Member Info for epiphany121

Granted that in the short term consumer discretionary shares are on a massive upswing and there are always opportunities in the market, but i'm still keeping my eye on the ball that oil prices haven't run away yet and every day/week in the 30s for WTI, just reinforces lower investment near-term and a large move up in the summer months.

I'll stick my neck out and call Enquest at least double from here (25p) before the end of the year. Even if there's no V shaped economic recovery, oil's not going to be crashing as it did in March and that'll setup a good recovery base for 2021, as I'm convinced that the biggest marginal producer in the world (shale) has realised that the era of drill baby drill just doesn't cut it.

Cheers, R. That's good to know. When Brent rallies into the 40s/50s soon enough, that's when options will be many for Enquest. I strongly believe that Enquest will focus on debt reduction first and foremost, before considering any additional acquisitions and the coming rally in Brent should give us the push to get debt down to 'de-risked' levels. Opinions are dime a dozen regarding taking on more debt and making acquisitions, but I'll go by what AB/JS said in the AGM last year and that's to get debt down to manageable levels and for me, that's another $400 mill lower from here. I doubt that the debt market will be willing to open its wallet to Enquest with Brent at these levels, and hence cost and debt reduction is the near term name of the game.

OIl rigs down 21 to 237 from 797 last year. Permian down 13, and 3 other key shale patches accounted for 6. I'll look forward to oil shares rallying in June, after a fairly stagnant May. One step at a time for us.

GLA..

We have nothing to do with WTI..

Great update and with Brent supporting, Enquest has a great path to head back up higher. I, for one, am glad they didn't hedge more at these levels, and if these additional hedges aren't swaps, then we'll stand to make more revenue as Brent is heading higher, IMO.

GLA..

And what's your take on this, MysticAnalyst? What do you think is the reason?

Yes, definitely on the AGM call tomorrow. Yes, many countries on the continent are off tomorrow - is it Ascension day ? Inventories in 25 minutes and Brent/WTI already up a buck and a half. We'll need to see what Cushing inventories are at, alongside production estimates + product usage.

Fingers crossed...

Afternoon P - yes, I believe flights will also come back to near normal levels (2019), next year. US flight levels are still bad - 90% down now from the levels in Feb - this will bounce back though. A vaccine will solve the problem quickly. In the meantime, supply cuts will more than make up for the loss in demand there. Couple this with all the stimulus, we'll get a hefty rally later this year/possibly going into 2021. If Dems win the White House, that's another plus for keeping the shalers back from going wild with their drilling.

No worries, Jan. The end goal is what matters and we'll see a hefty rally in Brent and Enquest SP.

Unless, you thought I posted the line in Quotes.. :-) FYI - this line was posted by Chilting - "The big question is how long will the recovery period be - I still stand by my prediction that Brent wont get above $40 this year and that the recovery will be 2021-22."

I countered with why I think we'll get to the 40s in the coming weeks. I'm bullish on oil, even with Jet Fuel demand continuing to disappoint till 2021 at the least.

Jan - not sure where you thought I put out oil price targets for later this year and that I was negative on oil because of a second wave? Sorry, your clairvoyancy skills aren't just up to scratch, my good old chum. :-) I only gave a pointed response to Chilting's observation that he/she doesn't see Brent in the 40s this year - I only said that we'll see that number in the coming weeks. I can't see how you managed to deduce what you thought I said from that line... ;-)

We will...

Chilting - "The big question is how long will the recovery period be - I still stand by my prediction that Brent wont get above $40 this year and that the recovery will be 2021-22."

You're not making an apples to apples comparison. The downdraft was very quick and deep, no doubt with the economic hardstop. THe policy response has been hyper swift and gargantuan, both on the monetary and the fiscal side, and this is more pronounced in the US which is where the real pricing of assets happens. After the financial crisis, there was very little fiscal stimulus ($700 bill in 2009) and QE took ages to kick-in. Contrast that with the US actions now, and you'll see why the markets there are up 35% off the lows and oil is bouncing hard too, with lockdowns ending and gasoline demand heading back up. You'll see Brent 40s in the coming weeks, let alone in 2021 - I'm perfectly happy to place a wager on that.

Yes, sure. It is painful to be short oil and stocks, and then get headline news that a vaccine phase 1 was positive.

Hitman - yes, that looks a given now. And there's some positive vaccine news from Moderna and that's giving a bit more of a lift to thr markets. Early stage, but is certainly positive.

Phase 3 trial to commence in July as per a CNBC report

https://www.forexlive.com/news/!/moderna-reports-positive-data-on-early-stage-coronavirus-vaccine-trial-20200518

China is nearly back to pre-covid levels, apparently.

https://www.forexlive.com/news/!/chinese-oil-demand-is-reportedly-almost-back-to-pre-coronavirus-crisis-levels-20200518

In the CARES act and shalers are getting chunky cash from Uncle Sam - Socialism at it's very best. And of course, some bankrupt ones like DO are handing a fair bit out to execs as bonuses...nice.

https://twitter.com/mr_skilling/status/1261277115376336898

https://twitter.com/jendlouhyhc/status/1261280365764923393

I double-checked and WTI is in Backwardation for just a month and in Contango from August onwards, and Brent is still in contango for all future months, although the gap has narrowed considerably with the recent front-month rally.

Not to worry, SPs will move up soon enough. A strong Q3 rally is a given, IMO

Oil rigs down another 34 to 258 from 802 last year. Permian's down 23 to 150 from 482 last year. Williston and Eagle Ford have lost 7 combined to 40 from 130 last year. That's quite positive.

The downside of all of this is that WTI is now in Backwardation from a contango that it's been in the past weeks. And that can explain why oil shares aren't going up when front month futures are jumping higher like they are now. They'll catch up eventually though.

Frac Spreads count are few hours out from now..

GLA..

They'll come back in time, once there is a clear sense that economies are on the mend and demand tick-up will hold. I'll hold out for a improved SP in Q3 - maybe sooner if oil spikes

On another note. the frac spread count from last night fell to 47 from 55 last week, and down from 300+ in Feb. The count could bottom out in the 30s with some of the well hedged players still completing their DUC well inventory/their most recently drilled wells. This is still a good outcome, as supply won't come back quickly enough this year - IMO, not until WTI is in the 40s for a few months, will we see Shale bringing back rigs/frac spreads, but not in all basins. That's still bullish for Brent into the 50s/60s if OPEC holds the line for longer, which they will.