$50 or $60 Could be Make or Break Oil Prices for Saudi Arabia

 "As most of the rest of the world, also the Saudis have become path dependent; 1) maintain the peg, control price inflation through continued deflation of the money supply and get a full-blown banking crisis; or 2) alternatively, reflate the money supply, increase speculation in riyal forwards, devalue and get massive price inflation through the extremely important import channel. This obviously begs the question; at what oil price can the Saudi’s mange to muddle through without ending up in either 1 nor 2.  At today’s price of around USD50 / bbl Saudi Arabia will burn through USD90bn worth of reserves per year. This means under a mild deflationary scenario FX reserves will fall below M2 already by early 2018; even with a 10 per cent cost reduction. At 60 dollar and only 2 per cent reduction in cost Saudi Arabia will probably not have to worry about severing the peg.  Unless prices continue upwards, it will be interesting see what route, and which risks, the Saudi government is willing to take on. For now it appear route 1 is the preferred one, but as the banking crisis escalates we expect a gradual movement toward route 2. Unless oil prices spikes back to USD60 /bbl plus, and save the day. We doubt it!"

Saudi Authorities Panic - Ban Speculation On Riyal Devaluation Amid Banking Crisis | Zero Hedge:

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ALI

Saudi Currency Black Swan

 "Which brings up the question of devaluation: how long until the SAR has to follow the Yuan and see a substantial haircut. According to the market, 12 month SAR forward are now trading at a price which implies a 12% devaluation in the coming months. When that happens is, of course, up to the King Salman. What it also means is that as Saudi Arabia is now scrambling to generate any incremental cash, it too will be caught in the deflationary spiral of excess production as it will have no choice but to outsell its competitors, especially those rushing to grab Chinese market share such as Russia, as it seeks to make up with volume what it has lost due to lower prices. It also means that any hopes of a production freeze by Saudi Arabia - and thus OPEC - are hereby snuffed for the indefinite future."

Are The Saudis Facing A Full-Blown Liquidity Crisis? | OilPrice.com

$10? $100? Where the Oil Price Goes this Year is Anyone's Guess

"The median price predicted by analysts is around $46 a barrel for the end of 2016, but there is a lot of variation around that number. 

Last year, noted economist A Gary Schilling suggested oil could fall to as little $10 a barrel. 

Natixis SA, a Paris-based bank believes crude will average $38 a barrel in the fourth quarter of the year on concerns about Iranian production increases

Recent oil bullishness has been driven by increased oil supply disruptions which alleviate the daily production glut - Venezuela, Nigeria, China, Libya, Canada

“High” prices could be short lived, with Saudi Arabia and Iran both preparing to ramp up production and the hit to output in Canada due to wildfires being quickly resolved. 

Oil prices could be headed lower if the Fed raises rates in June. That scenario now looks increasingly likely thanks to inflation that is stronger than many have been expecting and an economy that is at least stable though not strong. 

U.S. rig counts are also still falling, with the number of oil rigs in the country down by more than half in the last year."

The Wildest Predictions For Oil Prices In 2016 | Zero Hedge

Oil Markets 'Black Swan Event'? -KSA Liquidity Crisis & Bets Against Saudi Riyal / USD Peg

AEP: Saudi financial crisis 'could leave oil at $25' as contractors face being paid in IOUs:

"Societe Generale’s currency team has advised clients to short the Saudi riyal, betting that the country will be forced to ditch its long-standing dollar peg, a move that could set off a cut-throat battle for global share in the oil markets. Francisco Blanch, from Bank of America, said a rupture of the peg is this year’s number one “black swan event” and would cause oil prices to collapse to $25 a barrel. "

Staying in the Zone: Why I Stay Quiet in Early AM in the Room

I don't like to talk over the mic in the room in the Early AM period. This article from Brett Steenbarger over at http://traderfeed.blogspot.com/ indicates probably that what I have unconsciously been trying to do is Stay in the Zone

The Surprising Reason We're Not In The Zone When We Trade


"The bottom left display shows that I am functioning "in the zone" during this period of coherence.  Over that period, almost all my scores fall into the green (high) coherence category (bottom right frame).  When hooked to the unit, you can see your rhythms, whether you're in the zone, and whether you're scoring in the green area.  All of these give you instantaneous feedback to let you know if your self-control efforts are succeeding. Notice the change in my rhythms (top panel) about midway through the demonstration.  At that point, I began talking aloud about financial markets in a stream of consciousness fashion.  I was *not* talking about anything stressful, but notice that simply taking my mind off the self-control efforts was sufficient to get me out of the zone (bottom left panel) and put my readings in the red zone."

