Member Info for chilting

From Trump we just have a couple of tweets that are relevant today -

"Saudi Arabia and Russia are arguing over the price and flow of oil. That, and the Fake News, is the reason for the market drop!"
The fake news he is referring to is the Coronavirus - he is treating in issue in much the same way as he treats climate change..

"Good for the consumer, gasoline prices coming down!"

My guess is that he will throw the shale industry to the wolves - he has a good lead in Texas and much to gain from cheap gasoline.

Hopefully he will leave Russia and OPEC to repair the damage but politicians don't use logic when they make decisions so anything could happen.

These shale idiots bring back memories of Freddie Mac and Fannie Mae - for a country that is supposed to be a capitalist utopia they sure do make a lot of mistakes.

Part 3
Other players:

The geopolitical game that is now being rolled up closely corresponds to the textbook example of what in the economy is called the prisoner's dilemma. In short, cooperation difficulties result in both Russia and Saudi Arabia being in a worse position than they would if they agreed.

However, the Russians and the Saudis are not the only prisoners in the oil price war. The rest of the world's oil producers now appear as powerless game pieces along with the heavyweights.

The situation is most acute for countries such as Iraq and Iran, where domestic problems have already led to instability. For Iran, the development of recent weeks appears to be one per

Part 2
Saudi Arabia:

With its massive oil reserves, the Saudis have a unique ability to influence the market. Large movements also appeared in the mid-1980s and the 1990s when the Kingdom tried to pressure producers in the United States and Venezuela, respectively. Some analysts, including the prominent Russian economist and former Finance Minister Jegor Gajdar, believe that the Saudi price attacks were also a significant factor behind the fall of the Soviet Union.

Now, the Saudis seem to be trying again on the same strategy to push Russia into the lead. Saudi oil is one of the cheapest in the world to produce and the country has plenty of reserve capacity that can be activated to compete with the more expensive Russian oil.

However, the situation is sweaty for the Saudi regime, whose state budget is based on an oil price just north of $ 80 per barrel, significantly more than the slightly over $ 42 that Russia needs to get state finances together. In addition, unlike Russia, Saudi Arabia has virtually no domestic economy beyond the oil sector to fall back on.

The palace intrigues also seem to continue in Riyadh - this weekend several members of the royal family were arrested, which raises questions about how strong Crown Prince Mohammed bin Salman's position really is.

USA:

On a macroeconomic level, the oil price race does not necessarily pose problems for the United States, even though the energy sector has grown over the last decade. At the same time as a falling oil price is breaking the legs of the oil sector, Americans are also getting a boost in the form of lower gasoline prices, which favors private consumption, which is a far more important component of the overall economy and growth.

That does not mean that the Americans can breathe out and let Russia and Saudi Arabia fight each other at a distance. Di has previously written about the profitability problems and the massive debt build-up in the US shale oil sector. The oil price war is exacerbating an already difficult situation.

The US 10-year yield has fallen below 0.5 percent after an impressive fall on Monday. Concerns about a substantial credit tightening in the US are growing. How the turbulence in the financial markets will spill over into widening credit spreads between corporate bonds and government bonds is virtually impossible to overlook as long as volatility remains at high levels.

part 1
Monday's oil price collapse was the worst since the early 1990s. The geopolitical game that led to the sharp market movements is complex but is basically about three heavy players who have now painted themselves into the worst possible corner.

Russia triggered the crisis at last week's meeting with Opec +, the collaboration between Opec members and other major oil producers. The country chose to block further production cuts that preceded the cartel in order to support the oil price squeezed by concerns about the spread of the corona virus and its effects on demand.

As a result, the Russians made a point of settling the oil markets under arms for the past four years after the oil price collapse in 2014. Saudi Arabia responded quickly with signals that the country will expand its oil production next month.

Cooperation between the Opec countries and Russia has always been shaky. Negotiations on production quotas have been characterized by regular fierce statements. However, the collapse means that the oil market faces two major threats at the same time. On the one hand, falling demand - even before the drama of recent days, the US Energy Agency predicted that global oil demand would fall this year - and on the other a supply shock.

It is not in the interests of Russia or Saudi Arabia. So why have the countries ended up here and how are the world's heavy oil producers affected?

Russia:

Russian oil company Rosneft's spokesperson Mikhail Leontiev put his finger on the crack question in a statement shortly after the negotiations with the Opec countries collapsed. From Russia's perspective, the production cuts in recent years have largely only benefited the US oil producers.

The Russians are not completely wrong. While the cooperation stabilized the oil price after a long and deep race, it has also resulted in the countries that have reduced their oil production in practice left the field free for US shale oil producers, which increased their market shares.

A reminder of the trend came in the form of fresh figures on Monday showing that US net exports of petroleum products amounted to 907,000 barrels per day during the last week of February, levels not seen for nearly half a century.

The Russian economy is still clearly dependent on oil prices and the cost of extracting Russian oil is still high from a global perspective. But in recent years Russia has built up massive reserves through a tight fiscal policy. It provides an airbag of around $ 170 billion, close to $ 1,600 billion, which can be used to ride out the oil price race.

https://www.bbc.co.uk/news/uk-scotland-scotland-business-51801380

No sign of a hook-up - the trouble is now that the weather window closes in about 26 hours - although HK is a larger shuttle tanker and may be able to handle hasher conditions so it may not be relevant that seas over 4m are forecast in about 26hours time.

Looking at the forecast the next weather window is later on Friday.

Today is 13 days since the last tanker left.

https://www.windfinder.com/forecast/viking_north_sea

Yes there is something seriously wrong at PMO - falling 56% - even on a day like this is a bloody big red flag.

No sign of an immediate hook-up but HK seems to be slowly manoeuvring to get into an approach position.

If we can finish above the support at 14.94p today that would be something of an achievement I think.

I guess only being down 24% is something of a vote of confidence in ENQ with PMO and Tullow faring much worst.

Shell is down around 21%

Settled down 29% - bid - 12.72p

Multiple stocks into auction - inc ENQ and many FTSE100.

Sorry I cannot agree Jan, this is political now, it all turns on Trump, Putin and MBS- its not just about oil anymore.

We saw the way that the Chinese sanctions issue carried on - this could be the same - the trouble is that Trump could just leave the shale companies to their fate and allow the oil majors to hover them up - cheap oil would be great news for him.
All the best.

The SP is resting on the first support at 17.96p the second support is 14.94p - hopefully we won't fall through the second support. Also it would be good if we could stay above last years low of 15.3p set last March.

I don't think we should have any illusions here this is as bad as it gets and with no sign of the bottom its simply a case of taking a loss and selling or holding - personally I will hold because I think Enquest can weather the storm but it could be a very long time before we see 20p again.

Falling back again now towards $32 - maybe find a level at around $32.50

WTI now at $33 and still rising to find a level - down around 20% since trading started at 22.00GMT

So WTI has lost around 30% and is trading at about $32

https://www.tradingview.com/symbols/USOIL/

Ammu
The trouble is that this isn't just a price war - if it was it would be solved logically by the market - this is politics - logic doesn't apply.