We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Fair comment Leem - but check out the FTSE100 in the last chart ( https://invst.ly/quc9q ) . Oil and Oil Cos fell well below the market at the low point so need to rally more to catch up. To be fair, G has performed extremely well -it fell well below RDS but has overtaken it on the way back up. The real test will come at 130p - what OP will be required in order to shift G across the gap at 137 and back up to 150+ ?
I’m still utterly stunned at how well the market is doing including oil Boyo. It’s rallying like the economy is booming makes zero sense
An 'averagely good' day so far, with 118 the nominal top for this month (yes, it does go a bit higher to 120 at times): https://invst.ly/quce9 (15minute chart)
In early April G was nearer to 130p with Brent above $30: https://invst.ly/quc9q
My instinct has been wrong up to now, Hydrogen. Although it seems obvious that the Futures and the Forex 'spot' must re-converge at some point, I had thought that re-convergence would have occurred by now. However, I'm naive enough to believe that WTI could not have climbed to nearly $30 if last month's disaster was about to reoccur. So maybe what happens is this: WTI undergoes a 'normal' (non traumatic) expiry adjustment as the contract rolls over and the XBR 'spot' price then snaps back into alignment fairly sharply because the market's price mechanisms will ostensibly have stabilised. That would also be the best outcome for us
I think a near term jump back to $40+ (Brent) could be optimistic because of the massive inventory excess which will take months to burn through . It'll be interesting to see how 'driving season' demand in the US proceeds if lockdown is lifted: I guess it could either be suppressed by continuing COVID fears and weak household finances or enhanced by people's urge to make up for their weeks in lockdown. This is usually the season for OP to be strong - so the best time to see a bounce back..
With just a couple of trading days to the WTI contract expiry next week - the event that caused mayhem for WTI last month - it is intriguing to note that the ‘over the counter’ Forex Spot WTI/USD rate (blue at $10) still appears to be well out of sync with the front month (red at near $30) here:
https://invst.ly/qtskd
This appears to be a very abnormal state of affairs as the two prices ordinarily track each other closely (as this five year picture demonstrates: https://invst.ly/qtt-r ) It implies that physical WTI can currently be acquired for just $10/bbl - about a third of the futures price.
Quite what will happen to the two prices as the expiring CME futures contracts transform into physical oil will be interesting to see.
.....the full week for the usual bunch : https://invst.ly/qtksw
A mixed bag week, although generally heading downward to 109 except for a swift quick profit opportunity today following yesterday's low if you were inclined and awake in the first hour(15 min chart). G seems quite solid, however, in the 109-118 trading range despite the mentioned blip down to 106
https://invst.ly/qtky8
Here's the full week for the usual bunch (again a 15 min chart) - noting that RDS went ex-div yesterday, GKP struggling for some reason. Note that G doing OK compared to peers but, nevertheless, weakening against OP as the latter strengthens:
ttps://invst.ly/qtksw
Sensing that G wasn't likely to go much lower leading up to ex-div, I added yesterday at 107.
123 looks like a possibility if payment lands on schedule and OP continues to firm up:
https://invst.ly/qte8z
For those minded to buy (I wasn't) the drop to around 108 offered one opportunity.
The 109 support looks pretty firm - with 99 maybe destined to be the ex-div low?
https://invst.ly/qsc9k (15 min chart)
It will be interesting as the story unfolds approaching, in order of events, the WTI expiry , G's AGM and ex-div.
The G:OP very gradually dropping back towards 'normality' - now around 3.8x: a trend I'd expect to continue if OP recovers.
Things obviously deteriorated when the market opened just 20 minutes after that last post!
https://invst.ly/qsa9v
Just a week to go now until the next WTI contract expiry:
https://invst.ly/qs9b1
Of the usual bunch, GKP has been rather volatile and is currently down around 8% since Thursday’s close, whilst G is 1.5% down :
https://invst.ly/qs51-
I'm doing neither at the mo Leem as the price is in 'no-man's land' for me. I sold a few around 117 a while back anticipating a buy back around 105 which didn't materialise - so I 'banked' the cash in RDS when that hit last week's low.
