The bullish oil price scenarios are giving way to what seems to be ever mounting supply. Mario Draghi failed to provide any real simulative hopes and we had a weak ISM nonmanufacturing data report that lowered demand expectations and so we have growing odds of a continuing price collapse. In the beginning of the year on my oil outlook, I said that oil would be in a range between $100 a barrel and $110. I said if the market feared that we would be on the verge of war with Iran we would be closer to $110 and if we were less worried closer to $100. It appears the market has played that call out almost exactly but now it seems that with Iran on the back burner and Iranian supply almost replaced by rising OPEC production, the odds are increasing that $100 a barrel may fall.
Of course with weak demand for gasoline my call that $3.00 a gallon gas was more likely than $5.00 a gallon gas that you can find online on MarketWatch Radio. Of course back in February when I made that prediction many were calling for $5.00 a gallon. The crude market was surging, refineries were closing and it seemed like the world was preparing for war. Yet the odds of war in the short term is unlikely and with the all the preparations that have been made ahead of a potential war, the risk of losing Iranian crude has largely been negated.
Consider for instance the announcement by the UAE that their long awaited pipeline to avoid the Straits of Hormuz. Reuters News reported that, The UAE's strategic oil pipeline for bypassing the Strait of Hormuz is complete and exports are expected route out of the narrow strait which Iran has threatened to block as western pressure to limit its oil revenues has intensified.
About Fracking Time! The Wall Street Journal reports that the Obama administration will soon issue sweeping new environmental-safety rules for hydraulic fracturing on federal land, setting a new standard that natural-gas wells on all lands eventually could follow. The rules, which are likely to be unveiled by the Interior Department within days, are designed to address concerns that the method of extracting natural gas known as fracking can contaminate groundwater. Among other things, they create new guidelines for constructing wells and treating waste water, according to a draft of the proposed rules reviewed by The Wall Street Journal. At the same time, the department loosened a proposed requirement for companies tied to disclosing the chemicals they use to extract natural gas from the earth, after the industry complained an earlier version would slow drilling too much. The change, which disappointed environmentalists, is a fresh sign that the administration is heeding industry concerns after Republican complaints of overregulation. Last month, the Environmental Protection Agency gave the industry two years to comply with new air-quality standards for oil and natural-gas wells after the industry complained it would be difficult to meet new standards. A must read!
YOU NEED THE POWER TO PROSPER! Tune to the Fox Business Network where you can see me every day! Also make sure that you get a subscription to my Daily Trade Levels! Just call me - Phil Flynn - at 800-935-6487 or e-mail me at firstname.lastname@example.org
There is a substantial risk of loss in trading futures and options.Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.