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Sold myself at 313, likewise a bit gutted to miss the rest of this rise but it feels a little frothy at the minute. Likewise will buy back in as and if it falls suitably. Currently lumped into BATS in the interim.
Thanks for your response one or two of my points ahich suite and ignoring the rest that dont
Oh dear Lord, the share price is down this morning, cue Charlesruxon the manic one who is on a high with a penny up, but stripped of shoe laces and his belt when it’s a penny down.
You make some good points regarding the demand destructions, however I think a lot of people have made good contrarian points in regards to where we are heading with oil.
I feel demand will keep rising in the near term however investment and appetite for new supply is waning. I do not see the price of oil simply fizzling out due to lack of demand but rather reaching a point of pricing supernova due to unshakable demand and lack of investment in a dying industry. I'm trying to think of a parallel but I'm struggling - maybe prohibition....or anything outlawed I suppose.
The human race is terrible as a whole at making predictions and targets and i feel the transition to EV/alts will be the same. I'd encourage you to read any 2020 vision document that most governments / companies produced in the last 20 years.
I don't think this is going to be particularly nice or smooth.....the reason I opted for BP was the mitigation of risk by way of green transition...which also happens to be the right thing to do.
One big factor that you’ve missed compound is the valve of money. It maybe up and down but 100$ will be reached and broken and will be here to stay. 100$ maybe 90$ and then 110$. Has oil gone up or has money gone down? Or maybe a little of both.
I honestly don’t think anything I post on here is going to make the slightest bit of difference to the SP of a FTSE 100 company !!
$65-$70 is the sweet spot for a range of reasons that effect the demand / supply balance.
It’s a good price for OPEC+ countries (and BP) as it’s way above their b/e price so they can make good money.
Any higher though and you start to get demand destruction as people cut back on what they use as it’s too expensive, and it can stifle economic growth, both of which can lead to a reduction in demand that leads to a down trend in price.
It’s also around the point where many US shale oil firms with a higher break even price would be tempted to seriously ramp up production again. If that happened en masse then there would be an oversupply of oil.
If you look at the charts you can see how that price action has played out over the last few years. Spikes above that range have always lead to bigger drops. The last spike up to $86 in 2018 was followed by a drop to $50.
The last time we had sustained prices over $100 was 2011-2014, but that was when the US were importing half of their oil, and before the shale and fracking boom which made the US the worlds No 1 oil producer. It’s a different world now and the higher the poo the more US rigs come online which moderates the price.
The rise up to $80 was a self fulfilling prophecy spouted by investment bankers and commodity brokers like Goldman Sachs who profit hugely from these swings.
There hasn’t been any actual shortages of oil - just a few draws on inventories which will be replenished when more production comes online.
So you missed the boat and sold early and now trying to deramp this ?! lol
Sorry your post doesn't make a no sense to me, a sweet spot being $70! On what basis you concluded that?
Why not $90 or even $100 to be sweet spot ?
The other thing you got completely wrong is not understanding the supply /demand is not as easy to adjust as one hope, takes months for the effect to come through either way.
You will see the talk of the day will be OIL for many months to come and if you could join the boat at lower price good luck mate but this is heading towards 400 fairly quickly
Sorry Licker but I must disagree. Oil is hyped up / talked down continually so traders can make a fortune. Just look how much BP makes from it.
The narrative the last 3 weeks has been very bullish, but the narrative around the supply/demand balance can change very quickly.
Some OPEC members were a bit slow off the mark ramping up production, but they were just just temporary glitches that will quickly get sorted. Other OPEC members like UAE are gagging to pump more and have the capacity to do it, as does Saudi who could quickly open the taps if it suited them.
Yes Ida did stop a fair bit of production in GOM, but it’s coming back on line, and US shale oil could flood the market. The US rig count has steadily been rising but that’s been ignored the last few weeks.
Inventories have been falling for a reason. With Crude in the US it’s because of the temporary effects of Ida. That will (has) passed. That’s why you keep stockpiles! They’ll get restocked over the next few weeks when supply comes back on.
