oil

In practice, there is no bottom to how low oil prices can drop: as Canada's Bank of Montreal calculated over the weekend, as a result of an unsustainable supply-demand balance "something has to give", and for that to happen oil may drop to $25, $20 or even $15, as some aggressive put buyers are speculating. This is what the Canadian bank said:

We believe that the weakness in crude oil prices reflects a combination of fundamental factors and financial flows. Fundamentally there is simply too much oil.

 

When looking at the price of oil in 2015, Canada's Bank of Montreal admits it was wrong. Very, very wrong.

In our classic piece “ISIS Oil Trade Full Frontal: "Raqqa's Rockefellers", Bilal Erdogan, KRG Crude, And The Israel Connection,” we discussed how Masoud Barzani and the Iraqi Kurds transport some 600,000 b/d of crude to the Turkish port of Ceyhan in defiance of SOMO amid an ongoing budget dispute between Baghdad and Erbil.

Turkey facilitates this trade and we suggested that ISIS (which Turkey is suspected of supporting in order that the group might continue to destabilize Assad) may be using the same networks to get its illicit oil to market. 

In OPEC's latest annual World Oil Outlook released on Wednesday, the now defunct cartel (courtesy of Saudi Arabia's insistence on vetoing any production limit) said that demand for its crude will slide to 2020, as rival supplies continue to grow. On the supply side, OPEC said it would need to pump 30.7 million barrels a day by the end of the decade, which is 1.7 million barrels more than it projected a year ago but well below, or some 1 million barrels less than the group pumped in November.

With memories of last week's high-volume, post-Fed, quad-witching selloff fading fast, overnight the Santa rally defined as no volume, no breadth levitation, has continued for a third day and moments ago European stocks rose to their best level of the day, with the Stoxx Europe 600 Index headed for its biggest advance in a week, while US equity futures ramped on the European open as they traditionally do, and then again hit session highs minutes ago, as holiday volumes are in meltdown mode, and oddlots can move the E-mini by 1 point.