Member Info for epiphany121

Afternoon L7 - did the CNBC report say that shale production is down 700kbopd in a month? Maybe they were referring to the weekly EIA numbers dropping from 13 mmbbls/day to 12.3 mmbbls/day? I can't see a monthly drop-off of that level from shale sustaining - that doesn't add up. EIA's DPR gives a better picture as to expected drop-off on a monthly basis, based on extrapolations from rig activity.

Shale shares ave rocketed in the past 3 weeks. Bankrupt WLL was $0.4 yesterday and now is at $1.60. Some of the most distressed bakken shalers I know with high debt - OAS/QEP are up 120% and 40% respectively today. I can't explain this price action other than that these great shorts at these levels.

Or take South East Asian countries - Singapore/India/Malaysia/Pakistan - very hot (40 plus) and humid is what they are right now, and it's spreading just fine.

:-). Okie doke.

WLL - the bankrupt Bakken shaler is up 90% today - I'm not sure what goes through the mind of these day traders. Maybe make back some of the money from their USO losses??

Mod - Seeking Alpha is perenially bullish and so I discount some of what they write. Oil is now a demand story and until we get clarity on how consumers react when they get to the other side of Covid, putting Q4 demand numbers to it is just speculation. Broadly speaking though, demand should definitely come back in 2021 and we know that a fair bit of supply will be out. And that sets up a great 2021 for oil. Shale will try and come back quickly, but that's still a 1 year cycle for them to get the funding needed to drill wells PLUS they may have to contend with more EPA regulations.

All in all, I'm quite bullish about 2021. We can better quantify them when we see how consumers are behaving in the real world

Afternoon Romaron - there's way too much going on in the oil patch in the near-term. We'll certainly see volatility in oil prices to the downside in the coming weeks and I can't hazard a guess if SPs will follow such moves lower, even if temporarily.

I've had CNBC running in the background as I was working from home, and I know of at least 2 oil analysts that called for negative WTI prices as soon as the key US states started going into shutdowns. Damien Courvalin from Goldman and Paul Sankey from Mizuho - they called this more than a month and those were prescient calls. Damien reckons that next month's settlement will be even more of a bloodbath than this month's as production from the US is more or less continuing above 11 mmbbls/day and there's no demand and no storage available.

This ST oil volatility isn't done yet by any means..

90% reduction in shale wells this year and production could drop to 8.5 mmbbls/day by end of 2021 from 12.8 mmbbls/day in January this year. And Bakken/Scoop needs to start from scratch with no one willing to fund for at least another couple of years. We'll be presently surprised how much oil can go up in 2021 with all of the stimulus in the global economy and the massive under-investment in 2020/21

https://www.bloomberg.com/news/articles/2020-04-21/historic-oil-rout-poised-to-bust-shale-trump-s-energy-dominance?sref=dJOSAJZH

On another note..

https://twitter.com/EnergyCynic/status/1252417403733946368

And for those that actually bought WTI at the negative lows -
https://twitter.com/Cap_and_Fade/status/1252635850338418691/photo/1

USO had a limited role to play in the negative WTI story on Monday. They didn't own any May futures that expired yesterday - their current holding is concentrated in the June WTI futures, which are then rolled off into the July WTI futures in Early May, well ahead of their expiry around the 21st of May. It's not like they were selling May futures on Monday for WTI to get those prices to the negative print we saw.

The losers in USO are the retail 'idiots' that are pumping boatloads of money into the ETF, without even having a basic understanding of how it works. USO doesn't work in a contango scenario, let alone a super-contango state that WTI is currently in.

Hello Mod - Yes, I do. I've been trading that one though, took losses when it fell from $5 in January and sold out around $2.70. Brought back in around the 0.55 levels and that went down to 0.25 as you know. It's only up a little today, but if they survive, it should at least get me a buck. And I think they have a decent chance to survive with about a billion dollars in debt and no maturities till 2023. I have a tiny DVN holding - other than these, no other shalers for now. OIl stocks have done well - both in the US and Europe, in the past few days, even with oil plumbing these lows, and that's the market looking ahead to the other side (for now).

