There are so many fundamentals I exhausted on yesterday's research and analysis of the underlying factors so please have a read through those. My fundamental long bias now results from simple supply side economics. In conjunction with this, many to nearly all over-leveraged mid and large cap oil companies and their contracts (strategic partnerships/contractors) have fallen and will be consolidated. This will lower multiples, and force a much clearer focus to bottom line effenciens and choke points to very low acceptance thresholds. As oil tanks become filled to capacity, Oil cuts will reduce and inflation will raise once COVID ends and the world enjoys 10$ round trip flights and 0.96$/ gallon gas for their summer vacation with their Trump check. Things will get better economically, and Oil is undervalued it's sick.
The Alliance between Opec and Russia may cease headlines for now, allowing algo's to let go and fundamentals take over in a natural market again.
OPEC will cut 9.7 million bbl's per ay, just below the proposed $10 million. This is a lot of oil and is capable of suppressed asks to sustain bullish rallies. Futures now showing 30$ a bbl.. thus, I'm now long oil. Big time.
Stopposses will be updated when I enter long. All oil long entries closed..
I appreciate your posts! You stay killing the charts. This one was a toughie. lol
TayFx
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@sasukejackson, thanks, when risking 2%, no trade can hurt us =)
Spotifly
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The OPEC lowered production with about 10/13%, which is nothing compared to the drop in demand 40/50%.
That's why prices dropped even lower again towards the 20/barrel.
Much lower as 20/barrel is very unlikely because that's about the breakeven point of big oil refineries.
Buying crude cheaper would be suicide for oil companies or killing smaller refineries cold blooded..
I say buy now around 20, we might touch 19.
15/barrel for example is impossible to me unless they reduce taxes on oil products which.. noone will
TayFx
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@Spotifly, Yes it's complicated. There are types of oil in Canada going for 4$ a barrel because they are expensive to refine. Out of all of the formulas for Oil, WTI has the strongest fundamentals and that was the point I wanted to make
@TayFx, thanks I'll keep an eye on your ideas, you seem to know what you're talking about.
TheTradersAvenue
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I will be following this
TayFx
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@TradingAxis, No stoploss?
flhans
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hey mate,
as the strategic oil tanks fill to the brim, oil cuts will obviously have to increase, not decrease as you have stated. this is also what opec are aiming for. we are nowhere near the end of the epidemic, just the beginning. it was fundamentals driving the price of oil down to its current price, not algos, algos trade within ranges. the cuts didnt match the loss of demand we have seen and will hopefully stop oil plummeting lower. Of course at some point in the future oil will come back, but NOW or in the short term? i doubt it.