RE:RE:RE:Oil Swami Nuttall gives nod to SuncorMigraineCall:
I just saw your post. I missed it yesterday.
I'm kinda done posting here but out of respect for your effort and contribution to this site, I thought I would offer a couple of comments in response.
1) Biden declared an intention to start refilling the SPR at some point with no promise of when, at or below the range of $67 to $72 per barrel. To my knowledge he didn't declare if the prices quoted were for Brent or WTI. Let's assume he meant WTI.
Of course the market ASSUMED that it was a done deal that $70 would be a floor. That is what Wall Street does. It jumps to the conclusions that it wants to jump to so that it can continue it never ending path of manipulating the market. When it comes to oil price manipulation, the market is at its best.
However, Biden didn't lie as you suggest. Read his comments without having the blinders that the market makers wear.
Biden said they would start refilling at some point with no promise of when
Biden also said at or below the $67 to $72 range. Did everyone miss the "below" part?
The fact that Biden hasn't started refilling the SPR while the price of oil is below $70 should be a huge warning to the oil market. Who do you think has better intel on what the Biden administration intends to do, Biden or oil traders? Now that Russia no longer presents a viable alternative to the USA, oil suppliers are going to have to think twice about snubbing Biden. When Biden returned humiliated from his meeting with MBS in Saudi, apparently things got crazy in the White House for awhile. It's interesting how things have turned out.
I try to look at the bigger picture. What does Biden want to achieve?
* Let's start with choking the Russians and declawing OPEC +. Mission accomplished
* Next, Biden wants to win elections. With oil prices back down (a huge win for the Dems in the eyes of the public) and manufacturing roaring back into prominence in the USA via the explosion of investement in clean energy, the Dems are actually doing what the Republicans always claimed they were doing. Look at the timing of all of the events that are taking place and fit them into a November 2024 perspective. By the time the election rolls around in November 2024, inflation will be under control, interest rates will be heading back down, and American manufacturing will be boomin. Mission accomplished regardless of how much Trump destroys the Republican chances or how much better the environmental issues will have improved..
2) I keep reading how the demand for oil is increasing. The numbers don't lie but how long is that going to continue for?
What concerns me much more than total demand for oil when it comes to Suncor, is where the demand comes from. SU sells its oil to the USA and to Canada. The writing is on the wall for the USA and Canada when it comes to oil demand.
Of course Trans Mountain is coming on board which should help SU a bit. However, SU has to compete with other Alberta suppliers for TMX access. Worse still, Alberta will be competing with the world once its oil hits the coast. Will Russia allow Canada to beat it on prices when Russia is already discounting prices by 40%. You say SU is going fine at $70 prices but SU isn't competing with Russia yet. At $50 per barrel, SU stops being a cash cow with no future. Will Saudi and other OPEC countries with $10 well head costs allow Canada to take their market share?
Despite all of the legitimate complaints about how the US refineries have abused Alberta on WTI prices for years, those same refineries have provided Alberta with steady demand. As that demand begins to dry up, Alberta will have much more to worry about.
I'm grateful that you generously share your knowledge about the oil industry. I used your information (and the info supplied by others on this site) to help make a 7 figure profit on SU.
I sold when I realized that the institutions were selling because they had better information, or saw the big picture before I did. Time will tell if that was right or not.