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Page added on April 3, 2017
Oil could turn south again to the low $40s,
Several factors are conspiring to keep a lid on oil — and could even send prices sharply lower, analyst John Kilduff told CNBC on Monday.
A recent rally — nearly 5.5 percent for West Texas Intermediate crude — has U.S. shale producers coming back online, said Kilduff, a founding partner of energy and metals specialist Again Capital. WTI, above $50 per barrel in early trading Monday, could turn south again to the low $40s later this year, he warned.
Kilduff wonders whether more American supply may test the resolve of Saudi Arabia‘s commitment to the output-cut agreement among OPEC and other international players.
“It’s kind of a one-two punch,” he said. “[In April], we’re going to see U.S. domestic production from the shale players rise by 100,000 barrels. That’s going to hurt.”
“Saudis are not going to want to lose market share,” he argued.
Another dynamic is the Trump administration’s support of key proposed pipelines that were out of favor under former President Barack Obama, Kilduff said.
Building the Dakota Access and Keystone XL pipelines should make transporting U.S. oil cheaper, which could give margins a boost as American crude competes on the world market, he added.
17 Comments on "Oil could turn south again to the low $40s,"
Davy on Mon, 3rd Apr 2017 5:53 pm
Hard data is pointing to a global decline in economic activity. This does not translate directly into an oil demand drop but it plays a role in a decline in oil demand growth.
BobInget on Mon, 3rd Apr 2017 6:33 pm
Davy, Clearly 27 million unemployed political, economic and climate refugees combined with increased military outlays are diminishing growth
in Europe.
Since most of our economic attention is focused on Europe and Mid East Wars, this obscures potent Asian including Australian growth.
IMO, diminished consumption (if any) has been keeping pace with failing supply.
Midnight Oil on Mon, 3rd Apr 2017 6:48 pm
BW Hill right Again!
Ain’t that so marmico?
Bensen, Burton, Bozo and Buster….
Boat on Mon, 3rd Apr 2017 9:15 pm
Bob,
What diminished demand. Do you follow oil?
Boat on Mon, 3rd Apr 2017 9:22 pm
Midnight oil sniffer,
Oil was down to $27 a few months and now $50. Now at the same time world demand had been strong or at least average. That is not supposed to happen says short. Demand should be going down.
Midnight Oil on Mon, 3rd Apr 2017 9:33 pm
Boat, great you confirmed my post, now you can scratch…Bernstein, Bennie, Beatrice and Betty, right marmico?
Boat on Mon, 3rd Apr 2017 11:10 pm
Davy,
You have been predicting economic decline since 2013. Keep at it and you will be rewarded with a recession.
GregT on Tue, 4th Apr 2017 12:47 am
Boat,
The “Global Financial Crisis”, AKA “The Great Recession”, began ~ 2007. The world has still not recovered from it, and never will.
GregT on Tue, 4th Apr 2017 2:27 am
Boat,
“Now at the same time world demand had been strong or at least average. That is not supposed to happen says short. Demand should be going down.”
Again, you display no comprehension of the exponential function. Not surprising given your inability to grasp 4th grade arithmetic.
Clueless.
Boat on Tue, 4th Apr 2017 3:17 am
greggiet,
Yea, like the expontial function of efficiency and tech. That’s why vast amounts of human growth are supported with less oil per capita. At the same time these same humans live longer. Go back to 1950 till now. 1.3 Mbpd is the average. Oil Growth average hasent changed much. Idiot
GregT on Tue, 4th Apr 2017 3:28 am
You keep spewing the same nonsense Boat, despite all evidence to the contrary. Does it somehow make you feel better lto live in a complete state of denial, or do you have some other motivating factor?
Antius on Tue, 4th Apr 2017 4:24 am
Changing demographics in consuming countries. Old people tend to consume less and therefore have lower per capita oil demand.
Davy on Tue, 4th Apr 2017 4:55 am
“Since most of our economic attention is focused on Europe and Mid East Wars, this obscures potent Asian including Australian growth.” Geeze, bob, this is the problem with people of agenda. You can say something and it blows right past them. Reread my simple and short comment bob. I said the decline is in global economic activity. This means a decline in the growth of global economic activity. We are slowing down. Do you disagree with that? I did not say we were in decline without growth. It is likely we are in an undulating recession but this is an abstract of accounting for bad debt and malinvestment that will strike us down in the future. Stagflation is part of this with deflationary economic activity and rising prices.