TraderFeed


Naimi Fired!

Saudi Arabia’s Powerful Oil Minister Ali al-Naimi Is Fired

Departure is part of wider government reshuffle

Saudi Oil Minister Ali al-Naimi in Sudan on May 4.ENLARGE

Saudi Oil Minister Ali al-Naimi in Sudan on May 4. PHOTO: REUTERS

By

AHMED AL OMRAN

Updated May 7, 2016 10:50 a.m. ET

2 COMMENTS

RIYADH—Saudi Arabia fired long-serving oil minister Ali al-Naimi on Saturday, dismissing one of the industry’s most powerful figures as the country battles with weak oil prices.

Mr. Naimi, who had been the kingdom’s oil minister since 1995, has been a loud voiceagainst lowering Saudi Arabia’s production when prices fall, a departure from its past tactics.

He will be replaced by Khalid al-Falih, chairman of state oil company Saudi Arabian Oil Co., better known as Saudi Aramco.

The royal decree, announced via state media, is part of a wider government reshuffle that includes a restructuring of the oil ministry, which has been renamed the Ministry of Energy, Industry and Mineral Resources.

ANNOUNCEMENT - APRIL 1, 2016: CRUDE OIL GOLD TRADING ROOM OPENS!

As of April 1st, 2016 Crude Oil Gold Trading Room is now officially open!

We will begin by offering CL Crude Oil Trading Signals for only $79/mo as an introductory price.  The most recent backtest/simulated trading of our Renko-bar based system has generated some very impressive results.  10 trades a week, 87% wins and an average of almost 100 ticks per day / 500 per week.  You can view these stats in summary and detail here: 



As with the signals - the LIVE ROOM will initially be focused on Crude Oil but we expect to expand our coverage to GC Gold, YM Mini Dow, and ES contracts as we move forward.

If you have been on my mailing list for years - thanks for your patience and I hope you are still a member of the trading community, and, if so please stop by my site, look around, chat with me if I am online, follow my tweets, etc., and hopefully sign up with us for Signals or Live Trading.  I am looking forward to meeting you.

---  @CrudeGoldTrader

What an Appropriate Story for April "FOOLS" Day

Meet the millennials looking to get rich or die tryin’ with one of Wall Street’s riskiest oil plays - MarketWatch: "Meet the millennials looking to get rich or die tryin’ with one of Wall Street’s riskiest oil plays"


The real reason we have witnessed a retreat in crude pricing

Derivative Manipulation Hits the Oil Market | Oil and Energy Investor

The real reason we have witnessed a retreat in crude pricing has little to do with the condition of the market or the actual demand for product. It is the result of a classic yo-yo short in anticipation of a major advance in the price. In other words, some very large traders in oil futures contracts – the so-called "paper-barrel" speculators of future actual consignments of oil (or "wet barrels") – are manipulating a short-term cut in price after establishing a position that will profit with the price going down. This amounts to a "put" clone resulting in an exaggerated decline in the crude pricing level, usually orchestrated on a five-day pricing spread introduced by a sequenced derivative move on the futures contract itself. The trader profits when the price goes down by exercising the "put" to sell options on the futures contract at a higher strike price than that provided by the market by redeeming the derivative. Of course, when that happens, the market price will increase. The trader then profits again by having derivatives on the increasing price already in place. The price is manipulated just like a yo-yo moving up and down. Now the maneuver is only doable during periods of lower-than-average futures contract volume and a narrow period in which the price is not likely to spike because of outside developments (for example, natural disasters, a rapid escalation in hostilities, blockage of transit, collapse in production, and so on). It becomes less useful when the market indicators themselves are decidedly moving up. The approach succeeds by wider market perceptions, not fact. It ends when the actual pricing dynamics take over. In between, a few traders make some bucks by manipulating the margins. There will be little opportunity for this device to operate again as we move into the summer volatility.

Scott Pluschau: THE MOST DIFFICULT ASPECT OF TRADING TO MASTER IS....

ScottPluschau

Why do I not consider price?  A cognitive bias that can be a psychological disaster for a trader is known as "Anchoring".   "Chart Analysis" as difficult as it is, doesn't compare to "Self Analysis".  I spend as much time working on myself as I do on the charts.

GOVERNMENT REQUIRED DISCLAIMER

Government Required Disclaimer: Crude Oil Gold Trading Room does not hold itself out as a Commodity Trading Advisor (“CTA”). Given this representation, all information and material provided by Crude Oil Gold Trading Room is for educational purposes only and should not be considered specific investment advice. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.