The spike in gas prices is mainly due to Russia flexing its muscles and restricting supply. Once they’ve made their political point and the price is high enough, they will resume pumping and the price will fall. This whole talk of oil being used instead of gas is complete nonsense as the vast majority of power stations and end users won’t be able to do it as it requires completely different systems!
All this talk about demand is also being hyped up. Asia imported less oil this September than they did in Sep 2020 and Sep 2019 - but that doesn’t make the headline news as it doesn’t fit this weeks narrative!
Oil traders are also going to ‘remember’ the link between the strength of the dollar and the oil price soon. It’s already spiked up today, and could go even higher with the markets so jittery and when the Fed announces the start of tapering. Oil doesn’t usually do well when the USD does.
The whole move up to $80 was hyped up so traders and institutions could line their pockets, and they are all probably reversing their positions now to profit as it quickly tumbles down again. It’ll probably settle around the $70 mark as that seems to be the sweet spot for the underlying fundamentals, but we’ll get plenty of spikes above and below that so the speculators can keep coining it in.
As for BP, it’s had a great run the last week, and I’m a bit gutted for getting my timing wrong by a couple of days and selling out at 319p, but the SP is overbought in the short term on a technical basis, and if the poo does drop then it will follow it down. You’ve got a shooting star candle on the daily chart at the top of a big rise with the RSI in overbought territory, and a gap to fill at 331p. If today’s low is taken out then there’s a very good chance this will drop a fair bit.
If it does then I will buy back in, as BP will have strong cash flows in the short/medium term even with Brent at $65-$70
“ Oil is a commodity pretty much perfect competition pump and dump doesn't exist in commodities”
Ha ha ha! Pull the other one! Pump and dump May not. Plenty of other shenanigans including trading on leverage and Options provide a means to manipulate.
Oil is a commodity pretty much perfect competition pump and dump doesn't exist in commodities
Hmm not sure where you get that from. Not much underpinning your thinking there.
Pump and dump. Wheres the pump? This isn't AIM jam tomorrow. The cash being banked every day beyond what anyone predicted
Thank you Ceders for the additional clarification. I value your input and postings and appreciate your knowledge.
I am fully in cash at present after selling out last week. I feel that the rate of poo rise and subsequently BP SP rise is too soon too fast. When the rest of the market is looking so shaky across all industries I am banking on a correction and shake out to enable growth from sensible valuations and reinvest opportunities, but what do I know...your thoughts ?
MR lolol , of course ;)
Gaps are sign of the market going ahead of itself, FOMO fear of missing out, energy prices were pumped by traders , likely to take profit sooner than later, we have for Brent gaps at at 77usd and 72.50, they will close.
Although BP has had a good week ( pump and dump possibility according to Cedars) Markets are going nowhere. No new money entering the market. US markets proper overvalued maybe not in UK but the ftse is a slave to US market directions.
US government funding turmoil, numerous global financial credit concerns.
So even, missing out on BP's week gains, I am happy to be fully out for the next few months.
Ceders is simply looking for a cheeky drop in price to buy back in ;)
Please elaborate a bit more for those less able to read between your lines or understand the point of your post.
Maybe I'm the only one unable to understand. Are you saying that the SP is being artificially pumped in value and when PI's invest in the belief that " this time its different " the shares will be sold and the SP dip ?
If so, why is that your opinion please.
Do you sense a correction ?
Hmm not sure where you get that from. Not much underpinning your thinking there.
Pump and dump on energy commodities, oil price rise is full of gaps , sign of FOMO!
Yes we've all seen many false dawns with the SP over the last 18 months.. but this rise feels different, backed up by a surge in demand and a huge uplifting of the oil price. With the world economy opening up again, flights slowly getting back to some normality and what will be stella profits for BP , I think we're in for a sustained period of SP correction. It may drop back a few pence but the sub £3 days are over IMO. We'll see £4 sooner rather than later.