Crude Oil Bearish Iran’s Growing Oil Production Boosting UpTechnical Analysis:
WEEKLY BEAISH
Daily Bearish
4H Bearish
In the chart above I have highlightened the trend, the Bear and Bulltraps.
We have falling Highs/falling Lows.
A bullish pullback signs eveytime low volume and low volatility
that is the evidence of bulltraps caused by oil companies(and big speculators) The oil companies have also their own trades who push the pices fo a short time to make profits and accumultae thie losses,caused by low oiil pices. Also thier investors demand higher pofits.
I am short in Oil, aleady fom July of 2022, and sell everytime the picks of the bullish short tem trend. This means I increase my selling positions bigge and bigger.So trade with the trend. I avoid to buy oil, or go long, nor I ignore the weekly reports, as they are vey short tem and can changed the next moment, but eview the fundamentals on bigge picture.
The maket will target 39USD.
So I have mentioend 4 different scenaios and shown you their routes. 3 scenaio ae bearish with very high probability:Tend is bearish, Fundamentals ae bearish.
The weak USD has less impact here, cuz it is not the only indiacto that moves the oil market.
To become Bullish(Scenario 4(see the chat above!!!) Many things must happen:
The ask for oil must incease damatically(OPEC production stop,world war,....)Even the impact or Russia Ukraine war was fo a short time.
The fundamental trend is beaish,as no one is inteested in higher oil prices. Even producers avoid it, as higher oil ppices cuases higher costs.
Indicators:
I have my own indicators, and dont use the common indicators.
So my Bulltrap/beatap detector is confriming that.
In the chart above we see that long term and mid term Indicators are red(Beaish trend/Stong bearish trend) The shot tem Indicator is geen, meaning bulltap. If you compare the indicator values withe the chart prices, you will notice they produce best possible signals whe to get short of long.
The same is true for daily chart, or lowe time frames.
Several factors can influence the direction of oil prices:
1. Supply and Demand Dynamics: If global oil supply surpasses demand, it can put downward pressure on prices. Factors such as increased production from major oil-producing countries or a decrease in global demand due to economic slowdowns or shifts towards renewable energy sources can contribute to weaker oil prices. Conversely, supply disruptions, geopolitical tensions, or unexpected increases in global demand can drive prices higher.
2. Economic Conditions: Economic growth and global economic stability play a significant role in oil price movements. During periods of economic expansion, demand for oil tends to increase, potentially leading to higher prices. Conversely, economic downturns or recessions can reduce demand for oil and exert downward pressure on prices.
3. Geopolitical Events: Political conflicts, sanctions, or disruptions in major oil-producing regions can impact oil prices. Supply disruptions or threats to supply can lead to price increases, while the resolution of conflicts or increased production capacity can contribute to price decreases.
4. Energy Transition Efforts: As countries and industries increasingly focus on transitioning to cleaner and renewable energy sources, the demand for oil may be influenced. Efforts to reduce greenhouse gas emissions and promote renewable energy can potentially lead to lower long-term demand for oil and put downward pressure on prices. However, the pace and extent of the energy transition vary globally, making it challenging to predict its immediate impact on oil prices.
It is crucial to consider that oil price movements are affected by complex and interrelated factors, and their future direction is challenging to forecast accurately. Market dynamics and unexpected events can cause significant price volatility, making it important for investors and stakeholders to closely monitor global developments and factors influencing the oil market.
Oil tried many times to break the 2022 lows at 75,33
Fundamentally nealy eveything is speaking for weaker oil prices:
1. U.S. Oil, Gas Rigs See More Losses
The total number of total active drilling rigs in the United States fell by 5 this week, after a 6-rig increase last week, according to new data from Baker Hughes published Friday.
The total rig count fell to 675 this week—81 rigs below this time last year. The current count is 400 fewer rigs than the rig count at the beginning of 2019, prior to the pandemic.
The number of oil rigs declined by 3 this week to 537, while the number of gas rigs fell by 2, to 133. Miscellaneous rigs stayed the same at 5.
