Member Info for Boyobach

The thing is that the US apparently needs the heavy stuff - which is why it continues to import oil. This is from a random article (can't recall the source):
…… experts say the US still won't be fully energy independent in 2020, as its refineries rely on the medium and heavy crude oils found overseas and not just the lighter crude oil extracted in the US.
Recent US government figures, dated to 2018, said the US imported about 900,000 barrels of Saudi oil a day, 9% of its total imports. The same figures said 16% of US oil came from the Persian Gulf region and 29% from countries in the OPEC cartel.
"Until the US refining sector is able to process more lighter crudes, we're never going to have energy independence," Joe McMonigle, an Energy Department official under President George W. Bush, told CNN.

The bizarre thing, bunks, is that the ratio is worse now than immediately before the attacks on KSA facilities. So even though the sp is higher than it was on Sept 12th - it happened to peak on that day - the ratio of G’s sp : Brent (LCO) is down from a healthy 3.21 to a very average 3.06 at the close. In other words, it’s about 10p down on where it might have been. In reality G has so far not done as well as it should from last week's increase in OP.

Not a lot for folks to say today Hawkey - OP down and G down pretty much in step. G needs OP to be $65 to have any chance of 200p these days and you can knock off at least 3p for every $1 that Brent goes below that price. Market is generally down to be fair.

Boyo 197
Wolfbag 203
PostieRemy 207
Klassic 210
Bunks 211
Hasiba 212
Broadland 214
Withoutt 220
Hawkey 222
DHC 227
Stockbuster 229
ocelot 230

Bunks - I can understand that ceasing the buybacks might seem to imply that the company believes the shares are now ‘up to value’ (what a killer that would be!) but I don’t think that’s the case. Buying until the shares were up to full value would not be ‘value accretive’ - where would the additional value come from? I’m guessing they’ll use the shares for remuneration/incentives and needed to stock up as I believe there used to be a lot more in treasury. Sensible to do that at relatively low prices. I think they achieved a surprising and excellent boost in mar-cap for just $5m

From a self interested POV, I wish they’d have spent the whole $10m - hence my estimates at the time of what that might have achieved in terms of sp, .but TBH I’m not sure they would have doubled the rise in sp, ie the return was likely to diminish the more they spent

They should start entering our Friday Club competition.

Ha! On OP then like everyone - including the experts - WTFDIK?

Very mixed messages - The price was potentially set to soften between now and January but the KSA situation has reversed that for the moment. It's not clear how long it will take to get KSA production back up to speed. In the meantime they and the US will use reserves to plug the gap whilst telling the world that everything is fine. Whatever happens, US production progressively reduces from $50 WTI downwards. So $55 - $65 (Brent) would be my guess for the price range until end January provided that the KSA problem is resolved as quickly as they are saying.

The BB programme’s declared purpose was to reduce capital at a time when the company believed that the share price did not accurately reflect the value of the Company's assets, and that utilising its balance sheet to repurchase shares represented a value accretive use of its cash resources. The budget for this was up to $10m .

Because the buybacks ceased before the announced end date and before the budget was used, it seems reasonable to conclude that the company’s objectives were met. In terms of market cap v OP, I think the value is about 12% up in relation to OP following the buybacks. The OP was coincidentally 64.5 (similar to today) just before the buybacks started and the sp was 177 - so a 20p boost at least partly, if not entirely, due to the buybacks.
The buybacks didn't boost the sp as much as I had hoped but that, of course, was not the purpose. I'm not complaining about a 10% + lift in sp and certainly don't regard it as incompetent for a $5m outlay.

'And who can disprove these numbers.......? '
The numbers only matter if the physical supply (as measured by inventories) drops. They are on quite safe ground at this time of year.

There used to be a lot of frustration and angst expressed on this BB when G did or did not react to OP as folks expected. I rather hope that this issue has now become much less of a mystery. It’s hopefully become very obvious that G’s sp does not need much explanation when it stays within the range of 2.9 - 3.2 x Brent, ie within about +/- 5% of its long term average ratio. That range held good throughout the turbulence of this past week and I also found it quite interesting to note that the buybacks ceased after that relationship seemed to have been restored after a difficult patch at the end of May.

It seems that only if it strays outside of that range might it point to a more fundamental change and be worth discussing further. The historic trend, support and resistance levels will inevitably continue to apply, of course, providing occasional but temporary barriers to G’s movement in response to the underlying driver of OP.

So, provided G continues as it has over the past few weeks, I’m going to take a break from the daily commentary. Here’s the last chart for the time being: https://invst.ly/ccaap

I like your enthusiasm Hawkey - enjoy your holiday!
G’s prospects like Qara Dagh and proven resources that are nearer to production may well shift G’s sp but in the meantime it’s business as usual as far as the sp is concerned.
Two years ago Brent closed at $55.14, G was 157p (ratio 2.84x), at $65 Brent that would have been 185p. So G is effectively up by about 15% over two years. That’s not truly amazing in my view although it was, briefly, just over a year ago.

