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The CL Crude-analysis Thread
Started:December 17th, 2014 (02:33 PM) by tturner86 Views / Replies:125,712 / 1,754
Last Reply:December 4th, 2016 (01:02 AM) Attachments:450

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The CL Crude-analysis Thread

Old March 28th, 2015, 05:07 PM   #831 (permalink)
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ron99 View Post
The US hit 9.42 last week. Well ahead of the EIA prediction of the middle of the year.

The way I understand it, the "variable" cost of production (as opposed to fixed cost) is low enough that they still make money on every barrel they get. Unfortunately this doesn't cover their fixed costs (in specific their debt) so they are pumping/drilling as many additional barrels as they can, to make whatever they can, to try and cover their fixed costs/debt. I also understand that many of them are hedged out thru at least the end of this year, and some out thru next year, so real pain is still many months of for many of them.
(And yes I understand that those are in some ways contradictory statements.)

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Old March 28th, 2015, 05:18 PM   #832 (permalink)
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My thinking is that rig counts are not worth looking at anymore because production is far more important and less reliant on rig count.

We all know that rig count will fall more and it will rise after oil rises.

The big question is when will production drop. Or even just quit rising.

With the amount of oil production hedged, we may not see a drop for a long time.

The wild card in this is if Iran is allowed to sell more oil. I believe I read they have 30 million barrels ready to sell. Much in floating storage.

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Old March 28th, 2015, 05:21 PM   #833 (permalink)
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I have heard that companies need to keep oil wells producing to keep from losing leases or to keep from having to cap them per gov regulations. Is it possible to just slow down the output of a well to prevent losing or capping it?

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Old March 28th, 2015, 05:29 PM   #834 (permalink)
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As of last DCOT, Managed Money (CTAs and CPOs/Hedge Funds) decreased their futures net long by about 2,500. Both by decreasing longs and increasing shorts.

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Longs increased some after price got below 50 but has stayed at same amount. Shorts have been steadily increasing lately.


Last edited by ron99; March 28th, 2015 at 08:06 PM.
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Old March 28th, 2015, 07:18 PM   #835 (permalink)
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When I started this thread I didn't know how well it would do. 21 pages later I am still working though everyones posts. Thank you to everyone who takes the time to post and share ideas.

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Old March 28th, 2015, 07:39 PM   #836 (permalink)
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ron99 View Post
I have heard that companies need to keep oil wells producing to keep from losing leases or to keep from having to cap them per gov regulations. Is it possible to just slow down the output of a well to prevent losing or capping it?

This is generally accurate, however most of the leases allow for a period of time for the well to be shutdown. In some cases it may be cheaper to pay the penalties rather than keep the well running.

Also, many of the wells being shutdown may have been reaching the end of their life anyways so it was now economical to go ahead and shut them down.

Not all wells run 100% of the year anyways. Some regulations (state, fed, unions, landowners) force them to be shutdown for certain periods...

Depends on the type of well and oil/gas being pumped as to the possibility of slowing it down. Not likely to be the case for most of the US.


Last edited by wirechild; March 28th, 2015 at 08:08 PM.
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Old March 28th, 2015, 08:05 PM   #837 (permalink)
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wirechild View Post
This is generally accurate, however most of the leases allow for a period of time for the rig to be shutdown. In some cases it may be cheaper to pay the penalties rather than keep the rig running.

Also, many of the rigs being shutdown may have been reaching the end of their life anyways so it was now economical to go ahead and shut them down.

Not all wells run 100% of the year anyways. Some regulations (state, fed, unions, landowners) force them to be shutdown for certain periods...

Depends on the type of well and oil/gas being pumped as to the possibility of slowing it down. Not likely to be the case for most of the US.

You are calling it a rig, but isn't it a well and not a rig?

The Baker-Hughes Rig Count is actively drilling rigs not wells. From their FAQ


Quoting 
To be counted as active a rig must be on location and be drilling or 'turning to the right'. A rig is considered active from the moment the well is "spudded" until it reaches target depth or "TD".


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Old March 28th, 2015, 08:10 PM   #838 (permalink)
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ron99 View Post
You are calling it a rig, but isn't it a well and not a rig?

The Baker-Hughes Rig Count is actively drilling rigs not wells. From their FAQ

Yes, multitasking... I did mean wells and stated it correctly on the last half but was just reading another article about rig counts before replying.

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Old March 28th, 2015, 08:20 PM   #839 (permalink)
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ron99 View Post
My thinking is that rig counts are not worth looking at anymore because production is far more important and less reliant on rig count.

We all know that rig count will fall more and it will rise after oil rises.

The big question is when will production drop. Or even just quit rising.

With the amount of oil production hedged, we may not see a drop for a long time.

The wild card in this is if Iran is allowed to sell more oil. I believe I read they have 30 million barrels ready to sell. Much in floating storage.

I have been wondering about this myself and was trying to do some research. I came to the same basic conclusion that rig counts aren't worth much right now.

In my area where I live natural gas drilling has dropped from about 25 active rigs to about 6. That seems like a huge drop, however they tell me that it could go back up to 15 overnight and 20 within 3 days.

Is the 30 million barrels in storage a lot though in the bigger picture? The estimates I saw were from 5m to 35m, but if it is 30m isn't that about 1/3 third of the world's production in a day? Most likely to only have an impact over a couple weeks. Also, it is only speculation that all of the storage is intended to be sold. It is possible they are storing it for other purposes as well.

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Old March 30th, 2015, 11:48 AM   #840 (permalink)
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Hi mfbreakout, I been learning very much with all your posts in this awesome thread, thanks is not enough. how tight are your stops loss? and how often tries to grab the market by the balls . do you use always the 6 trades rules?

thanks


Thanks Engel532. I have found CL to be very dificult to trade since end of January 2015. CL will get stuck in a tight range for hours and then in the next 10-20 minutes move 80, 120 etc ticks in one direction. To overcome this, i have started doing following ;

1) Reduce profit targets. For example, i am short from 48.97 this morning. I have been holding this short for over an hour. Not a good feeling if one is loaded . Thus , i covered some 48.50, covered some more and now CL is stuck at 48.30 for 30 minutes.

2) I have reduced my stop loss fom 150 ticks to 30-50 ticks range. My short from 48.97 had a stop loss above 49.50 area.

3) I stopped adding to my position size in March. It was just not working out.

I had loosing Monday, Tuesday, Wednesday of last week. Thursday was good and Friday was OK till i loaded up into shorts into the close around 49.30 area. That 1 trade took care of of entire week. Being down 3 days in a row and then having biggest position size of the month into the close is something ONLY comes with experience and involves a fair amount of LUCK also.

When i am trading per plan couple of trades is all i need. Trading beyond average of 6 trades per day means, i am either trying to break even or trying to get out of a hole. I do not recall a day in 5 years of my trading where i had more than 10 trades for the day and i had a GREEN day. Price stays in the middle of bell Curve for most of the trading day and if a trader is trading edges of a BELL CURVE, it's very hard to come up with more than couple of setups per day.



My posts are not meant to give financial advice neither do they imply that my method is special. "THIS IS WHAT I COULD BE IF I HAD A TOTALLY CARE FREE STATE OF MIND DURING TRADING" Mark Douglas.
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Last edited by mfbreakout; March 30th, 2015 at 12:04 PM.
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