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2010 Predictions: Oil

The spectacular rebound in oil prices in 2009 could be attributed to two major factors: fears of currency debasement that lead to excess hoarding and speculation; and discipline of well-oiled Opec members to cut production. You already know from many publications that all tankers used to stockpile oil would form a line of 26 miles. There is a wonderful analytical publication on the tanker fleet here: Tanker Glut Signals 25% Drop on 26-Mile Line of Ships It covers many aspects of oil stockpiles. The only conclusion from that article I can make is – the price will be volatile. The current price is held up by the discipline of several major producers who have enough money in the bank to pump much below capacity. So the supply side will be determined by several rogue producers that may increase output at the expense of global oil prices. Here I will try to determine those nations. Please note that I’m not an oil expert and I’m giving you just some observations, not conclusions. The first rogue nation is Venezuela. From this article you would learn that the 50% currency devaluation was necessary to keep the country’s economy from collapse, however it seems that they already pump at […]

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