Member Info for Boyobach

If G is 'dismal' today then what are you comparing it to?

Hasiba: 'My Gkp holding is now not far from Genl...but with many other oilers and so far so good but still not seeing much from Genl in comparison!'

G has remained pretty solid since Friday, be thankful for that. GKP has been anything but. It has risen more today simply because it dropped so much yesterday . https://invst.ly/qjccw

If the contract price at expiry doesn't match the spot price then there'll be another discontinuity like there was last Friday.

Hydrogen - don't forget you are looking at Futures contract prices (the next month). You are not looking at the spot price.... https://invst.ly/qjc0m

Hi Jack
You are utterly right to point out that the 3x relationship with OP which served as a good rule of thumb for G has graduated to 4x and even 5x yesterday. This should tell us something, should it not?
Either G has been re-rated because of terrific profit potential or the price of oil has fallen to such a level that the company’s sp is no longer based on what it currently produces but upon its assets and their perceived future value when normal market conditions return (together with a suitably sustainable OP).
G’s sp today is based either on faith in, or rational assessment of, its future prospects irrespective of today's ‘temporary’ position regarding OP. Acting in faith is not my style and I don’t recommend it.
From last Friday, G’s sp (and others) have effectively been disconnected from the current OP. As I said, today’s drop was hardly going to assist the sp - implying that it would add pressure. However, because of the disconnect, that pressure has not had any effect on the sp - yet.

I don’t think I’ll be quoting the G:OP ratio for a while except, perhaps as indication of normality returning or of lunacy setting in. I was quite sympathetic with those who talked about shorting G yesterday. The only reason I chose not to sell was because I have already de-risked and felt that 98p would withstand a bit more pressure and, also, that I would top up if the price dropped to a much lower level.

Jack - I'll respond to your post shortly
First - just to add to the previous discussion about Futures/SpotPrices and, by inference, CFDs (bear in mind that OANDA is a CFD, not the spot price) I'd draw people's attention to Malcy's excellent piece yesterday: 'Oil price- Super Contango at work…' https://www.malcysblog.com/2020/04/oil-price-petrotal-dgo/ in which he expresses his frustration with much of the confusion caused by events of the last few days as the WTI contract rolled over.

I'm grateful to Marfthew for adding his comments. Following his observation about the unreality of the S&P being at the same level as this time last year - which is broadly correct - I thought it would be useful to show how the S&P, FTSE, RDS and G have tracked over that time and how they stand at this stage of the crisis.
https://invst.ly/qj80d

WTI front month Contract roll-over v Brent (LCO) v Oil co sps since Friday's close in the UK: https://invst.ly/qj5v8

Agreed bunks - there is the technical issue of futures contracts - which is largely caused because physical delivery must be avoided - and the small matter of selling the actual commodity to a refiner. Oil stored within a VLCC is unlikely to remain moored off the US (WTI) market if it can be sold in Europe (Brent) for a net profit, so any underlying differential between WTI and Brent eventually narrows to reflect shipping costs as the oil will be sent to wherever there is a buyer. Ultimately, if WTI 'spot' falls then Brent will follow and the excess of supply will not be confined to the US.

A $2+ drop in Brent overnight isn't going to assist the sp, where the relationship was already stretched....

Thanks - I'll stay in to catch the opportunity.

It’s difficult to comment on today’s sp performance without appearing to either ramp or deramp.
It could easily be argued that the resilience demonstrated by G’s sp today is inconsistent with it’s past performance v OP and also in relation to the manifest geopolitical and global economic risks to which it is exposed. On the contra side of that, we have well founded ‘fundamentals’ concerning G’s ability to survive the current crisis and to ‘come good’ in the post C-19 environment.
One thing is for sure, if the sp is ‘fragile’ then today certainly tested that.
Here’s an hourly chart that tracks performance against OP and RDS since G bottomed out at 53p a few weeks back: https://invst.ly/qiw22
Would I be shorting/selling G at this point? Not really, especially - as others have pointed out - with potentially easier pickings elsewhere.

Sofa….so good
G proving very resilient today.
It may be frustrating for those who have a direct (Wonderman) and indirect (me and Marfthew possibly) interest in the price going down. It's always interesting when infrequent or new posters make a comment.
I include my name in there because although I’m LT Genel as far as my core investment is concerned I happily take advantage of the dips - as, I think, Hasiba would do. There are therefore times when a brief drop would not be inconvenient for me.
There’s no doubt that in some respects the sp is defying gravity at the moment but it is not alone - RDS is performing similarly. https://invst.ly/qiqm3
The market plainly judges the current sp to represent something of a ‘bottom’ on the basis that OP at these levels is ultimately not sustainable. It is only a question of when, not if, it will recover and at what speed. That remains to be seen, of course, but - unlike gold for example - oil is dug out of the ground because it is actually needed.

Ordinarily that would be easily achievable - quite conservative - given current OP.
However, G is not exactly following the normal rules right now and very firm above 98.
GKP a bit easier to read.

target?

Why would the dividend be cancelled Ammu? Is G producing more oil than the KRG wants and having to pay to store or remove it? When they declared the dividend, G's management knew that the market was going to effectively be in an induced comma for a period.
The issue affecting WTI in the US is the result of a serious disconnect between futures contracts in a virtual world and the physical commodity in the real world. In the end, oil isn't just a number on a screen - it's black stuff sloshing around in transit in a pipe or a boat. It ultimately needs a destination - either a paying customer or expensive storage. If there isn't a customer then guess what - the owner has to store it.

A good performance by G today, just ahead of RDS and the KRI companies since Friday's close:
https://invst.ly/qibht
I think you misunderstood my earlier post in another thread, Hasiba- I was referring to 'bottom' of around $98 - it was not today's target. As I suggested, G seems to have levelled off and stepped off the 'down' trend:
https://invst.ly/qibfp

Correct bunks. G is doing fine and well within the limits I suggested.
https://invst.ly/qi8m6
If Brent drops much below $25 then it may be a different story, of course.

It's a good job that renting a VLCC is so expensive - otherwise WTI would be hitting Brent harder.

Yeah- I know. But I did say possibly 98p intra-day.
Ha! if I was right as often as I post then I'd hardly be typing this stuff.