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Why would they be undercutting Oman prices....? Considerable loss of
potential profit..
I'll take a buy back if it's undertaken properly but this payment issue potentially puts an enormous spanner in the works on all fronts. Note the potentially btw
I’m not sure about buy backs for companies like these. The last buybacks and the ones on GKP haven’t seemed to have much effect except temporary ones
The company has said in the past it is hesitant to conduct buy-backs, because it doesn't want to reduce the free float to a level which is off-putting for IIs, (they need liquidity and there's about 70% of the share capital in firm hands).
Buybacks can work if they're fully committed to and executed coherently, the last one was neither. The wider landscape (feee float, ii's etc.) is all just part of the decision making imo - if it isn't likely to benefit existing holders they shouldn't do it. The question with any buyback is how long you leave it before measuring success....
Why would they be undercutting Oman prices....?
Partly transportation costs plus a discount for being unapproved by Baghdad .
A good day for G - tracking the likes of RDSb and ahead of GKP - which we must remember has been supported by buybacks.
https://invst.ly/p5-fk
Let's not forget that from 8th November - ok that was a two day spike! - G is down 26p whilst Brent is up $4, equivalent to 12p in G sp - so G is down nearly 40+p in terms of market pricing for no practical reason other than a KRG payment delay and a week old 4p ex-div. Even if we assume the spike was overdone, G should be over 198p today (allowing for ex-div). Potentially, of course, G might be 125 +12 = 137p today, but let's not get too logical about the market!
Although G doesn’t necessarily track RDS, it often appears to take a cue from the direction that RDS is moving. Today, for example, RDS has been consistently falling whilst G was positive at first but eventually turned to shadow the major’s trend…
Last five trading days, comparisons: https://invst.ly/paxvq
Not a very interesting day. In fact OP was turning sharply down as the share market came to a close.
Whilst some of us do tend to moan about G - it's an inevitable consequence of watching it too closely - it's worth remembering that things could be worse and, as we saw in November, stand a good chance of getting much better if a couple of niggles get sorted in January .
Here's G v Brent(x3) , RDSb and Chevron since around the end of July: https://invst.ly/pb4d1
With the end of month roll-over in futures 'front-month' pricing, we are in the period when Brent prices from different sources can vary by up to $2. The two green lines here show the sudden divergence between crude (like OANDA or XBR) and London Futures 'LCO'.
https://invst.ly/pc9kw
The gap invariably closes over several days. Oil Co sp s seem to respond to the average.
In terms of closing prices*, G hasn’t moved much in the last fortnight - consistently closing in the 186-190 band since the 18th December. That’s quite a narrow range for G. Although there have been intraday flicks up to 192 (after opening prices as low as 183.6), there seems to be no sign of a serious move above the blue dashed ‘intermediate’ trend line here, https://invst.ly/pcex0 , which I’ve moved down to better reflect the current position.
There’s plainly little market enthusiasm for RDS or Chevron either as, like G, they have both fallen behind Brent’s advance in price since September.
*this was posted before today’s close
The killing of Soleimani is a significant event and it remains to be seen how Iran's influence in Iraq will develop from here. Given the geopolitical dimensions, the market seems very wary with G and GKP hardly reacting to OP's boost towards $70 and remaining pretty flat over the last five days:
https://invst.ly/pcz3v
It does mark G's worst performance with oil at near $70 for a very long time.
Boyobach,
Not sure what it means for US influence in Iraq either!
Yes, Ocelot.
Soleimani was clearly a major influence in Baghdad and in Iraqi military affairs- and seemingly had a hand in the KRG crumbling after the referendum two years ago. The Kurds are hardly likely to benefit if US influence diminishes further.
I see it as the usa is determined to take Iraq back from Iran control and these events were indicative of their seriousness in the matter..
I predict Iraqi puppets government will be toppled and the wild Iranian backed militias who in practice control the army and government apparatus will be punished and removed from power.
USA will prevail and Iraqi wealth will be channeled back to the west mainly and its nations.
Kurdistan will be a beneficial party as its alliance with the usa is very strong and anti Iranian influences which is obstructing their negotiations with the central government that is going to be replaced soon in my calculations..
DT wants to see Iraq back in their hands where Obama left it and handed to Iran after pulling Americans troops from Iraq.
Patience is required...
Soleimani seemed to be everywhere: Iraq, Syria, the Lebanon, ...
I'm not sure Trump's strike isn't an admission of the US's relatively weak position in the region.
The principal beneficiary, once again, is likely to be Putin.
You could well be right Hasiba.
But Iraq remains a mess - corruption and foreign interference continue to deny the people's rights to live in peace.
.... seemed to be everywhere: and, almost certainly, the attack on Saudi oil installations.
Ocelot...
The middle east spoils has been agreed already between Putin and DT imo..
Iraq is for USA because of the oil mainly.
Iraq is only exploiting 25% of their oil resources by producing near 5 mbpd but has the capacity to produce far more . Even the 5 m barrel daily production income mostly stolen by Iran and the corrupt elite in government and strengthen the pro iranian militias. The ordinary Iraqi people are not seeing any benefits from their oil....poverty is rife...hospitals and education in dire state, infrastructures are more or less ..non existent
The USA now has only one choice is to confront Iran and kick them out of Iraq with the Iraqi puppets government serving the Iranian expansion and militias...
This is the beginning of the end of Iranian influences and tackling their criminal militias .
I am not pro USA policy in middle east for decades and they have caused mayhem there but can see where this is going...just imo.
Oil price is now well underpinned and going in one direction...
hasiba,
Agree with your last sentence, not convinced by the rest: Trump was elected on a platform of reducing the US's overseas commitments, not of increasing them.
Ocelot....Shale is a temporary producer and is predicted to decline rapidly in five years time and USA need vast oil resources to continue its industry and power..
Oil is their most important essential for survival and influence....Iraq,SA are essential countries and the 2003 invasion of Iraq was for the control of oil but they have lost this because of Iranian influence in Iraq...
Will we see OP at $80. ..I think we will!
Attacks on the US Embassy were the last straw. The sectarian militias are out of control and Baghdad's reliance upon them - which comes at a hefty price - is key to the power plays within Iraq. It's a pity that Iraqi's can't resolve these issue for themselves. Will be interesting to see how this affects the militias in the north, around Kirkuk and the disputed areas, where ISIS remains a threat.
I completely agree with you Ocelot. DT can t really do much in ME. His lack of consistency has weakened the US position in the region ; withdrawing from the syrians border and leaving the kurds to the mercy of Turkey; withdrawing firces from the region .... now sending back some more ... The iraqi (in their majority) do not want american soldiers on their land and therefore it is only a matter if tome before they are quicked out, meanwhile DT actions are highly dangerous. This could really turn out badly ... I would not like to be in the place of American ambassy personnel in Irak.
As for Genel, Hashiba say it is good for it ... I don t it. This really makes the resumption of payments in danger....
I hope it calms down soon but I fear the troubles will be worse before getting better. Let s see if Genel manage to avoid the rain drops in this storm.
Good luck all.
I agree with Tartine regarding the market reaction. Current events in Iraq do not improve confidence in the likelihood of payments resumption, which presumably depend on the delicate issue of 'KRI oil for ICG budget share'
During the last quarter, G's 'average to top' performance against OP was 3.0x to 3.6x the $/bbbl price ie 207 to 240 at $69.
Bunks recently asked how much the resumption of payments might be worth IF it happens - to me the answer looks like at least 25p on today's price.
GKP is +0.7% and DNO +1.2% today, just saying....