Nat gas has been good of late - do you own any stocks in that sector?

Cheers, H. I didn't watch the meeting live, but CNBC reported on that just now. WTI is off $6.66 as I write. ;-)

The issue now is that October futures for Brent have now fallen $4 to $31 with today's front month (July Contract) falling $5. The TRCC decision was a bit of a surprise I suppose, as Ryan Sitton (the outgoing commissioner) was pushing a cut very hard, but it looks the other 2 commissioners had the upper hand. Many hedged producers don't want to cut (MRO, OVV) and subsidise weaker shale and save them from a certain death. That's the way it should be - the weaker ones should die for the longer term health of the market. And if Dems take over the WH in January next year, that'll usher in a $100/bbl oil price in 2022 - that I have no doubt. And with Enquest's lowered costs now - we'll be well over a quid in 2 years.

We just need to get to the other side of the current hump of the epidemic.

And back in the world of Donnie - he wants to bail them out...

https://twitter.com/realDonaldTrump/status/1252591306028785667

Afternoon R - I didn't watch the video, but I do track The USO ETF and 'thankfully', they don't hold the front contract till expiry, but they actuall roll-over to next month about 2 weeks before the front-month expires. They weren't caught out by the negative prices yesterday, but today could be iffy since WTI for June is now down 28% on the day. Retail investors ploughed in billions into the ETF over the past few weeks, and they'd all be butchered today by the down move.

The other problem for this fund is that it's always loss-generating to roll-over when oil is in contango - they'll have to buy higher priced oil (for the next month) when they roll-over from one month to the next month. Did this ETF cause yesterday's move - I doubt it. I do agree that these were a few long traders who didn't want to take delivery and had to sell at any price yesterday.

Front month Brent is cratering today, off $5 (was down $6). WTI June is now off $3.5, after being up $1.5 last night with all the Trump bravado about congress filling up the SPR. I see another couple of months of dislocation and June should bring about a trend to normality, even if slowly.

Here's another piece of news that's speaking to the unmitigated pain in the Permian - Permian Nat gas is -$12/mmBTU versus the $2/mmBTU for the Henry Hub contract.

https://twitter.com/ForexLive/status/1252311625371201542

Shale bankruptcies will shoot up in Q2/Q3 2020 - watch this space. And keep an eye on the link below...

https://www.haynesboone.com/publications/energy-bankruptcy-monitors-and-surveys

I have no doubt that there we'll have a virtual AGM this year; we're only a month out from the AGM date.

The official WTI close today is -$37.63. That's one hell of a broken market and I can't put a finger on that number. Chilting's point about no liquidity could be a factor, but who on earth would sell at that price and make yourself go bankrupt, unless it's just small barrels being sold at the end. I hope this is an epitaph to the useless shalers that have repeatedly F**ked us over in the past couple of years...

Ladies and Gents - this is historic - WTI closed at Minus $35 today. How on earth is that even possible. Down $54 dollars today. SOmeone is Fu**ed, and I can't hazard to guess who..

Not to worry, we'll soldier on...

Can't help but post - it's minus fourteen dollars now...

Romaron - yes, you're spot on what Brent will eventually be impacted by WTI. However, oil shares aren't falling really. the market is digesting this as long term positive for survivors. Brent/WTI will start shooting up in Q3 onwards, and lead to higher stock prices from therein on.

Let this short term carnage destroy shale that they'll take years to come back. THat'll leave Enquest in good shape to bounce hard with oil prices from next quarter on..watch this space - bounce we will.

It's still trading, Chilts. WTI May volumes today are still 20% of June volumes - not as liquid, but still fairly significant that I won't shoot it down as nonsense.

It's -$7 now...

Lol... -$4 now - what can I say?? CNBC TV has an WTI ticker running on live...