OIL AFTER DOHA

Well DOHA came and showed it has always been a smoke and mirrors game. After the debacle, oil suffered a decline but towards the closing of the week roared back to trade at US$43.75 per barrel much higher than it was prior to the DOHA meeting.

This has dumbfounded speculators, traders and investors as all news point to a supply glut with Russia, Saudi Arabia and Iran promising to produce more after the DOHA talks ended in failure to reach any consensus.

Perhaps this could be explained by the following, where metals and oil commodities were subject to speculation by none other than the Chinese traders and speculators who jumped into the commodity market boom in China as the recent PMI data suggested that China's economy is roaring back to life as the government pours money into infrastructure.

Source: Zero Hedge




However, like any speculation it has gone ahead of the demand, and with the glut in the supply of oil and steel products, could end pretty costly for the Chinese traders and speculators. Remember how it ended badly for the Shanghai Stock Exchange in the summer of 2015?

I do believe that oil will face tremendous resistant at US$45 per barrel as the supply glut is still an issue.

I will also avoid buying into the oil companies as the I see more misery in earnings. Both Halliburton and Schlumberger reported earnings that were disappointing to say the least, and on top of that, saw massive jobs cut, with the former cutting 8,000 jobs, and the latter, a third of its work force.

The above is just my opinion. You are encouraged to do your own research.