Hi All, These are my thoughts about where oil is headed but would love to hear any rebuild or thoughts of your own. Bearish. (I think) The relative increase in the value of the US dollar against EM currencies is going to be hurting them in 2 ways. 1. Oil is becoming more expensive which is bearish for demand. 2. US dollar denominated debt is also going to be more difficult to pay back, in turn drawing more money out of the country, which will hurt. If the Emerging Markets go into a crisis, this will spread to those lenders who own the debt, as they begin to fail on payments. The owners of the debt are mainly US financials. If US financials come down, so does everything else. On the bullish side, Iranian sanctions, limited spare capacity, reduced investment in new oil production. Iranian Sanctions Trump is not going to want to see too much of an increase in the price of oil because of thecorrelation between US gasoline prices and a Presidents popularity (especially as we approach the midterms), therefore, he could change his mind on the sanctions or provide wavers to relieve pressure on the market, which will bring down prices. Limited Spare Capacity In July of this year Saudi Arabia reduced its oil production because it was unable to find buyers for its oil. I think that this is indicative of the fact that supply is well balanced with demand (at least in the short term). Also, any losses can be replaced with increased US Shale output, provided the Permian bottlenecks don't cause an issue (again, not a challenge in the short term). Reduce Investment This is not an issue in the short term, and the reduced capacity of aging oil fields. Again, this is not an issue in the short term.
Absolutely no idea. One thing good about day trading is that we don't have to predict where price is going.