Carl Larry @oiloutlooks
Well if we’re talking about the low for bank trading books, probably not.
As for crude oil I think we have a better chance of seeing Chuck Norris cry after watching Steel Magnolias than seeing oil prices lower this year. The headline of $20 oil will be regarded in 2015 as well as $200 was in 2008. After the major shift to close out 2014, we never had a chance to look back. Of course I’m referring to the U.S. Dollar Index breaking above 88.00 and the euro currency crashing through the 120.00 support. If you think I was referring to the OPEC decision to leave production at 30mm b/d, please head straight to the principal’s office. This will go down on your permanent record.
OPEC has to make a decision about something. We have a special meeting on October 21 and if nothing is resolved at that meeting, we still have the December meeting on the calendar. At this point it looks like a stalemate between the U.S. Fed and OPEC as to which group is willing to do the right thing sooner than later. One thing we know for sure, if production levels remain, there will be blood.
Countries like Saudi Arabia, Kuwait and Qatar are already feeling pressure after a year with low oil prices. They are feeling the losses in their budgets and will need to reconcile some solution. Countries like Nigeria and Venezuela are hanging on by a thread and they cannot remain viable economies through another six months of lower oil prices. So before the end of the year, something has to give and it has more upside potential.
All in all, what we should see from here to the end of the year is nothing we haven’t seen in the past ten months, "sharply unchanged." The low is in and new highs are still low.