Morganlander & Schachter on BNN comments on oil price---Chad Morganlander says in essence oil has nowhere to go but down. (6-12 months) 2 factors:
1. N.A. is getting better at oil production at a lower cost & therefore neutralizing OPEC & also if OPEC does not cut deeper.
2. China's growth rate/demand for 'stuff' is slowing.
---WTI goes below $40. maybe even below $35. in the next 3-4 months.
---US economy will have very slow growth & earnings will decelerate as interest rates rise. Does not see 'animal spirits' juicing up growth in the US.
---Schachter sees more pain ahead.
---with peace in Libya now, production has skyrocketed, US production up to near 9.3 MBbl. (not including Bakken supply which will increase (300 TBbl.) due to a new pipeline agreement); so even if OPEC keeps the quota as is till the end of 2017, oil price is not going up on a fundamental basis & is up only on rhetoric. Gasoline demand continues to fall (Y/Y basis). China PMI figures bad indicating crude demand not sustainable.
---back in April, I said(Schachter) oil in a $46-56. range. If oil goes over $56. the bulls win. But if we bust $46., OPEC keeps the cuts status quo, Libya, Nigeria recovering, US oil producion goes to 9.7MBbl. a day, oil companies could be savaged in the next 4-6 months with oil going to below $40. when the Bakken increase comes on line & the low $30s. if OPEC doesn't cut more or there is cheating. Maybe back down to the previous low of $26.
---If the above comes true i say CPG could see a 8 or 9 handle before the fall. That will be the time to load up the truck.
carlos