Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
This sideways price action to be expected in the crude market right now, in the low to mid 70s. With possible rate cuts from the Fed looking to be in the middle to late part of the year a meaningful move higher in crude prices probably won't start until late spring, if supply/demand dynamics stay about the same.
Crude trading in the mid 70s now. One could only wonder how much lower prices would be had there been no conflict in the Middle East.
News sources saying there was a larger than expected global surplus in crude supplies in January. This surplus is said to be due to seasonal weakness. Analysts think this surplus will flip to a 1.6 million barrels per day deficit in February.
The Fed talking about rate cuts and saying March may be to early for cuts. If inflation data remains stable to down then I would say possible cuts in the summer like May or July. I think with rate cuts this summer oil moves into the 80s around that time.
Portfolio investors abandoned hope for an early rally in crude prices after a site-wide electricity failure caused an unexpected shutdown in production at BP’s (BP.L), opens new tab refinery at Whiting in Indiana on Feb. 1. The refinery is the largest in the U.S. Midwest and processes more than 400,000 barrels per day, so the extended closure for safety checks and restart processes threatens to reduce crude consumption significantly. Surplus crude is likely to accumulate across the Midwest and especially around the NYMEX delivery point at Cushing in Oklahoma. Before the power failure, Cushing inventories had been depleting, and investors were positioning for a squeeze on deliverable supplies. The prospect of a squeeze had been lifting prices for both U.S. crude and Brent, but the outage has delayed further depletion and sent prices sliding. Hedge funds and other money managers sold the equivalent of 86 million barrels in the six most important petroleum-related futures and options contracts over the seven days ending on Feb. 6. There were heavy sales of NYMEX and ICE WTI (-62 million barrels) and Brent (-23 million) as fund managers anticipated a significant increase in the amount of crude available. Funds sold WTI at the fastest rate since October 2023 and before that July 2021 as the prospect of a squeeze receded. The combined position in WTI was cut to a three-week low of 55 million barrels (4th percentile for all weeks since 2013) down from 117 million barrels (16th percentile) the previous week. Fund managers had been trying to become bullish again about WTI since the middle of January on the prospect of sustained inventory depletion and renewed growth in U.S. manufacturing. But the Whiting power failure has pushed that scenario back by at least several weeks.
