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Strategies & Market Trends : Dino's Bar & Grill
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To: Goose94 who wrote (12467)4/7/2015 7:31:40 AM
From: Goose94 of 203540
 
Josef Schachter Oil outlook..

The energy sector still has downside risk as the world-wide over production of Crude Oil remains 1.5 million barrels greater than demand and inventory space is rapidly filling. Last week the U.S. took 4.8 million barrels of the excess and now stands at 91.4 million barrels ahead of the prior year or 24 percent above normal inventories. In the key storage area of Cushing inventories rose on the week by 2.6 million barrels and now sits at 58.9 million barrels with effective capacity at 63 to 65 million barrels, or 2-3 weeks from being full.

We expect that the next month or two will show that there is no more place to store the excess production and that the price of oil will fall to the point or price level that will shut in high cost non-OPEC oil. This clearing price will have to be over U.S. $40 billion to start shutting in high cost heavy oil and stripper oil across the world. Our expectation is that over the next month or so WTI will fall to the $32 to 36 level and stocks will retreat as well. A climate of fear should occur and the long oil speculators should exit their positions and this liquidation should create the market lows for energy prices and the stocks, as it did in March 2009. This would set up one of the best buying opportunities that one will see for the sector. Investors should get their buy lists ready so to be ready to move as the climactic action unfolds.
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