Oil resumes decline as "speculative steam" exits via banks


Crude rallied hard into the close on Friday, perhaps over worry of some geopolitical blow-up over the weekend, but - with no blow-up forthcoming - it's resumed its slide, off 1.4% to $96.04 per barrel - right around the lowest since late January.

"The world has changed," says energy market analyst Daniel Dicker, noting conflicts in Russia/Ukraine, Iraq, and Syria, along with destabilization in Libya and Egypt - had they happened a few years back - would have sent prices soaring. What's different today, he says, is the exit from trading by the large investment banks. "This has taken an enormous amount of speculative steam out of the oil trade."

USO -1.2%

ETFs: USO, OIL, UCO, SCO, BNO, UGA, DTO, DBO, CRUD, USL, UHN, UWTI, DWTI, DNO, SZO, OLO, OLEM, TWTI

From other sites
Comments (9)
  • Gary Jakacky
    , contributor
    Comments (2970) | Send Message
     
    Yeah what is also missing is discredited "peak oil" theories and anti fracking whack jobs from Colorado to upstate New York. And what will SOON be missing is a democrat-led senate. Once the republicans starve Obama discredited regulations out of existence we'll finally see some economic growth.
    18 Aug 2014, 01:45 PM Reply Like
  • deercreekvols
    , contributor
    Comments (9746) | Send Message
     
    Great point on anti-fracking whack jobs...I live in WNY and would have to say that the finger should point directly at Gov. Cuomo and his pals in Albany when talking about New York and the anti-fracking movement...living just miles from the PA border and seeing what fracking has brought to that area, I say to Gov. Cuomo: LIFT THE MORITORIUM!

     

    Just my 2 cents...
    18 Aug 2014, 03:30 PM Reply Like
  • mitalpha1
    , contributor
    Comments (15) | Send Message
     
    Daniel Dicker remark - 'the exit from trading by the large investment banks. "This has taken an enormous amount of speculative steam out of the oil trade."' is plain wrong, just compare front month crude futures volume for 2 years and see that daily volume is practically the same
    18 Aug 2014, 01:56 PM Reply Like
  • Fracjob
    , contributor
    Comments (2396) | Send Message
     
    So, a trader talking about speculative trade? Assume he trades? Sounds like an explanation one would get from the current administration, about how price is being controlled and exploited by hedge funds, or some other entity. Regardless of short term standing, traders don't control the price of oil, and never will.
    18 Aug 2014, 02:37 PM Reply Like
  • captiankirkoptions
    , contributor
    Comments (241) | Send Message
     
    I agree the comment is wrong. Investment banks are still the major holders. We have had record net spec long positions twice in the last 12 months. It is going down because any reasonable person can see we have amble supply and no disruptions.
    18 Aug 2014, 03:37 PM Reply Like
  • Captain Pike
    , contributor
    Comments (890) | Send Message
     
    When the price goes up as it did a couple months back we had ample supplies. Speculation has an awful lot to do with it and disrupts the "market". Good thing is with Tesla/BEV's and home grown fracked supplies growing oil will be an ever decreasing part of the energy picture leading to a great stable economic picture and low inflation/low int rates, like it was pre-1970.
    18 Aug 2014, 04:53 PM Reply Like
  • Russell Upsomgrubb
    , contributor
    Comments (73) | Send Message
     
    First of all, the shale "American Energy Independence" story is a bunch of nonsense, hyped by the industry, the media and the government. Shale requires new wells, even horizontal, to be drilled again and again, at a cost of 8-10 million per well because of the enormous depletion rates, which get worse as the sweet spots in the shale plays get depleted at an ever increasing rate. The whole thing- the oil, NGLs, the 100 years worth of natgas reserves are a pipedream, a big LIE. The same companies that started building natural gas importing plants, like Cheniere Energy, back in 2006 after Katrina when natgas was $15/tcf, are now building natgas exporting plants because they want investors to believe the hype. Read what geologists like Arthur Berman and David Hughes say, read abut the US government's own reduction of recoverable reserves from the Monterrey Shale by 96% ad the USGS 2011 survey of the Marcellus Shale that reduced recoverable reserves from that shale play by 80%. It is bunch of nonsense- there will be no manufacturing renaissance due to cheap US energy and we will not be energy independent until we get off of fossil fuels.
    19 Aug 2014, 02:38 AM Reply Like
  • kmi
    , contributor
    Comments (4684) | Send Message
     
    Been hearing ^^^^^ for years now. The problem with theories that take a decade or more to pan out, like this one, is that the dynamics of the world change far too rapidly.

     

    In 2008 it was 'the end of oil is here!'... in 2014... "fracking is bogus" what will it be in 2020?
    19 Aug 2014, 08:18 AM Reply Like
  • Captain Pike
    , contributor
    Comments (890) | Send Message
     
    That post was probably the biggest load of crap I have read on SA and I have read a lot of crap here. But that's the problem when you have zealots post from emotions instead of a logical use of facts.

     

    Shale will run a long time, there is so much of it that is not getting retrieved currently and the tech keeps getting better.

     

    The manufacturing boom is already here Einstein! New steel plants all over including Youngstown OHIO to supply the tubes for all this drilling and all the tanker cars and all the pipelines. Not to mention the billions of plants for petrochemicals in Tx/La.

     

    Cheniere is an example of what? That no one knew about what was to come with this amazing fracking story. Yeah Dude, no one knew! Now we do.

     

    You're most likely one of those worst kind of environmental nutjob/hypocrites that lives a good life from modern tech energy but is miserable for some reason like those phony libtards in Hollywood like that douche caught on camera.

     

    Those so-called experts you cite are no different than the well known TOOL who has bashed Tesla for years in his articles on SA only to be proven 100% an Ahole who was no expert on anything.

     

    If anything the US has nothing but cheap abundant energy in its future with oil/gas, centuries of clean coal (transgas dev systems et al), joule unlimited and the oncoming rush towards Solar.
    19 Aug 2014, 11:57 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs