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November 2016

Oil Going To $70 By July (Video)

November 30, 2016 by EconMatters   Comments (0)

By EconMatters


We discuss where Oil is headed over the next six months and how producers might want to buy back their hedges before they start losing money big time above $54 a barrel. Producers could lose big on all those hedges they thought were their friend in the oil market!

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This Short Squeeze in the Oil Market Could Go On For Days! (Video)

November 30, 2016 by EconMatters   Comments (0)

By EconMatters


OPEC did such a good job of putting many oil traders on the wrong side of the market for the last month, this short squeeze could go for a while. There is a lot of money positioned in the oil market for the deal not getting done!

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OPEC Is Fighting Over 200,000 Barrels Per Day! (Video)

November 29, 2016 by EconMatters   Comments (0)

By EconMatters


So let me get this straight a $1 difference in the oil price means an additional 1 Billion extra to Iran and Iraq`s annual oil revenue and they are fighting over a measly 200,000 barrels per day oil production delta. OPEC has to be the most incompetent organization on the face of the earth! Split the freaking difference people, and move on!!

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Saudi Arabia Should Threaten Massive Production Cut (Video)

November 29, 2016 by EconMatters   Comments (0)

By EconMatters


We discuss the current OPEC power struggle in this video. Saudi Arabia is losing the power struggle within OPEC. Saudi Arabia has tried threatening upping production to motivate Iran and Iraq to agree to a Production Cut Framework Deal, but this hasn`t worked.

Maybe if they switched strategies and threatened a massive production cut of their own, so big that the oil market would need Saudi Oil bad, and then enforce favorable contracts with customers, i.e., reducing Russian and Iranian Market Share through contract terms, and this reinstates Saudi Arabia as the Power Player in the Oil Markets and makes them again the swing producer.

They need to reverse the current psychology in the market with their oil peers in OPEC. They can lay the ultimatum out on the table and say to Iran, Iraq and Russia that there is another way they can force production cuts and gain market share through withholding Saudi Oil from customers as they are the only country capable of withdrawing that sizable amount of oil production.

The irony is that it would work because Saudi Arabia would get the same amount of revenue from half the production as oil prices would double in price in two weeks, and as oil prices keep rising Saudi is again the swing producer in the oil markets.

Saudi Arabia needs to reverse the psychology of the oil market right now which is in a never ending negative feedback loop. Just without 5 million barrels per day of oil production, and oil is $85 a barrel in two weeks and climbing and all the sudden customers will cut any deal with Saudi Arabia for the other 4 to 5 Million Barrels of spare capacity, i.e. agree to buy less Iranian and Russian Oil on the margin.

They need to be willing to do it, but the threat alone would move negotiations with Iran and Russia. Furthermore, Saudi Arabia is the only producer who has the means to cut this kind of production. It is a counter intuitive strategy but it would work, it all the sudden swings the power card back in Saudi Arabia`s direction as the dominant player in the oil market.

Saudi Arabia and OPEC cannot continue to give away their resources below the level needed to meet their budgetary needs, this is just a recipe for disaster, and threatens the stability of their countries and governments as going concerns. They need to change the feedback loop, and make it a positive reinforcing feedback loop raising the value of their main source of country revenue in terms of the oil commodity. This means less oil production, and not more oil production.

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38 or 58 - You Choose OPEC (Video)

November 28, 2016 by EconMatters   Comments (0)

By EconMatters


In this video we discuss the latest posturing ahead of the OPEC Production Cut Decision, and the associated consequences for the price of oil based upon another failure out of OPEC. Your right Saudi Arabia you don`t have to cut, see you at $38 a barrel!

This is probably the last straw for OPEC credibility going forward. If they fail to get a Deal done after all of this talking and negotiating, then OPEC should just dissolve their little Oil Cartel, because it serves no real purpose and they have members who cannot collectively work together to solve market issues.

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The Gold Trade Examined (Video)

November 27, 2016 by EconMatters   Comments (0)

By EconMatters


We discuss the Gold Trade in this video, as it is actually a part of a much bigger trade that is currently taking place across multiple asset classes in the markets. At what Price Point do Physical Buyers come into the Gold Market?

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OPEC Can Make Those Shale Hedges Lose Money at 55 Dollars Per Barrel (Video)

November 27, 2016 by EconMatters   Comments (0)

By EconMatters


We discuss the idea that nobody else has thought of regarding how OPEC will actually hurt the Shale Industry by making all those financial hedges punitive, i.e., lose money above $52 a barrel on the front month with corresponding forward curve hedges all losing money for Shale Producers.

Shale Producers all put on "Financial Hedges" which start turning negative once the oil market busts out to new highs. So they will make money on their production sales, but lose money on their financial hedges as these forward hedges are strictly financial in nature. Thus, OPEC Can Stick It to the Shale Industry by raising prices above expectations!

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Oil Shorts Love OPEC Dysfunction (Video)

November 25, 2016 by EconMatters   Comments (0)

By EconMatters


We discuss the latest in  the OPEC Saga to arrive at an agreement to tighten the oil market and raise oil prices to bring in long term CAP Ex Investment back into the Industry which has seen three straight years of annual declines and has long term ramifications for the oil market. The Speculators have taken 500 Billion to a Trillion Dollars from OPEC over last 3 years!

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It`s Actually in Russia and Iran`s Self Interests to Cut Production (Video)

November 24, 2016 by EconMatters   Comments (0)

By EconMatters


We discuss game theory and the idea that cooperative game theory suggests here that both Iran and Russia would be better served to cut oil production as opposed to merely freezing oil production. We could easily be talking about losing an extra 20 to 50 plus Billion in annual Oil Revenues for these two countries.

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How To Play Equities After The Trump Rally (Video)

November 23, 2016 by EconMatters   Comments (0)

By EconMatters


We delve into Equities, Bonds, Commodities and The US Dollar in this video with what could be a likely catalyst for the next risk on move higher in risk based assets. A lot more than higher Oil Prices is riding on the OPEC Deal for a continuation of this Risk On Rally.

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