The rig count in the Permian Basin fell by 5—13 rigs below this same time last year. The rig count in the Eagle Ford fell by 1, and was down 10 rigs from this time last year.
Primary Vision’s Frac Spread Count, an estimate of the number of crews completing unfinished wells (which is cheaper than drilling new wells), fell by 12 in the week ending July 7, to 260. The frac spread count is 25 behind where it was this time last year.
Crude oil production levels in the United States slipped back to 12.3 million bpd in the week ending July 7, according to the latest weekly EIA estimates—a gain of 100,000 bpd from the beginning of the year. U.S. production levels are now up 300,000 bpd versus a year ago.
2. U.S. Shale Challenges OPEC With Record Production In 2023
The EIA has forecast total U.S. output will hit 12.61M bbl/day in the current year, eclipsing the previous record of 12.32M bbl/day.
Energy experts have generally been bearish about U.S. crude supply with many arguing it has already peaked.
Rising costs as well as limited supplies of labor and equipment were some of the problems that were hamstringing efforts by U.S. shale to increase output.
3. Weaker US Dollar is bad for Oil Prices and Oil price will fall deeper. The reasons are:
A weakening of the US dollar can have various effects on the production and prices of oil. Here are some conditions and reasons that may lead to such an outcome:
1. Currency Exchange Rates: A weaker US dollar relative to other currencies can make oil more expensive for countries that trade in dollars. This can lead to reduced demand for oil, which may result in lower production levels to match the reduced demand.
2. Import Costs: A weaker US dollar can increase the cost of importing oil for countries that rely heavily on oil imports. Higher import costs can create an incentive for these countries to reduce their oil consumption or seek alternative energy sources, which can affect oil production levels.
3. Inflation and Monetary Policy: Inflation can be influenced by the strength or weakness of a currency. When the US dollar weakens, it can lead to higher import prices, including the cost of imported oil. If inflation becomes a concern, central banks may respond by tightening monetary policy, which can have a cooling effect on the economy and potentially impact oil demand and prices.
4. Global Economic Conditions: A weakening US dollar can be a reflection of broader global economic conditions. If the global economy is experiencing a slowdown or recession, demand for oil may decrease, resulting in lower oil prices. In such a scenario, a weaker US dollar may be just one factor contributing to the overall decline in oil prices.
It's important to note that the relationship between the US dollar, inflation, and oil prices is complex and influenced by multiple factors. Changes in oil prices can be influenced by geopolitical events, supply and demand dynamics, production decisions by major oil-producing countries, and other market forces. The interplay between currency exchange rates, inflation, and oil prices can vary depending on the specific circumstances and the broader global economic environment.
The news states that the total number of active drilling rigs in the United States has decreased by 5, following a previous increase of 6 rigs. Here are some potential interpretations and examples of the impact of this news:
4. Production and Investment: The decline in the number of active drilling rigs suggests a slowdown in oil and gas production activity in the United States. Fewer rigs imply that energy companies are scaling back their exploration and drilling operations, which can lead to a reduction in production levels. This decline may indicate a cautious approach by companies in response to various factors such as lower oil prices, reduced demand, or economic uncertainties.
5. Employment and Economic Effects: The decrease in active rigs can have ripple effects on the economy. As drilling activity slows down, it may result in job losses in the oil and gas sector, as well as related industries that support drilling operations. Communities heavily reliant on the energy industry may experience reduced economic activity and lower income levels.
6. Regional Impact: The news also provides specific information about the decline in the rig count in certain regions. For example, the Permian Basin saw a decrease of 5 rigs compared to the same period last year, indicating a potential slowdown in oil and gas exploration in that area. Similarly, the Eagle Ford region experienced a decline of 1 rig, which may suggest reduced drilling activity in that particular location. These regional variations can have localized economic consequences, affecting employment, local businesses, and government revenues.
7. Market Implications: The decrease in the rig count can influence oil and gas prices in the market. If the reduction in drilling activity leads to lower production levels, it could contribute to a decrease in the global oil and gas supply. Depending on the balance of supply and demand, this may put upward pressure on prices.
