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Our conclusions are confirmed. :) This is what an (Vital) Oil Traders says:
https://oilprice.com/Latest-Energy-News/World-News/Heres-What-Oil-Traders-Are-Doing-To-Profit-From-Ultra-Low-Oil-Prices.html
Must watch: https://www.bloomberg.com/news/videos/2020-03-25/vitol-says-oil-demand-is-down-as-much-as-20-million-barrels-a-day-video (See the first two interviews)
They talk about 3 months, and if production will not be stopped (which is hard, can't 'switch off' a well like that) we will see $10,- in this period. But not for long I think of course, imo.
They did not talk about an agreement of course. If that would happen, it's another (better) scenario.
yep, agreed
So, since April and May will probably the most destructive months in terms of the oil price-fight, maybe even in terms of a Corona Peek (in Europe, hopefully May for the US?), Tullow should not be worried that much… agree?
I agree with u, corona is the thing killing shale.. my only worry is that shale will be saved again, but ofc the production will suffer huge numbers... I’ll be happy with a 60% drop by summer
Shpunken, you can look at it from two angles. I agree with you, but what also is a fact: shale never made a profit. So maybe Russians aren't able to defeat Shale, Corona is!
So Corona is fighting against Shale, more than SA and Russia together probably. Result: Shale diminished.
I think that that agreement (and returning of higher oil prices ) will happens as soon as Shale is seriously wounded… somewhere in May? After that there is no incentive anymore for SA/Russia to keep prices low (market share back to them, thanks to Shale being mostly gone). Agree?
That is why a tariff now is being touted by some, because Shale needs help in almost ANY scenario? Agree?
Marcel.
Nothing happens regarding oil in Russia without sechins approval.. this fat ogre kept saying that they will also increase production to counter saudis lol but in reality and I know this for a fact, the max capacity to increase production is around 200kbpd, which is laughable.. they haven’t invested in their own industry since the Crimea circus as literally all the money is being used on that and Syria... there are parts of Russia where ppl have no gas ffs and petrol costs astronomical amounts because of its shortage... So trust me, Russia has no chance of winning this war.. plus only positive regarding having the fat clown in the White House is that he will do everything possible to bring bk order to the market to win the election, so am not worried at all about the oil price long term
Shpunken, You could be right. Read this article that suggest a tariff on oil (and so help Shale, and heep energy independence):
https://oilprice.com/Energy/Energy-General/An-Oilmans-Plea-To-President-Trump.html
"One last point worth mentioning is that energy independence was about to fall apart anyway. The present structure of shale wasn’t working—“present” meaning two months ago. Producers can’t generate free cash flow, pay off ridiculously (and irresponsibly) large amounts of debt, and grow reserves at the same time, at least not if they want to stay listed on the NYSE. The industry was already struggling at $55 oil and $1.80 gas. Everyone was hedging every time there was a little bounce. Service companies in the shale sector were being squeezed into unprofitability. Leave natural gas alone for now but fix the cost of oil. If too much is produced, it can be sold and exported at whatever the going rate is.
Should there be naysayers, those that say this is nothing more than a bailout request, I say so what. It is and it isn’t. Prices will be low, but that will fix things and then there will be another mad rush to produce because prices will be high. Trust me. It happens every time. Boom and bust. Go to an energy conference and you will find all the producers talking about their humongous acreage position, and all the frackers talking about their humongous horsepower. Margins and profits won’t come up. Trust me. We can’t help ourselves. "
He says that currently the demand is so low that even the SA increase in production is just 'a drop in the bucket' and the Russians, indeed, have hardly the position to add serious amounts of oil to their production.
Marcel, sechin is the reason why oil is this mess to begin with.. Russia won’t win the fight against shale, they don’t have enough resources to do that... if it wasn’t for the virus they would’ve had a very good chance of doing that, but with significant reduced demand, they won’t last... they will cave by may and sign the agreement with opec if the world is still in lockdown
BAM!!
https://oilprice.com/Energy/Energy-General/Russias-Plan-To-Bankrupt-US-Shale-Could-Send-Oil-To-60.html
"As soon as U.S. shale leaves the market, prices will rebound and could reach $60 a barrel, Rosneft’s Igor Sechin said recently."