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If Marks 11 million barrels were true, your 50 million barrels could all be used up by end July.
We may start to get a bit more clarity around then,as driving season will also be a bit more visible.
If the market does turn sentiment will change quickly.
We are only one Black Swan event away from carnage, which probably would lead to the recession.
I was just looking at the US oil stocks again and although the SPR should hold steady now after the historic releases, the non-SPR stocks have 50 million barrels they could draw down before they hit the post-2015 minimum*.
We could see a few further weekly draws in July before they start levelling off and people start wondering where the oil supply is going to come from.
If anyone is bearish oil please could they put their reasoning forward, there seems to be reducing supply going forward and demand will have to fall pretty fast for the price to stay stable. Are we close to a global recession?
*For example we are at 453mmb but they were 414mmb in December
Good morning all
Excellent posts Planit.
Competition 2023 Christmas ( Bottle of Champagne for winner)
Christmas 2023 Owls £4.71
Christmas 2023 Neil 74 £5.33
Christmas 2023 Harmonica £5.50
Christmas 2023 Rjb 92 £5.55
Christmas 2023 Redjim £5.65
Christmas 2023 GoodTo Go £5.70
Christmas 2023. meoryou £5.78
cChristmas KPMAN £5.83
Christmas 2023 Jakers £5.85
Christmas 2023 MarkGo £5.90
Christmas 2023 Happy investor 100 £6.00
Christmas 2023 ClydeCrusadeR £6.25
Christmas 2023 Spights £6.45
Christmas 2023 y11 £18.20
We also have the Saudi's 1mmbpd cuts start in July. Plus, the increase in interest rates has increased the holding costs for oil driving some one-off supply on to the market.
Oil demand is now higher than 2019 but it looks to me like supply is lower. If oil doesn't start moving higher within the next month I will have to relook at my understanding of where we are.
Good comments from yesterday, I agree with everything MarkGo and Spights said but would like to add
For a bit of context, although the draw down this week was very large, reserves (commercial + SPR) are still 9 million barrels higher than the bottom which was hit December 30th. There were some big increases in Jan/Feb that have not worked their way out yet.
But MarkGo's thoughts regarding where we are and what will happen in the future match mine. I am pretty excited to see what happens to prices now the SPR sales are done and we are at driving season. I would also add that hedge funds and other investors have been shorting futures contracts as they think there will be a recession, this has helped supress the oil price (this is the paper part MarkGo referred to). I wouldn't be surprised if the US gov pushed this to help with the war effort.
The US shale rigs seem to have been increasing efficiency over the last few year so the output per rig has been rising so the drop in rigs has not affected output as much as it might sound. But I do think there will be a levelling off or slow down towards the end of the year because the price of gas especially has reduced confidence and investment.
Competition 2023 Christmas ( Bottle of Champagne for winner)
Christmas 2023 Owls £4.71
Christmas 2023 Neil 74 £5.33
Christmas 2023 Harmonica £5.50
Christmas 2023 Rjb 92 £5.55
Christmas 2023 Redjim £5.65
Christmas 2023 GoodTo Go £5.70
Christmas 2023. meoryou £5.78
cChristmas KPMAN £5.83
Christmas 2023 Jakers £5.85
Christmas 2023 Happy investor 100 £6.00
Christmas 2023 ClydeCrusadeR £6.25
Christmas 2023 Spights £6.45
Christmas 2023 y11 £18.20
Xmas 2023: 550p.
Can you put me down for 533p please?
