19/u-s-shale-roars-back-at-opec

It going to be difficult for opec to control the market as they once used to do. The economic outlook of countries who mainly depend on oil is very bleak and will definitely take a turn for the worse if technological advancement is made in the solar energy field.

[jaysabi]

Saudi Arabia is least likely and least able to cheat on their agreed production numbers, as the largest member of OPEC it becomes blatantly obvious when they are over producing oil.     The most likely cheats in any scheme will be the smallest more remote producers who may give oil to energy users in their own country for political reasons to lower electricity cost and win voter support or similar schemes.   One of the more obvious countries that happened was Venezuela where oil is given very cheaply to the people, many 'illegal' exports occur in that cheap fuel to neighbouring countries

There is no shortage of oil resource, its a question of cost to extract and ease of access.  Iran has problems requiring engineering resource which leads to higher cost for them, mainly they lack investment and its sometimes true of other large countries like Russia.

The other end of the chain is demand which remains lower then it should be for years, world growth should be greater

How do you figure it's not easy to cheat? There are no other reporting measures other than what countries choose to disclose, and no oversight as to what is produced, consumed, or sold to market. If Saudi Arabia noticeably selling twice what report, it would be obvious perhaps, but if they agree to a 1 million bpd cut and then end up not doing half of that, it wouldn't be clear it was them, and may not that oil ever disappeared, especially with all the other OPEC nations lying inside a black box as well.

[jaysabi]

I tend to disagree that they couldn't be flooding the market

Basically, I have no access to the data how much oil they have in their reserves left, and I guess no one here does, if anyone at all (apart from the KSA royal family, of course). These were just rumors, after all (though they have been circulating for quite some time now). Other than that, there are quite a few things in the world which are totally counterintuitive at first glance (close to incomprehensible) while at some deeper level they are quite logical and rational. For example, Saudi Arabia might be flooding the market with cheap oil like mad even if their oil reserves were near depletion because it would still be more economically justified. We could have even lower oil prices when Iran started to produce crude oil at their full capacity in a few years after upgrading their oil extracting infrastructure

If you're close to depletion though, what short term benefit are you realizing by flooding the market now and realizing less revenue in the midterm? Saudi Arabia is not a diversified economy, and if they're close to depletion they are setting themselves up for great economical and political instability in the near future. It's possible as you say, but I wouldn't bet on it

I wouldn't bet on that either

But they might know something which we don't. For example, it would make sense to sell oil at any price if they desperately needed money, even if their oil reserves were close to depletion. After all, oil is still almost free for them (the cost of extraction is something like a few dollars per barrel). Yes, they had something like 600B dollars in wealth funds, but these funds are mostly in US treasuries (read they are controlled by the US government), so they can't simply convert them to dollars and take the proceeds. By the way, does anyone know how much they have in their funds by now?

They have several funds that do different things, but the Public Investment Fund is believed to be the largest and have over $183 billion in assets. But contrary to your assertion, 90% of that is invested inside state-owned Saudi companies, not US Treasuries. And it has started to shift to foreign investments recently, notching a $4.5 investment in Uber and agreeing to a deal with Softbank for $45 billion. this fund will probably be the beneficiary of the Aramco IPO (another $100 billion), but bankers believe the fund could balloon to $500 billion even before that, so pretty close to the $600 number you said. Although they may have that spread across all the other funds, this one is just the most prominent. (https://www.ft.com/content/bd3d7c34-b877-11e6-961e-a1acd97f622d). Saudis are also using one of their funds (not sure if this one) to launch a domestic arms industry to reduce dependence on the US.

[deisik]

Looks like crude prices are falling further. Opec has refused further cuts and the supply glut looks like it is here to stay.
Other oil producing countries OPEC are in no mood to limit production.

http://www.cnbc.com/2017/05/03/oil-eases-near-weakest-since-late-march-on-small-u-s-stocks-decline.html

We should all expect the fall to continue

Unless the US dollar itself suffers severe depreciation, the crude oil prices are set to slowly decline in the coming years on average. The American frackers kinda seem to have adopted to low oil prices. There should be no doubt that the fracking technology will continue to evolve further, thereby making the oil extraction using this method more profitable at current prices, but that will drive prices lower over the long term. OPEC and their gatherings become more and more irrelevant

The fall in the value of oil is just temporary since the oil companies who mostly are owned or has a big influence on the government officials in different countries has a way to make the price of oil increase again. First is hoarding and the second is fake war. They will just simply hoard the oil and with the limited supply in the market the price begins to rise up and one way to cut off the supply aside from hoarding is to create fake wars which will result to the increase in oils value

This is ultimately irrelevant

As it has been explained many times in this thread. The largest oil consumer (i.e. the US) is more and more relying on their own production of crude oil. So hoarding oil would be an exercise in both futility and stupidity. This is what OPEC is basically trying to do right now. And does it help them much? If they still agree to a cut (which is unlikely), the ones who will profit most will be US frackers since they will have time to make their production more efficient and thus more competitive during this cut. Saudi Arabia already tried to suffocate them with low prices. Now, according to your logic, they are going to drown them in profits

[botany]

The decision of the US (actually Donald Trump) to withdraw from the climate deal could lead to more drilling in the US.
Expect the price of oil to fall further.

http://www.cnbc.com/2017/06/01/oil-prices-slide-nearly-1-percent-on-persistent-glut-concerns.html

[omonuyak]

How does one invest in oil?

You got the wiki link, so read it, but a decent way to invest is buying stock in oil companies especially if they pay good dividends.