Overall, the decrease in the number of active drilling rigs suggests a potential slowdown in the US oil and gas industry. It can have implications for production levels, employment, regional economies, and market dynamics. However, it's important to consider that rig count fluctuations are influenced by various factors, and it is advisable to analyze longer-term trends and broader industry developments to gain a comprehensive understanding of the situation.
Based on the provided news, here are some interpretations and examples of the impact:
8. Frac Spread Count: The decrease in the Frac Spread Count by 12 suggests a decline in the number of crews completing unfinished wells. This indicates a potential slowdown in the completion of wells, which could be attributed to various factors such as reduced investment, operational challenges, or market conditions. Completing unfinished wells is generally cheaper than drilling new wells, so a decrease in this count may indicate cost-cutting measures in response to economic factors.
9. Crude Oil Production Levels: The report indicates that crude oil production levels in the United States slipped to 12.3 million barrels per day (bpd) in the week ending July 7. This slight decline in production may be influenced by factors such as maintenance activities, operational issues, or natural production declines. However, it's worth noting that compared to the beginning of the year, there has been a gain of 100,000 bpd, and production levels are up by 300,000 bpd compared to a year ago. These figures indicate a gradual increase in production over time.
10. Oil Prices: The news provides information about the current trading prices of WTI and Brent benchmarks. WTI benchmark was trading down $1.27 (-1.65%) at $75.62 per barrel, while the Brent benchmark was trading down $1.26 (-1.55%) at $80.10 per barrel. Despite the daily decline, both benchmarks have seen an increase compared to the previous week, with WTI up nearly $3 per barrel and Brent up $2.50 per barrel. The fluctuation in oil prices can be influenced by various factors, including global supply and demand dynamics, geopolitical events, and market sentiment.
In summary, the news suggests a potential slowdown in the completion of unfinished wells, a slight decline in crude oil production levels, and fluctuations in oil prices. These factors can be influenced by a range of economic, operational, and market-related considerations. It's important to monitor long-term trends and analyze broader industry developments to gain a comprehensive understanding of the situation.
Clean Energy Funds: The US government has allocated $20 billion from the EPA's Greenhouse Gas Reduction Fund to facilitate clean energy projects. The funds will be awarded through two competitions: the National Clean Investment Fund (NCIF) competition and the Clean Communities Investment Accelerator (CCIA). These initiatives aim to support clean technology projects, promote financing options, and focus on low-income and disadvantaged communities. The move is part of the government's efforts to expand clean energy investment and reduce pollution nationwide.
11. Subsidy War: The news mentions a "subsidy war" between European countries and the United States, as the latter is becoming increasingly attractive to companies due to its generous planned subsidies. France has accused the United States of unfair competition and has introduced its own act, the Net Zero Industry Act, in an attempt to compete.
12. Iraq's Oil Production: Iraq's parliamentary oil and gas committee plans to increase the country's oil production to over five million barrels per day (bpd), with the potential to reach 13 million bpd. Iraq is considered one of the largest underdeveloped oil frontiers globally, with substantial proven reserves and the potential for even more undiscovered resources. However, endemic corruption has hindered growth in the oil industry, impacting Iraq's ability to maximize its oil production potential.
13. Corruption Challenges: Iraq's oil and gas industry has been plagued by endemic corruption, resulting in significant financial losses for the country. This corruption has deterred Western companies from investing heavily in Iraq, despite its vast oil reserves. The lack of infrastructure investments and the mismanagement of compensation payments have contributed to lower production levels than what could be achieved with the available reserves. Corruption in Iraq's oil sector has been a recurring concern highlighted by Transparency International and has hindered effective state-building and service delivery.
14. Western Companies' Withdrawal: Major Western oil companies, including BP, Shell, and ExxonMobil, have withdrawn or planned to reduce their involvement in Iraq's oil fields due to risks associated with corruption, security concerns, and inadequate legal structures. These companies have been cautious about operating in Iraq, as political changes and uncertainties can impact their operations and pose risks to their business interests.