I would still probably top back up at 105 or if RDS rises sufficiently ahead of G to make a swap back attractive (unlikely in the near future IMV). The gap from 131 to 137 clearly presents a marker - the assumption would be that if OP recovers sufficiently then the gap will suddenly fill and the sp might move up a level to possibly trade in the 140 to 170 range. So that discourages me from selling any more at present.
another great finish eh
Hey Boyo are you buying or selling? The Boyometer seems fair price and I have no clue what the market is so optimistic about at the moment
WTI heads up towards $26 but will that hold at the contract roll-over on the 19th? Let’s hope so but remember that those who hold a contract at expiry have to store the oil they’ve just bought (currently at over twice the spot price if the Investing.com data is to be believed) or find someone to buy it pdq.
https://invst.ly/qpuk7
How does that circle get squared? Well something has to give - let’s hope it’s the spot price. Maybe it’s going cheap today to make room for the new stock arriving in late May.
Meanwhile, since last Friday’s close, RDS, Chevron and GKP are about 6% up, although GKP has made a volatile song and dance about it, whilst G is more subdued at around 3% - in line with the FTSE100 - and DNO is actually down 2%
https://invst.ly/qpu-h
Enjoy the BH and Boris' speech.
Interesting to see G’s sp fall back against a stronger OP this morning. As I write, G is only around 3% up on last week’s close but Brent is nearly 20% up. The sp has absorbed much of the fall in OP since February and, unless there is a significant change in G’s fundamentals, this will need to be given back as OP recovers.
Yes , WTI (June) continuing upwards today, pity Spot didn't get the memo: https://invst.ly/qor8h
The two flavours of WTI added to the usual comparison (since last Friday's close): https://invst.ly/qor7s
I'm slightly peeved that G is progressing so well compared to RDS - having piled into the latter on Friday.
A very definite rise in WTI (June) to $22+, as Ocelot points out with less reaction for WTI Spot, which remains below $10. I guess this means that holders of the Futures contract are confident that they can either take delivery or have a buyer lined up for a fortnight's time. This rather implies that the Spot price is set to rise sharply at some point . The alternative , of course, would be a repeat of last months collapse. https://invst.ly/qoj7l
https://oilprice.com/Energy/Oil-Prices/Goldman-Sachs-Predicts-51-Oil-In-2021.html
Futures rose as much as 3.9% in New York Monday, before paring gains, after Genscape reported a 1.8 million-barrel build in inventories in Cushing, Oklahoma, the delivery point for West Texas Intermediate crude. The June contract had earlier fallen as much as 8.8%. If the U.S. government reports a similar number, it would mark the smallest increase at the hub since mid-March. (from a Bloomberg article)
An uninspiring day, with G losing about 1.5% since Friday's close. RDS making a feeble start at recovering from last week's dividend disappointment and gaining by a similar percentage: https://invst.ly/qoa7b
About half way to the next WTI expiry and no real sign that the June contract is converging with the spot price, which isn't encouraging : https://invst.ly/qoa58
I was amused by this headline, Ocelot:
'The Great Shale Shut-In Has Begun, Making Good on Trump’s Pledge'
Trump was, of course, in no position to fulfil any such pledge - he had no mechanism to bring about Shale shut-ins. Market forces ensured that the inevitable eventually happened.
Another throw-away comment in the same article is this:
“You cut out what’s easiest to cut out. Right now that’s the Permian -- you lay down the rigs, walk away and you can always come back to it,”
The fund manager who said that is either unaware of or dismissive of the damage done to shale wells that are shut prematurely. It's one reason that US Shale production has not been turned off as rapidly as market circumstances seemed to warrant.
https://arstechnica.com/science/2020/05/heres-why-the-world-is-still-producing-more-oil-than-it-needs/
We may have little sympathy for the US Shale companies that have mismanaged the resources for a paltry profit but the crash they precipitated comes at a devastating cost for many of those invested and employed in the industry:
https://www.houstonchronicle.com/business/article/Oil-Houston-barrel-West-Texas-price-cost-money-15239867.php
Exxon to cut production by 400,000 bopd (10%) in Q2, Chevron to cut by 200,000-300,000 in May, by 200,000-400,000 in June.
Exxon's Q1 loss was its first quarterly loss in more than 3 decades.