Member Info for chilting

I think OPEC+ is probably the least worst option.

Oil investors have just endured a prolonged period when OPEC+ lost its influence because of the rise of US Shale - those days could return and to me that would be a reason not to invest in oil.

A larger group of oil producing nations meeting to fix oil prices would probably be even less successful at reaching agreement than OPEC+ - the US, EU, UK, China and Russia for example added to the existing OPEC nations.

mrc
Are you saying that there should be a fixed price for different grades of crude, maybe index linked?
Thank could be a dangerous ask with North Sea Oil production costs being so high.

Yes, without OPEC+ at the moment the oil price would probably be sub $40 - its only their actions to regulate supply that have walked the price up.
The balance now is that in the eyes of the worlds politicians - especially Biden - they have been rather too successful, hence the push back.

Kraken
Yes, high oil prices are certainly needed to guarantee investment but politicians only look at the short term problems - long term problems are not problems until they need fixing in the short term.
Also politicians have the perfect get out now, they only have to mention that they are combating global warming and anything is possible.

mrc
The Russians seem to have problems maintaining output at the moment - they produced less in June than they did in May - maybe the effects of Covid and lack of maintenance and investment.

As we are Oil company investors we obviously want the best possible price for oil but with the world recovering from Covid, high oil prices could be very bad news for everyone else and certainly increase inflation.

So, maybe the OPEC+ meeting was even more orchestrated than it seemed and members were under pressure from the US, other western governments and the Chinese to dampen down the oil market.

Also, its probably not in our interests to see Brent soaring away, because it will damage the world economy and eventually lead to a drop in demand for oil in the longer term.

It could drop towards 19p on low volume - that is the only danger - but more likely to stay around this level for the rest of the summer.
Upside will come as a result of September update - when SP will top 30p.

Thank you Richard - very much appreciated.

OPEC+ have just created uncertainty, this I think has sobered the market up after a very strong H1.

So I think the market will retest the latest low on May 20th at just below $65 then come back to trade around the March and May highs of $70 before moving ahead again in Q4 when demand starts to squeeze supply.

Mine is $65 -$70.

Anyone else?

Yes, exactly - it certainly seems that this little spat between UAE and the others has been orchestrated to create that uncertainty.

Yes, very good analysis.

So, if they are correct, we can expect little short term growth in energy stocks as Brent continues to rise because investors are wary about the internal rift in OPEC caused by the UAE.

But as reality sets in and oil demand starts to overrun supply the UAE issue resolves itself because the world will need all that OPEC+ can produce and it is then - probably in 2022 - that energy stocks will benefit big time.

Assuming the trial was a success, I think that we can be reasonably confident that Weichai will proceed as planned.

Weichai is Chinese Government owned and there are clear aims in China to develop hydrogen, even though there a big problems that need to be addressed before the strategy makes any sense. Not least that most of the hydrogen produced in China is sourced from coal so its any thing but green.

The Chinese tend to develop plans and act on them but that doesn't mean that they are practical or effective.

So, yes they will go ahead with the production plant but will it eventual become a commercial success - who knows.

Biden is certainly between a rock and a hard place - interesting article.

https://edition.cnn.com/2021/07/06/business/gas-prices-opec-biden-trump/index.html?Type=Store&bt_ee=0tVabYItC%2FuZ6r59RYc8BJDFfrOJcCNt%2F1ptJXc41HeUfmMmNawBud%2F6TLbAx55B&bt_ts=1625605295345

mrc
You seem so obsessed with ramping and de-ramping and people's motives that it seems to have turned into an obsession.

I should be careful mate, it might end up clouding your judgement - I have seen it before on these boards - the obsessive over-ramper's lost a packet with SXX.

mrc
When a commodity or a share is overbought it makes it more vulnerable to other pressures, in this case inflation fears, so technically the fact that it was overbought contributed to Brent falling even though it may not have been the principal causes and was in fact only a secondary cause.

Another cause was probably the fact that OPEC+ were pratting about for so long and the market was treading water for so long and getting more overbought as the hours dragged into days without any firm news.

Another cause was that the Yanks had a holiday on Monday to celebrate Independence Day and the US traders were ****ed off that they were missing out on all the action.

Another cause was all the traders and investors who were convinced that with all their over ramping that Brent was going to immediately go to $80 - it was their over ramping that meant that Brent ended up being overbought and ultimately fell when market conditions turned sour.

Enquest is showing all the characteristics of an AIM share at the moment - no wonder Zak Mir is commenting - we could see a pump and dump cycle - volume is certainly up.

As I said yesterday, at about this time, simply that Brent became overbought - now we have had the inevitable fall it will start to move back up again.

Todays SP volatility will I think turn out to be the short closing - there are lots of small trades going through - so hopefully the position will be closed within a few days.

I particularly liked the emphasis given to providing solutions on the whole range of options open to retailers - from large CFC's, Mini and Micro CFC's, Click and Collect, software solutions and the open forum for partner retailers to share ideas.
The whole Grocery industry around the world will be able to gauge the progress of Ocado partners against the rest.

Also Tim's comments about exploiting low wage markets seemed to be a clue for where the next partnerships may be emerging from.