Member Info for Boyobach

Although, frankly, the immediate prospects for Brent are no better than when it first went below $23 three weeks ago, G and other oil co’s have generally recovered to establish their respective bottom prices. In G’s case this looks like 98p intraday, but closing/opening above 100.
https://invst.ly/qi5q3
Although it may not be obvious at first glance, G has recovered at a greater pace than RDS from their mutual low point a month ago.

Brent started to flatten out on Thursday and G followed a day later, possibly breaking out of last week's downward trend today: https://invst.ly/qi41c

Thanks Hasiba - that report is hilarious in reality isn't it? When did Russia ever actually follow any agreement with KSA/OPEC+?

Also worth remembering the US-Saudi deal reportedly made in 1945 between the U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz, that has defined the relationship between the two countries ever since. This was that the U.S. would receive all of the oil supplies it needed for as long as Saudi Arabia had oil in place, in return for which the U.S. would guarantee the security of the ruling House of Saud. The deal has altered slightly ever since the rise of the U.S. shale oil industry and Saudi Arabia’s attempt to destroy it from 2014 to 2016, in that the U.S. still guarantees the security of the House of Saud but it also expects Saudi Arabia not only to supply the U.S. with whatever oil it needs for as long as it can but also – and this is key to everything that has followed – it also allows the U.S. shale industry to continue to function and to grow.

The above details taken from a recent Simon Watkins article: https://oilprice.com/Energy/Crude-Oil/The-Sad-Truth-About-The-OPEC-Production-Cut.html

Genel sp has held well but for how long? A very good question Ammu, which could be applied to many stocks at present.
But first, you say ‘held up well’. Has it? By comparison with other oil co’s I guess so, but compared to the FTSE maybe not so good. It’s all according to our POV and expectations:
https://invst.ly/qhn4y
Does the fact that G may have ‘held up well’ mean that it is well placed to recover as fast as others? Also, can we assume that further drops are not likely? Those are big assumptions at this stage in the game - and it really is a game.
Yes, I've kept an interest In G, an essentially good company but unfortunately producing a commodity that could remain oversupplied for the next 12 months and reliant on income from a fragile economy vulnerable to political/tribal tensions during a time of global crisis. If you want an example of risk you need look no further.

Whilst WTI may not be especially useful for pricing G, it is interesting because it’s a measure of pressure upon US Shale Producers - who ultimately form a significant part of the supply variable in the supply/demand equation. This is from Seeking Alpha:
WTI contracts are settled in Cushing, where inventories are promptly starting to get full. Cushing working storage capacity is ~76 million barrels. Cushing inventory was ~55 million barrels, according to EIA at the end of April 10, and as of the latest data up to April 14, according to Genscape, Cushing is at 60.66 million barrels.
This means that if nothing changes (no more additional shut-ins take place), in the span of three to four weeks, Cushing inventory will hit tanktop. This mechanism will force widespread oil production shut-ins. At the moment, Permian producers are only curtailing ~30% of production, but that will likely increase to 75% if not 100% by end of May. That's because producers that had access to pipelines were hoping to store the oil in Cushing so that they can be sold for a later date (contango market).
But once Cushing is full, this will prevent that mechanism and force a shut-in. As for prices, this will likely not bode well for June contracts.
Full article: https://seekingalpha.com/article/4338311-betting-on-higher-oil-prices-uso-is-not-right-vehicle

In case this link gets lost in the WTI debate:
"This is the American energy producers' Pearl Harbor.":
https://seekingalpha.com/news/3561837-tankers-carrying-7x-normal-monthly-amount-of-saudi-crude-coming-to-u-s?utm_source=investing.com&utm_medium=referral

I am bunks but that's not necessarily a recommendation - it's one I'm using to 'average down' and effectively park cash during the current market nadir.

Brent is a global market name, of course - no longer specifically linked to the North Sea field with which it was originally associated.

