Member Info for Boyobach

Good luck Hasiba.
If Brent continues to slide then you may well have got out in the nick of time.

With Brent experiencing its largest weekly drop in three months, https://invst.ly/s1jv1
it’s not surprising that G remains flat at 113-118, around 16p below its average performance against OP.
The weak market climate together with very weak OP are dominating at the moment and the already slim prospects of seeing $50 Brent in the remaining months of 2020 have been wiped out for now, with the average for the whole year set to be a meagre $43. It’ll be interesting if we get a BSD in the present circumstances.

Well done Broadland. It wasn’t much of a week was it? and perhaps we should be grateful it wasn’t worse:
https://invst.ly/s0vmt
G was actually up by 2% over the week - largely thanks to prices this afternoon, including the end of day auction, which was only worth £27k. All the others in negative territory, with Brent -7% and DNO -10%.
No US market on Monday to look forward to, so perhaps a quiet day.

There’s very little in the news to suggest that OP is going to pick up, either - quite the contrary: https://uk.investing.com/analysis/with-oil-price-in-a-holding-pattern-3-factors-could-trigger-its-next-move-200446167

NB this quote from the article:

Iraq has reduced exports from southern Iraq significantly over the past 2 months, but exports from the Kurdish autonomous region in the north have not been curtailed.
It seems that despite significant pressure, Iraq is simply unable to comply with its quota restrictions, both for financial reasons and because Baghdad lacks the authority and power to control what goes on in northern Iraq.

Date Typo: 'it’s worth noting that G, GKP and CVX are all below their 11/6/20 ‘recovery’ levels ' despite Brent being nearly $5 up since then.

With G and other energy sps, being pretty weak at the moment, I thought it worthwhile to post my quick ‘reality check’ chart for G with a quick recap on why I use it.
This chart compares G to Chevron (CVX) and Brent re-based to a date which provides useful and consistent comparison lines. GKP is also shown to provide KRI context and sentiment. https://invst.ly/s0cuk .
Why Chevron? Well as a reference Oil Co it has recently reflected consistent good performance within the industry, where US based majors have tended to outperform European counterparts like BP and RDS. Using this particular re-base point (4/10/19), G has - on average - tracked CVX fairly well, with clear periods of relative strength and relative weakness. The chart naturally confirms G’s current weakness but history suggests that this will not last indefinitely, although it could take a couple of months to cycle through..
Likewise, the Brent line traces where G would be at around 3x Brent - a fairly undemanding and ‘below-average’ ratio which G usually rides above.
Historically and in the absence of new negative factors, G will normally cycle above both the CVX (dark blue) and Brent (green) lines, up to a max of around +20p.
So, given today’s OP and the market position of CVX, G might have continued trading around 140 p +/- 10p. G’s current weakness therefore seems to have much to do with the market in general and it’s worth noting that G, GKP and CVX are all below their 11/6/06 ‘recovery’ levels (date marked red) despite Brent being nearly $5 up since then.

Welcome back comonvog. Returning buyers especially welcome right now!!

Yes Hasiba - given you were planning to exit anyway and on the verge of a paper loss, moving 50% from G into something you feel will move positive quicker than G could be a good move. I hope so - especially as I have a mutual interest in seeing RDSb recover - although I have to admit I'm not convinced it'll move faster than G in percentage terms, which is why I haven't added more yet. If I had a bundle of cash profit from a trade (I don't currently) then RDSb at the current price might have been attractive, although it looks as susceptible as G to dropping a bit further IMO: https://invst.ly/s08ih . RDS has been in decline for nearly three months and it's always a warning when you find yourself thinking 'it must recover soon and it can't go much lower'. G to 150p from here is around 33%. That’s equivalent to RDS reaching 1385. It’ll be interesting to see which gets there quickest. I hope we'll both be happy whichever it is. ATB.