MarkGo need your entry :)))
Mark need you entry :)))
HI MarkGo, meoryou & all
This is getting very exciting. The last quarter of this year will be very exciting for us
Below the competition
Competition 2023 Christmas ( Bottle of Champagne for winner)
Christmas 2023 £5.85 jakers
Christmas 2023 £6.45 spights
Christmas 2023 £5.78 meoryou
Christmas 2023 £4.71 owls (although I'll be out by then)
Christmas 2023 £5.70 GoodToGo
Christmas 2023 £6.25 ClydeCrusadeR
Christmas 2023 £18.20 y11
Christmas 2023 £5.83 KPMAN
Christmas £6.00 Happyinvestor 100
Christmas 2023 £5.65 Redjim
Christmas 2023 £5.55 Rjb92
Hope I win
Bottle of champagne for the nearest winner :))))))
US Crude Oil Inventories
HI meoryou / spights & all
A 9.603M draw is HUGE. The estimate was for a draw of only 1.75M.
Last week's draw was 3.8M against an estimate of 0.3M so you can see the trend and we are not into peak summer demand of July/August. In addition the SPR releases end this week. Without weekly SPR releases Inventory draw swould be higher by approx 1.5MB as they are not included in draw data so in effect without the SPR release the demand and draw would have been over ....
11 MILLION BARRELS !
I expect hiccups along the way but with SPR releases ending, peak summer demand still to come, Opec cuts hitting the table in July, I wonder how many traders shorting oil will take their profits and close their positions.
This ' should' be the catalyst to move oil equities north especially when equity traders return to their desks in September.
At least I hope so.
Great evening all
Https://oilprice.com/Energy/Crude-Oil/Oil-Ticks-Up-After-EIA-Confirms-Huge-Crude-Draw.html
9.6 million barrel draw
Oil bounced up. I guess the EIA inventory report due to be published later today has possibly been leaked.
Morning meoryou.
Absolutely. All feeds in to the conundrum.
I previously head scratched to the following question, if oil demand is fine then how can the price of oil be suppressed and so volatile ?. In previous decades oil never moved as much as today. Wild daily and weekly moves were unheard of...... enter the traders
I've been reading......
There are twi markets for oil. The physical market, which is the largest commodity in the world, and the financial or paper market for oil, which is ~30X bigger than the physical market. There can be times when the physical market is healthy, as measured by inventory trajectory, yet the financial market for oil is weak, due to things like fears of a recession or regional bank failures. Given this 30:1 ratio, the "tail can wag the dog", and weakness in the paper market can temporarily overwhelm positive underlying fundamentals in the physical market, leading to price falling below what can be fundamentally explained.
If we are directionally accurate in the magnitude of inventory draws coming in the second half of this year, we believe the strength in the physical market will overwhelm the unbelievably negative sentiment in the financial market for oil.
Again, time will tell.
Have a great day
I find you can ignore most trades shown after 4.30
The £37 million trade was a UT trade.. I'm gonna presume the one at £123 was the same.
Add in slow drop in rig count in US Over the last 8 weeks.
71 rigs less than a year ago.
Good morning all
I've been monitoring the weekly US crude inventories. The last few weeks data shows increasing draws although the figures are skewed by SPR releases and manipulation to keep oil depressed. Adjustments are made to data once the oil price has been controlled is one such manipulation.
These releases are coming to an end this week. I believe that only 1.5m is left to be sold this week w/e 30th June as mandated by congress this completes the sale. A turnaround to replenishing the SPR commences in July.
What we should see going forward is weekly increasing draws from inventories , together with an end to SPR releases and replenishing this should bolster the price of oil as we move into H2, peak summer season and in turn oil equities.
Against this? those who seek to keep oil low for political ends will continue to attempt to manipulate and depress the price with repetative narrative of global slowdown, recession, interest rates, possible over supply under demand, weak China etc.
Oil 'should' start stabilising and then rising over the next two weeks is my uneducated guess and, if so, oil equities as well supported by a return to trading desks in September. Time will tell !!
Good luck all
Not sure selling , someone bought £37 million today and pretty sure £123 million purchased at 464 per share later as well.
Meoryou,
Yes, the consolation is that it’s not BP related. We are in good shape to recover when confidence returns. Meantime, we just have to groan as every other day a few pence gets knocked off Sp.
T
T