WTI is a rather more localised and US specific benchmark, hence the reason it has dropped more precipitously than Brent because of the acknowledged surplus in that region.
Brent is a more global benchmark but there are many many others as can be researched. In particular, Asian specific ones. They all tend to track, with discounts according to geography, type quality etc etc.
For G, Brent is a reasonable generic guide for the underlying commodity and is referred to by the company whilst WTI is not particularly useful - as can be observed from last week's sp v WTI (which has fallen much more markedly than Brent)
WTI will suffer even more when the armada of tankers from KSA arrive in May, according to this article "This is the American energy producers' Pearl Harbor.":
https://seekingalpha.com/news/3561837-tankers-carrying-7x-normal-monthly-amount-of-saudi-crude-coming-to-u-s?utm_source=investing.com&utm_medium=referral

The oil price needed to turn a profit in shale has dropped, but most producers still need prices in the $40s:
'A U.S. shale bust like no other'
This Reuters article: https://www.reuters.com/article/us-global-oil-shale-bust-insight-idUSKCN21X0HC
quotes Mike Shellman - the guy who’s Oily Stuff blog https://www.oilystuffblog.com/ often provides information and links I use here.

GKP's RNS seems quite cool - no 'welcome' mood music there. Their oil pricing is presumably different due to the quality/type of oil produced - so perhaps their margins are being squeezed even more than those of G?
I've come to understand that DNO have a policy of minimal direct comment regarding payments. So I don't read anything much into their lack of announcement. I thought G's comms were comprehensive today - lots of clarification and few questions unanswered as far as I could see.

sorry about the duff edit on that last post....

Brent is levelling out after a couple of days on the ‘down’ escalator here: https://invst.ly/qh9xx


Will it pass 110p?
On recent form, Hasiba, I guess it could go as high as 116 but I wouldn’t bet on it. 108 is good.
Staying off the ‘down’ escalator here: https://invst.ly/qh9xx - ie above 98p - is the first priority at the mo.

sorry bunks - missed your post amongst all the RNS guff.
Hasiba also spot on.
KSA shrewdly managing their discounts. If US producers don't see sense then the market will do it for them. Long overdue in reality.

I don't think the divi is an doubt JL for two reasons:
1) G has always demonstrated a steady hand whilst operating in a difficult environment: they would damage that reputation by admitting they made an error of judgement regarding the divi. They knew all the risks regarding payments and OP at the time they declared it.
2) They now have clarity regarding revenue to cover the cost of ongoing operations, so their cash position is not deteriorating further.
The main issue for any investor here is the depth and duration of Brent's bottom price.

Worth keeping an eye on WTI - differential with Brent getting bigger all the time: https://invst.ly/qh7oa, from about $7.5 yesterday to nearer $9.5 today.

Since the Covid-19 pandemic erupted and OP crashed, anyone who was expecting the KRG payment issue to be speedily resolved was living in the land of clouds and cuckoos. Today's RNS sets out a credible path for all parties.
Investors in KRI companies are taking risks - that's why G is as cheap as it is relative to normal metrics. It is, however, well and, as far as I can tell, ethically managed. I was unhappy about the payment 'holiday' when it was first announced but must accept that circumstances since then have changed and that the current proposals offer a credible road-map to resolve the issue. If I change my mind then I can always sell - the opportunities to shift to another investment are relatively good currently.
The market seems to be fairly neutral so far and the sp may well remain above the 98p support here: https://invst.ly/qh7d6

All governments are facing unprecedented economic problems at present and the KRI already had difficulties beyond its control. Under the circumstances this proposal is a rational and practical way forward. The tone of the RNS suggests that G is fully on board with the proposal, which contains both a payment and clarity of intention. No one would have been expecting 2020 revenue to be particularly good given OP. Cap-ex can now be planned and adjusted accordingly. Better for reserves to be extracted when the price improves. This morning I bought back the trading tranche I sold a couple of days ago.

Maybe bunks. G almost moved in line with my expectations today - although I did have a limit buy order set at 103p this afternoon which did not quite trigger….https://invst.ly/qgxrt

Here they all are since last week’s close, a whole seven days of quarantine ago : https://invst.ly/qgxyr

It isn't as if G isn't trying to get off the 'down' escalator and buck the trend. 116 would be a major achievement at $28 OP https://invst.ly/qgtdy