Hard to tell Leem - 110 has tended to be pretty firm in the past, as I've discovered previously when waiting to buy at 100 and eventually having to pay more. Certainly can't be ruled out - the market is generally in a bad place right now, it seems very vulnerable to any whiff of bad news. Mixed messages from the US regarding OP currently: EIA crude inventory lower than expected but gasoline demand also down with COVID recovery quite muted, the US 'Driving Season' effectively over and refinery maintenance season about to kick -in. Very few positive indicators, it seems.

Brent is not looking good:
https://invst.ly/s05-g
Given that G had been pushed onto the rails at 115 and is now moving below that level it's best to assume that 120 is unlikely this week and Friday Club favourites - as is often the case - are at the low end of the range.

this isn’t going over 120 until Hasiba has finished unloading....
Given that Hasiba represents a large group of like minded sellers, you are more correct than you possibly realise. Support levels represent a market limit. Until the number of sellers at that level is exhausted the price will not rise. However, as it continues it also creates pressure for more sellers to come forward if the price begins to look unsustainable, potentially pushing the price down.

The closing price becomes more interesting in certain circumstances:
https://www.youtube.com/watch?v=eQMRDpiLqRo

The UT is the outcome of an auction involving multiple trades. The end of day auction represents the consensus value of multiple trades conducted in full knowledge of how that day's trading has proceeded and is normally more representative than a single AT. If it lands in ‘new territory’ (beyond a support or resistance) then it is of interest. If it lands within the longer term trading range then it may become significant if it subsequently proves to have been a turning point.

Since Friday, G’s sp has flirted with apparent support around 115 and yesterday’s UT was effectively ‘on the line’ so it didn’t indicate a turn back upwards and left that question open for today. 15' view: https://invst.ly/s05hf

Bizarre as it may seem in a rubbish week, G is top of our weekly board from last Friday’s close https://invst.ly/r-ym0 , which only underlines how badly the others are fairing. Here’s the running order from 1st March with BP + PMO added: https://invst.ly/r-ywi .

I reckon today has seen the worst drop in Brent in just over two months which has pushed OP to the brink of falling out of the trend that has brought it steadily from around $40 in late June. So prospects for the remainder of the week look uncertain at best: https://invst.ly/r-yn4 .

It’s Labour Day in the US next Monday and the end of ‘driving season’ so let’s hope there’s some other stimulus in the pipeline.

Bit of a flash in the pan from GKP maybe? G ended the day better than GKP but the Kurdish companies all did better than the majors, both RDS and CVX, along with the FTSE100, down on Friday’s close but the others in + territory
https://invst.ly/r-98l
I’m already happy with my gain from Friday - mainly because buying G caused me to get out of VOD - at an equivalent sp - which has been a waste of time recently and has promptly dropped by 8p at today's close.
I see the consensus of the Friday Clubbers is 121? Seems fair enough to me. G seems to be in the low phase of its 2-3 monthly cycle so I don't need fireworks. just the usual pattern: Plus ça change, hopefully.

Cheers Hasiba - and very good luck in the future. Thanks also for posting about CWR - that has proved to be a very useful avenue for me.

Whilst the KRG may well be imperfect, the ICG is hardly a model for high ethical standards either, Hasiba. Duplicitous behaviour to gain support only to renege on commitments seems to be the Iraqi way at the top. There are always accusations and counter accusations flying between Erbil and Baghdad and I don't think we are well placed to make judgements either way On balance, the KRI seems to be a relatively stable region within Iraq and the KRG has made steps towards establishing it as a reasonable, if imperfect, place for IOC's to do business. Whatever their own failings, they have also been severely hampered by events beyond their control. When we invest in G we necessarily accept all this baggage - we can moan about it but we can't change it.
In addition to all the above, GKP's story includes internal issues duringTodd Kozel's era which appear to have been glossed over with time. Despite the 'clean slate' of 2016, which effectively wiped away its PI's as well as the debt, it's not a company I'm inclined to invest in.

Regarding Kirkuk, we should also remember that Iraq’s state-run North Oil Company (NOC) was not a safe place to work in 2015, especially if you were at COO level and investigating corruption within the organisation. I doubt that any of at least three assassinations ever resulted in arrests, let alone convictions. As one anonymous employee is quoted as saying:

“Until now we have lost three officials and more to come. North Oil Company is becoming more of a mafia courtyard rather than a state-run firm.”