OP, let's hope for all our sakes that oil doesn't go as high as $180 anytime soon.  Do you remember how high gas prices were back when it was at $150?  That makes everything else expensive, not just gas.  God bless the oil shorts.

I am from oil producing nation and my country completely depend on oil for exportation. We are praying for recovery in oil prices that is currently being sold around $50 so we can come out of recession. If oil raised to $150 good for my nation and if it grows more than $180 better for us.

[matuson]

Of course, take the self-reported "cuts" with a grain of salt. What they report they do and what they actually do is not likely the same thing, especially with so much incentive to cheat and no independent body to verify anything they say. Saudi Arabia has publicly acknowledged in the past that everybody in OPEC lies about production numbers.

I don't know much about the other nations, but this time the Saudis were quite determined to reduce the global supply of crude oil. They took the initiative, and brought the non-OPEC nations such as Russia to the negotiation table. It is unlikely that they will cheat this time around.

Iran did not want to cut oil production when Obama promised to lift the sanctions. Trump is stopped. He always plays against the interests of America, but that doesn't help either Arabs or Russians. The higher the level of the oil price, the more attractiveness is alternative energy. The price of oil is doomed to fall.

[CriptoSven]

Of course, take the self-reported "cuts" with a grain of salt. What they report they do and what they actually do is not likely the same thing, especially with so much incentive to cheat and no independent body to verify anything they say. Saudi Arabia has publicly acknowledged in the past that everybody in OPEC lies about production numbers.

I don't know much about the other nations, but this time the Saudis were quite determined to reduce the global supply of crude oil. They took the initiative, and brought the non-OPEC nations such as Russia to the negotiation table. It is unlikely that they will cheat this time around.

Iran did not want to cut oil production when Obama promised to lift the sanctions. Trump is stopped. He always plays against the interests of America, but that doesn't help either Arabs or Russians. The higher the level of the oil price, the more attractiveness is alternative energy. The price of oil is doomed to fall.

These imaginary oil tycoons will very strongly resist the development of alternative types of energy. Only individual production of countries and local development will give impetus to new technologies in this direction.

[radjie]

By way of investing in oil in my opinion it will take a long time so that we can enjoy the results are not quickly necessary with patience.
It promises to invest oil because the oil is now increasingly scarce and it can affect the value of the price.

[richardsNY]

It promises to invest oil because the oil is now increasingly scarce and it can affect the value of the price.

Oil isn't really that scarce. Especially when you take into consideration that the major oil producing countries aren't pumping on full power. Reason for that is because there simply isn't enough demand to eat through the oil supply, and thus it would negatively impact the market. Other than that, I seriously don't understand why certain people still look into oil as investment, while Bitcoin offers faaaar greater returns....

[ppc.pt]

I'm not, but the only position I would open on oil would be a short position.

No need for oil with today's technology, even less with tomorrows

[botany]

Increasing tensions in the Middle East between Saudi Arabia and Qatar don't seem to have affected oil prices. Usually when tension increases in the Middle East, so does the oil price. Right now, the oil price seems to be pretty flat.

[Netnox]

Increasing tensions in the Middle East between Saudi Arabia and Qatar don't seem to have affected oil prices. Usually when tension increases in the Middle East, so does the oil price. Right now, the oil price seems to be pretty flat.

The Qatar scandal may affect the natural gas prices, but it will have zero impact on the crude prices. Qatar is a major exporter of LNG, and the spot LNG prices rose after the Saudis threatened to block the Qatari gas tankers. But Qatar does not export any crude oil, unlike the other GCC nations such as Saudi Arabia, Kuwait and the United Arab Emirates.

[Barbarian]

I'm not, but the only position I would open on oil would be a short position.

No need for oil with today's technology, even less with tomorrows

Lets not get cocky, we need oil is just that technology has progressed to the point we can reach sources that were not possible before and with more efficient technology we have been able to diminish the hunger for oil somewhat.

[deisik]

Increasing tensions in the Middle East between Saudi Arabia and Qatar don't seem to have affected oil prices. Usually when tension increases in the Middle East, so does the oil price. Right now, the oil price seems to be pretty flat.

The Qatar scandal may affect the natural gas prices, but it will have zero impact on the crude prices. Qatar is a major exporter of LNG, and the spot LNG prices rose after the Saudis threatened to block the Qatari gas tankers. But Qatar does not export any crude oil, unlike the other GCC nations such as Saudi Arabia, Kuwait and the United Arab Emirates

Things might not be that simple

While it is certainly true that in the short term natural gas prices are not going to affect crude oil in any meaningful degree, but the relationship may still exist at higher levels than just the possibility of direct substitution (or lack thereof). Further, it may be extremely difficult (read prohibitively expensive) but still not completely impossible to make gasoline from natural gas (the major product of oil processing). After all, Germans and South Africans did manage to convert coal to liquid fuel somehow, so if natural gas becomes as cheap as air, it will likely affect crude oil prices as well

[STT]

I'm not, but the only position I would open on oil would be a short position.

No need for oil with today's technology, even less with tomorrows

Oil is more useful then dollars, short would say otherwise and with price only 40 or so thats a low point to be shorting from.   The big problem is that to short oil is to go long dollars, of the two trades that would be the more overplayed.   Dollars are far more over valued then oil is.

I agree theres alot of oil but theres also a cost to extracting then transporting it.   Quite alot of supply competing with Saudi Arabia is not cheap, they'll struggle to break even at this point.   So shorting presumes constant supply when we know that will not be true, quite alot of supply would come offline.   So its not linear, dangerous ground to short imo