Overall, the news highlights the US government's commitment to clean energy investment, the challenges faced by Iraq in realizing its oil production potential due to corruption, and the withdrawal of Western companies from Iraq's oil sector. The underlying theme in both stories is the need for transparent governance, sound legal frameworks, and anti-corruption measures to create an environment conducive to sustainable energy development and attract long-term investments.
4,Potential Impact of Iran's Oil Production: Iran's monthly oil production is gradually increasing, posing a challenge to OPEC's control over the oil market. Although talks of a new nuclear deal leading to an influx of Iranian oil have created market instability, such a deal has not materialized. However, if sanctions are lifted and Iran's production potential is fully realized, it could conflict with OPEC's efforts to regulate the market and maintain high oil prices. The uncertainty surrounding Iran's oil production adds a mysterious element to the oil markets.
1. OPEC's Concerns: The possibility of Iran's oil returning to the market raises concerns for both traders and OPEC. OPEC has exempted Iran from production cuts for years due to sanctions. Iran's oil production figures, reported monthly by OPEC, may not be entirely accurate. The potential reentry of Iranian oil into the market could disrupt OPEC's influence and market control.
Rising Investment in Offshore Exploration: Despite a focus on disciplined investment, major oil companies are increasing their investment in offshore exploration. They anticipate higher returns from large offshore projects compared to low-carbon energy investments. This shift in strategy is driven by the expectation of increased profitability and the need to ensure a secure supply of oil and gas.
1. Offshore Rig Demand: Deepwater rig utilization is on the rise, driving up rates as companies ramp up exploration activities. Demand for offshore rigs is expected to increase by another 20% from 2024-2025. The "Golden Triangle" regions of Latin America, North America, and Africa, along with parts of the Mediterranean, are expected to account for a significant portion of global floating rig demand.
Clean Energy Funds: The US government has allocated $20 billion from the EPA's Greenhouse Gas Reduction Fund to facilitate clean energy projects. The funds will be awarded through two competitions: the National Clean Investment Fund (NCIF) competition and the Clean Communities Investment Accelerator (CCIA). These initiatives aim to support clean technology projects, promote financing options, and focus on low-income and disadvantaged communities. The move is part of the government's efforts to expand clean energy investment and reduce pollution nationwide.
1. Subsidy War: The news mentions a "subsidy war" between European countries and the United States, as the latter is becoming increasingly attractive to companies due to its generous planned subsidies. France has accused the United States of unfair competition and has introduced its own act, the Net Zero Industry Act, in an attempt to compete.
2. Iraq's Oil Production: Iraq's parliamentary oil and gas committee plans to increase the country's oil production to over five million barrels per day (bpd), with the potential to reach 13 million bpd. Iraq is considered one of the largest underdeveloped oil frontiers globally, with substantial proven reserves and the potential for even more undiscovered resources. However, endemic corruption has hindered growth in the oil industry, impacting Iraq's ability to maximize its oil production potential.
3. Corruption Challenges: Iraq's oil and gas industry has been plagued by endemic corruption, resulting in significant financial losses for the country. This corruption has deterred Western companies from investing heavily in Iraq, despite its vast oil reserves. The lack of infrastructure investments and the mismanagement of compensation payments have contributed to lower production levels than what could be achieved with the available reserves. Corruption in Iraq's oil sector has been a recurring concern highlighted by Transparency International and has hindered effective state-building and service delivery.
4. Western Companies' Withdrawal: Major Western oil companies, including BP, Shell, and ExxonMobil, have withdrawn or planned to reduce their involvement in Iraq's oil fields due to risks associated with corruption, security concerns, and inadequate legal structures. These companies have been cautious about operating in Iraq, as political changes and uncertainties can impact their operations and pose risks to their business interests.
Overall, the news highlights the US government's commitment to clean energy investment, the challenges faced by Iraq in realizing its oil production potential due to corruption, and the withdrawal of Western companies from Iraq's oil sector. The underlying theme in both stories is the need for transparent governance, sound legal frameworks, and anti-corruption measures to create an environment conducive to sustainable energy development and attract long-term investments.