G will be nearer my expectations when the ratio is back up to 3.6x as it was in the summer of 2018. However, I don’t expect to see any significant shift until there's some substantive news. As ever with G, it is a case of 'wait and see' and don't bet the farm on it. https://invst.ly/cc3kl

Looking at the trading week since last Thursday’s close, it’s clear that the increase in OP due to events in the KSA has not materially affected the market’s long term view of G. Whilst Oil is up about 6%, G and GKP are up only 2%, after a further drop this morning: https://invst.ly/cb-7v
In fact, whereas G was about 12p up on 3xOP last Friday, it is now only 3p - so the week’s increase in OP has been largely discounted.

Article (In reply to Hawkey) :

‘America Is Becoming the New King of the Oil Market’
https://www.nasdaq.com/articles/america-is-becoming-the-new-king-of-the-oil-market-2019-09-15
America's oil production is booming. The country's crude oil output is on track to average 12.2 million barrels per day (BPD) this year, according to the U.S. Energy Information Agency (EIA). That's an increase of 1.2 million BPD from 2018's record output.
Because of that gusher of new supply, the country now rivals Saudi Arabia as the global oil kingpin. It even briefly overtook that nation as the leader in crude oil exports earlier this year. With more supply on the way and additional export infrastructure under construction, America is emerging as a dominant force in the oil market.

All pretty much back to normal sp-wise: Brent settling back into the low $60s and G probably the low 190s. https://invst.ly/cbqem The second phase of Buybacks supposedly finished yesterday with only just over half of the $10m spent according to the G website, so no immediate prospect of any stimulus.

Here’s the 24x7 detail of the last five trading days: https://invst.ly/cbqeu
Interestingly all three Kurdish based producers have lost ground in their Brent relationship since this time last week.

G may be down but performing nicely today, along with the other Kurdies, and not over-reacting to the pull-back in OP: https://invst.ly/cbidg
Red is back above Green - and consequently the sp:OP ratio is slowly improving

'Missiles facing the wrong way'......
Let's hope so - there are questions about the performance of US defence missiles. 'Facing the wrong way' is much better than if they had failed.... Couldn't possibly have , could they?
Now, in the days of smart everything, how long does it take to rotate a gun or missile launcher through 180 degrees?
I bet Huawei could produce control software to do that.....

Tonight I will mention GKP first - given that I had a brief exchange with Ocelot this morning in which I mentioned a wedge pattern that seemed to be holding G back. I said that GKP had no similar ‘influence’. For clarification, GKP does have a similar wedge but it is not yet in play: https://invst.ly/cbb0p . I don’t really follow GKP much but it does have a similar relationship with OP to G, the factor being about 3.3x.

GKP had been outperforming G in terms of response to the last few day’s gain in OP however that may all change tomorrow given the fall back in Brent tonight.

Here’s the 24x7 detail of the last five days: https://invst.ly/cbb2g

G investors may like a risk but they are not, generally it seems, fools. There was a fair chance that the OP spike would not last and G ‘s post weekend sp increase was cautious to say the least, so my next trading target ‘off-load’ point didn’t get hit. Here‘s the current G:OP chart: https://invst.ly/cbbcn . G is now ahead of Brent again, until tomorrow, with a closing ratio of just over 3 - the best this week!

Yes-Ocelot quite perplexing. I'm not entirely convinced about the wedge 'thing' in this instance - it's a different matter when an sp is cycling up to the line more frequently. Also, GKP is responding much like G and there's no similar wedge evident there.
One thing is for sure, the market is quite cautious about the sudden rise in OP and the circumstances that surround it.

G does seem to be encountering some difficulty breaking through the upper orange line of the wedge pattern seen here: https://invst.ly/cazmm

Whether this is just a technicality remains to be seen as the sp is not performing as it should with respect to OP and should have been comfortably over 200 and potentially up to 217 today.

Today's G v 3xBrent Chart shows the red G price line has fallen below the green Brent price line today: https://invst.ly/cao-u
This immediately indicates that the G:OP ratio has slipped to below 3x. It was 2.93 at the close and has since become even lower. G should, by now have been comfortably around 215p by last week’s standards, when the ratio reached 3.2x. So a pretty poor performance.

The G/GKP/DNO v Brent chart gives a more detailed view of the same picture - basically that G has slipped from where it was a few days ago and has not kept pace with Brent’s rise since Friday: https://invst.ly/cap06

G is not alone it seems - presumably the market does not yet believe the current hike in Brent will last. Here are the usual group from OP Peak in April: https://invst.ly/cap6c