The Only Certain Thing is Volatility

By: Angela Agostinone / December 18, 2015

Earlier posts this week have touched upon many factors influencing the bearish market.  The following is a recap of the events:

  • The DOE statistics released Wednesday showed a build in all inventories
  • The Federal Reserve increased interest rates by 0.25%, causing a stronger dollar
  • The ban on U.S. crude oil exports is expected to be lifted
  • Crude imports are at the highest levels since September 2013
  • OPEC decided to not cut production for 2016
  • El Nino weather conditions are causing lower demand for heating oil

The oil trader Pierre Andurand believes there are many indications that the price of crude oil will go below $30/bbl and could even go below $25/bbl in the first quarter of 2016.  Goldman Sachs also expects oil prices to fall and continues to stand by its earlier prediction of $20/bbl being the bottom. In a report this morning, industry analyst PVM questioned how forecasts went from $200/bbl in 2008 to $20 now. Their opinion is that analysts suffered from a “lack of foresight and questioning of basic assumptions.”  This brings to mind a recent article by Reuters analyst John Kemp, who made the argument that “there is no evidence anyone can accurately and consistently predict the price of oil more than a few months ahead let alone for years or decades in the future” and that the only certain thing about the oil market is it will be volatile (http://www.reuters.com/article/oil-prices-kemp-idUSL8N1443E920151216).


 

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Categories: Daily Market Update


Angela Agostinone

Written by

Angela Agostinone

Angela manages daily price changes from suppliers to ensure Guttman Energy customers are getting the most current and competitive rack prices. She is also responsible for relaying supplier product allocations to Guttman Energy's sales and logistics team, as well as analyzing specific benchmarks such as OPIS, Platts, and Argus to ensure each customer is getting the greatest value from their contracted fuel purchases.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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