Thursday, August 11, 2016

OPEC Tells Us There's More Oil Downside

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*OPEC reported higher production.
*They restated past production numbers higher as well.
*We expect production to race higher into the OPEC meeting.
*When matching that with seasonality, that is not a good thing for oil.
OPEC supply numbers were worse than expected. They also updated older numbers higher. The US supply numbers were also higher. We don't see how OPEC can come to terms on supply. We think the global economy could be slowing too fast for countries to stick to a deal. We still see downside for oil.
First, Let's Look at OPEC Production
Here are the new numbers they gave on production (pg. 61 of PDF). July was higher than May and June.
This Month's OPEC ReportMayJuneJuly
Iran356036173629
KSA102421044710477
Total OPEC326173305933106

Not only did the numbers go up in July but last month's numbers snuck higher as well.
Here's last month's reported numbers (below). You'll see May and June were lower (last month, pg. 63 of PDF) last month (below) than May and June's report this month (above).
Last Month's OPEC Report
AprMayJuneJuly
Iran345735673644
KSA101601024210308
Total OPEC326203259432858

May and June in this month's report (the first set of numbers) moved higher than the May and June of last month's report. You can see the first grid also showed a steady build month to month into July.
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Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principal especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS