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Strategies & Market Trends : Humble1 and Swing Trading Friends -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (24968)

12/19/2016 10:43:51 AM

From: Runomo™

Respond to of 41021

"Commodities are supposed to bottom first in a disinflationary / deflationary portion (the economic winter) of Economic and market cycles.

So crude which truly is possibly the single most essential global commodity was rebounding "

Hi John,

Thanks for your post. I agree with you crude is the single most essential global commodity.
it is also the single most political global commodity as well.
It's really above my pay grade to sort out the political calculus behind the
scenes but a couple of thoughts enter my mind, the Iraq war and the Iran nuclear
deal.... both very unpopular political actions taken by a republican and a democratic president
that ironically have paid a handsome dividend to the American voter by keeping the price of crude so low.

I believe Iran has almost doubled its crude production after the lifting of sanctions and Iraq
was not even producing 2 million barrels per day during Saddam regime with their oil
infrastructure in total disrepair. Today its global production is 4.8 million bpd and rapidly rising
as it repairs its infrastructure and taps into probably the worlds largest oil reserves.

So the question is where would oil prices have been had this huge extra supply from these two countries alone not been available to global markets today? Global demand growth has been rising steadily
even in relatively subdued slow burn disinflationary times so what if the global economic engines begin to rev up?