Member Info for Boyobach

I’m neutral about the likelihood of an OCDO takeover. However, given that takeover premiums are ordinarily around 30%, OCDO’s current sp would suggest a takeover price approaching 800, which some would view as reasonable. I therefore tend to think 615 ish may mark a maximum for the time being. I sold 50% of my holding at 597 nearly a fortnight ago to cover the possibility of a drop back and will consider a further sell-off depending on further price moves. The sp needs to recapture the 615 resistance level to make further long term progress. https://invst.ly/10k4zm

Davidspellacy asked 'Why do investors keep banging on about MM’s, Ocado trade on SET’s , no MM’s'

SETS is an order book system. It has not eliminated MMS.

Not all transactions are conducted via SETS and MMs are amongst those who have access to it

OCDO did surprise me by finishing the week above 560 and on an upward trend, let’s hope it continues:

https://invst.ly/10jm38

After the spike a week ago, OCDO quickly narrowed to a trading range centred around 530 although this may come under pressure as the days go by. Nominal 500 might continue to hold now the market has seen what can happen:

https://invst.ly/10iu3j

It'll be interesting to see what trends develop hold or break over the next week or two....

OP and Oil Co’s very steady this week (+/- $2 for OP isn’t bad) although the US co’s are seeing a steady rise, which is specific to them and presumably currency or US market related.

So all flat and boring on that score for Shel & BP so far this week - with the sp:OP ratio sticking close to 31.5x. I’ll therefore take Friday off and post the chart now:

https://invst.ly/10itx0

Hi Char - only just saw your reply -I'm sure they couldn't. ATB!

Apparently Labour are considering appointing char as their future No 10 press officer, Jim....

Anyway on the boring topic of sp v OP:

Brent was down about 3% on the week to today’s market close and US companies CVX and XOM were around 4% down whilst Shel & BP were less than 1% down - presumably much to do with currency rates.

https://invst.ly/10gs90

Like watching paint dry currently.

The best thing about the last couple of days has been the breakout that OCADO has made from the steep red trend that has marked out its highs for most of the period since September 2020:

https://invst.ly/10gqwt

(here’s the wider view for context: https://invst.ly/10grai ).

Bearing in mind the gaps that would be available for filling down to 387, it also gave me an excellent chance to dump 50% of my holding at about 600, thereby reducing my exposure to this quite unruly stock: It’s so much easier to make gains from a stock that’s moving up rather than continually mitigating losses on one that is predominantly falling.

Full marks to Travesties ‘Nail in the Coffin?’ post,quoting Reuters btw.

This is a rather busy chart but, bear with me. It shows Brent and Shel rebased from late September and one point worth noting is the way Shel’s ‘highs’ have been limited by the falling red trend line since early March. Brent’s price has also been limited by the identical orange trend line over the same period (only breaking above it for a short period when OPEC+ pulled their first production cut in April). The fairly obvious conclusion is that the continuing drop is a global issue and the relative weakness in Shel’s sp is not company specific. The vulnerability of the sp to OP and the global factors that drive them both are evident here:

https://invst.ly/10ed0z

The chart also shows that, as we all know, Shel does not track OP on a 1:1 basis, for if it did the sp would be around 2000 today..

As far as last week is concerned, Shell is up nearly 2% whilst Brent is about level with last Friday after dropping around 5.5% on Monday:

https://invst.ly/10ed99

Does that reflect the divi increase? TBH Barrie I haven’t seen much change in the sp:OP ratio yet and it’s still about 31x. Shel did do better than the other Oilers over the week by about 4% though.

Brent swung by $2 either side of $76 this week but, as the LSE closed this afternoon, OP couldn’t have been closer to it’s price at the same point last Friday. Although XOM and CVX were over 2% up, Shel’s sp reflected the lack of change, BP was marginally (1%) down.

​​https://invst.ly/10bvzi

.... mind the gap:

https://invst.ly/10b872

Interesting to see that XOM expect to double their US Shale production over the next five years.

More supply on the way then? KSA may need to rethink their strategy if their cuts just stimulate more US production. We know what happened last time this got out of control. Cheap oil is bad for everyone - not least green transition projects.

https://uk.investing.com/news/stock-market-news/exxonmobil-plans-to-double-us-shale-output-in-5-years-3042790?dicbo=v2-CqH4HTX

Brent up over $1 since Friday, after touching +$2 at $78, but Shel (and BP) down at the close. Despite rising during the morning they both fell sharply as the US market opened. XOM and CVX around level with Friday's prices currently:

https://invst.ly/10a5ed

Here's Brent rebased to Shel from September, which should provide some context regarding the sp if OPEC+ manage to drive OP upwards: https://invst.ly/109sxz

Notice the red falling trends for both since early March, which was only broken temporarily for Brent when OPEC+ made their last cut. Will the same trick work again?

LONDON, June 4 (Reuters) : Saudi Arabia will make new voluntary cuts as part of an OPEC+ deal, an OPEC+ source told Reuters on Sunday.

Is the market going to fall for it like it did at the end of March?

https://invst.ly/109sp0

I doubt it very much.

In my view this is a significant sign of weakness in oil demand relative to supply. US production is currently strong, whatever the forecasters say about tight oil's future. In early 2020 the KSA approach was to go for market share, which drove the price down (WTI actually went negative remember!? and, along with COVID, it killed Shale. This time around their tactics are different - Russia can't take another hit but is doing ok with the oil-laundering by India, Saudi etc going quite nicely. OPEC must help their pals or the cartel will break. So, there's nothing to dissuade the US shale guys from pumping now and exploiting their DUCS while they can - this could be their last boom opportunity. Shel will do ok but will we see oil at $86 or the sp at £26 again? Not for a while methinks - and I'll be selling if we do.

Try this link, KeeponSmiling:

https://www.shell.com/investors/dividend-information/dividend-timetable.html

... and here's the Brent v Oil Co's chart since last Friday's close, with Shell lagging the field:

https://invst.ly/109d7d

The three others (XOM, CVX and BP) have made it back to last Friday's level (BP a touch shy) but Shel around 60p down.

Since last Friday, Brent had dropped as much as 6.5% this week but is just over 2% down this morning - which should see Shel back around 2300. https://invst.ly/1095rh

I agree with Tom's point about available interest rates and the relatively unattractive level of return that Shel's divi now offers. It must be remembered that Shel was paying a much higher dividend at a lower OP in 2019 - it isn't all about OP even though it can be a strong influence at times.

So, on a 15’ view we can see just how closely Shel and Brent have fallen together over the last week (since the US market open last Wednesday, in fact):

https://invst.ly/108i8-

The weakness in demand continues to drive OP down. Another OPEC+ cut on the cards? https://invst.ly/108a20

They won’t want to see it below $70 but the US and EU do. US Shale production remains strong - but for how long? Some anticipate a spike in OP when US production begins to falter as they run out of DUCs:

https://oilprice.com/Energy/Crude-Oil/US-Shale-Production-Is-Set-For-A-Rapid-Decline.html

After a period of remaining relatively aloof from OP above $77, Shel is now following it more tightly as it drops below it. Here’s this week’s 15 minute Oil Co v Brent chart since last Friday’s close: https://invst.ly/1089uj

(US market yet to open today, of course)