Bob, I know you want to believe Asia is here to save us economically but it isn’t. You talk the same way about your magical tech. The highest instabilities are hidden in China’s smoke and mirror Ponzi economy that operates on bubbles. It inflates one bubble only to deflate it and inflate new ones. Zombie companies that are created in this process are allowed to parasitically suck life from the healthy ones all in the name of social stability but more so greed.
The minimum operating levels of globalism is anyone’s guess but one thing is virtually assured when global growth declines below a certain systematic point a break of some kind will occur. This includes declining growth rate of growth as a dangerous threshold. The global system is now that sensitive and brittle that the mere slowing of growth can kill it. It’s the minimums that finally get you. This is the nature of systems with thresholds, bifurcation zones, and resulting landings. Our growth based system that must grow is stagnating and that cannot end well. It is a Ponzi arrangement.
The Madoff Ponzi end was not that it was exposed. Just like we know the global economy is not healthy. Madoff was exposed for years and nothing happened. What killed the Madoff Ponzi was the 08 market route. A Ponzi cannot have negative returns because there is little to no principal its returns are based on new money. When too many participants want out it collapses. In the global economies case it is new debt. On a side note what was brilliant about Madoff and why he survived so long is his cut was so small and the market was growing. He arranged a system of feeders who actually were making the big returns. He was just the Ponzi administrator. These big feeder companies were aware of the inconsistencies but ignored them because the returns were good and steady. This is what is going on with us the global people. We are still ok in the status quo. What happens when the status quo goes really bad?
Davy on Tue, 4th Apr 2017 6:45 am
Bob, is this that amazing makatiland China growth your cited?
“China Starts 2017 With Highest Number Of Corporate Defaults In History”
http://tinyurl.com/mwa939q
“Back in October 2015, roughly around the bottom of the recent commodity cycle, we reported a stunning statistic: more than half of Chinese companies did not generate enough cash flow to even cover the interest on their cash flow, and as we concluded “it is safe to assume that up to two-third of Chinese commodity companies are now at imminent danger of default, as they can’t even generate the cash to pay down the interest on their debt, let alone fund repayments.”
“While commodity prices have staged a powerful bounce over the past 18 months, and despite the government’s powerful drive to avoid major defaults over concerns about resulting mass unemployment, the inevitable default wave has finally arrived, and as Bloomberg reports overnight, “China’s deleveraging push has racked up the most defaults on corporate bonds ever for a first quarter, and the identity of the debtors is pretty revealing.” Seven companies have defaulted on a total of nine bonds onshore so far in 2017, versus 29 for all of last year, according to data compiled by Bloomberg. In a sign of the struggles facing China’s old economic model, most of them depend on heavy industry and construction. While it’s still far from a crisis point, the defaults shows how policy makers’ efforts to reduce the liquidity that had propelled the bond market until late last year is exacting casualties.”
Davy on Tue, 4th Apr 2017 6:53 am
Here some more amazing China growth bob:
“Hot Money”: Hong Kong Businessman Pays $2.5 Million For 18-Year-Old Romanian Model’s Virginity”
http://tinyurl.com/lhxexqy
There is so much excess liquidity in China that an 18-year-old Romanian model has agreed to sell her virginity to a “very friendly” – and generous – Hong Kong businessman for the “life-changing” sum of $2.45 million (€ 2.3 million).
Yummy:
http://tinyurl.com/khqlm23
makati1 on Tue, 4th Apr 2017 7:44 am
Davy, the U$ is dying. The MSM cover up is all that is keeping the economy sputtering along and the lies are all that are keeping the civil war from getting hot. I could show you all the areas that are collapsing in the U$, but you would ignore them. Soon they will be so blatant that even you will see them.
China will be there long after the U$ ceases to exist. It has survived for 5,000 years vs the U$ few hundred. That doesn’t happen by accident.
Even the Ps history is over five thousand years. The first humans were here 55,000 years before they were in North America. Manila dates back to 900AD. I doubt that the collapse of the U$ is going to wipe out the Ps. But, dream on. Your little farm in the Ozarks may survive. I know mine will. ^_^
Davy on Tue, 4th Apr 2017 8:09 am
Yadda makati, you show US collapse daily or don’t you even know what you are doing. These things happen to delllusional 75 year old men. It is called early onset dementia. I imagine you are more like 80 they way you talk about fantasy farms and fake Asian Tigers surely you lie about your real age. lol, I love unmasking hypocrites. .