If oil was ‘going missing’ it seems it would be a difficult trail to follow with few volunteers for the job.

https://uk.reuters.com/article/uk-mideast-crisis-iraq-kirkuk/iraqi-state-oil-firm-official-shot-dead-in-kirkuk-city-police-idUKKBN0TX0ZZ20151214

It should be borne in mind that K24 is effectively a mouthpiece of the KRG - its founder is apparently Masrour's press secretary. If Baghdad enters into a formal dispute regarding Kirkuk oil for the period in question (I didn’t actually see any mention of this whilst scanning the article - did I miss something?) then it will be a legal tussle for years and, I would say, a classic ruse for continuing to withhold the KRI portion of the budget which Baghdad has avoided paying for at least as long as I’ve been interested in G.

This extract is from p 37 of a detailed OIES Paper by Robin Mills dated Jan 2016 (which contains lots of background relating to G and the other IOC's in the region) (link to full work below):

In December 2014, the KRG and the federal government in Baghdad under Prime Minister Al ‘Abadi reached agreement for the KRG to receive 17percent of the federal budget (minus allowed federal deductions); this amounted to about $1.1 billion per month, plus additional payments for supporting the Peshmerga military. In return for this, the KRG was to export 550 kbpd of oil through its pipeline system consisting of 250k bpd of ‘Kurdish’ oil, and 300k bpd of oil produced from Kirkuk and surrounding fields which were operated by North Oil Company. By this point, the federal Kirkuk –Ceyhan pipeline was entirely inoperable due to the activities of ISIS, and Baghdad’s only option for exporting Kirkuk crude was to use the connection to the KRG’s new pipeline. In addition, the Kurdish Peshmerga forces had taken physical control of most of the fields around Kirkuk to deny them to ISIS. However, the deal never operated close to the agreed parameters. The KRG did not export the agreed quantities of oil, claiming, with some justification, that it was ramping up production and the 550kbpd figure should be taken as an average over the course of the year. However, it was also exporting some of its oil independently, outside the remit of the agreement. At the same time, Baghdad, which was suffering a severe liquidity squeeze due to the falling price of oil and the war against ISIS, failed to make its agreed payments in full. It paid $200 million in January, and about $2 billion in total by June. Baghdad, for its part, blamed the Kurdish failure to export the agreed amounts.

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2016/01/Kurdish-Oil-and-Regional-Politics-WPM-63.pdf

The view from last Friday (NB: Brent movements are based on the November contract which technically doesn’t become front month till this weekend):
https://invst.ly/ryq3u
A bad week for G and GKP but, hey, no volatility no trading fun. Pay particular attention to where DNO and Chevron have ended the week - the non-UK market for oil co’s seems to have been stronger. Over time, G invariably tracks closer to Chevron than RDS, for example. That comparison alone suggests that G should be over 130p. Despite that, G is still doing OK in relation to the covid+OP crash in March, here’s the longer view including BP and PMO:
https://invst.ly/ryq1t
which means that if you’ve managed to trade G successfully over the last six months you should be much better placed than when all this nonsense started.

On checking my own performance with G over the last eighteen months, when my average cost per share had risen to 1.58 during the £2+ days, I see that I’ve managed to extract a significant net amount of cash so that I’ve reduced my capital exposure by 30% whilst the number of shares I hold is only 12% lower than it was then. Someone trading more aggressively could have done a lot lot better, especially if they managed to accumulate in the rather tense period below 100p.

Yeah! I'll go for 125 bunks.

For those that think like me that the GvOP ratio is a good barometer then today that number has fallen below 2.6x, which suggests that G is 27p below par. It very rarely falls below 2.7x.

For me that 27p represents my minimum target profit on the tranche I acquired today, which could be realised at a little over 140p. Depending on how things run from here, I’d hope to hold out to 180p but the charts may eventually advise me otherwise, of course.
https://invst.ly/rymv1