Member Info for hey_arnold

What website do you use freedom4uall?

Question is, why is this so heavily shorted?

Gladstone Capital Management have significantly reduced their short. 0.58%

Thanks for this nhawan

Lots of shorters happy to keep it in a range unfortunately.

It will be interesting to see how this plays out.

Wuhan, the Chinese city where the global coronavirus pandemic began, on Monday reported its first cluster of new infections since a strict quarantine was relaxed in early April.

The setback occurred just over a week before China’s parliament was supposed to convene in Beijing for its delayed annual session, which is usually held in March.

It also coincided with a sharp uptick in new cases in South Korea, where the government’s successful efforts at containing the disease since late January had been hailed as a global model. 

According to Wuhan health authorities, the five cases were discovered on Sunday in a single residential community and linked to an infection reported a day earlier — the first confirmed in the city since April 3. The state council dispatched an inspection team to Wuhan on Sunday and said in a statement that “we cannot ruin the results of what we’ve achieved”.

People in Wuhan and surrounding Hubei province had been barred from leaving their hometowns from late January until April 8 and March 25 respectively. The lifting of restrictions signalled a shift in the Chinese government’s focus from combating locally transmitted cases to ones “imported” from abroad, mostly by returning Chinese nationals.

The slight worry is that we end up back in lockdown and oil tanks again. Hopefully not, but thats the only thing I can see derailing this recovery.

High street retailers will go bust, accelerating the structural transition to more online shopping. Likely to hit 4000+ in the next twelve months.

The smartmoney has been shorting airlines and will continue to short airlines. Some will go bust.

Plus if it gets any worse we just get more stimulus. which is bullish equities

Already priced in.

US crude stocks rose by 4.6 mb, versus the five-year average draw of 1.7 mb. The stockbuild was lower than consensus expectations, likely a function of domestic production shutting in quicker than we or the market had expected. This is also suggested by the adjustment factor swinging negative last week.
Last week’s EIA PSM reported an 87 thousand b/d m/m increase in February US crude production, to 12.83 mb/d—a level that will not be breached again for years, if ever, in our view. Since then, production has turned lower, with shut-ins mounting. We expect US production to fall by 1.38 mb/d y/y across 2020, with an exit-to-exit y/y decline of 2.82 mb/d. Much of the y/y decline will occur in May, when production will be down by 2 mb/d y/y as shut-ins mount. Confirmed shut-ins for May now amount to 1.0 mb/d. This is separate from base declines, which is around 1.2 mb/d for April and May per our estimate. North Dakota alone accounts for nearly 0.4 mb/d of the shut-ins, where over 6,000 wells were idled from February to April. Elsewhere in the US, such as in New Mexico and Oklahoma, regulators have allowed producers to classify noneconomic production as economic waste, allowing them to shut in output without forfeiting lease rights. In the Permian, some operators have shut in wells proactively. Base declines will comprise the remainder of production reductions now that US oil rigs have fallen to 325—the lowest since May 2016—while frac crews dropped to an all-time low of 55 for the week ending 1 May.

https://minenergo.gov.ru/node/17766

Russia "expects to reach maximum cuts in the shortest possible time and is making every effort for it,'' Deputy Energy Minister Pavel Sorokin says about nation's compliance with OPEC+ deal in May

" expect shorts will have another attack on How

After all, it is still highly geared in a very volatile environment"

Who cares, this is all noise. I'll take profit when it gets to 50 in the next 12-18months.

Oil demand should pick up as travel restrictions ease starting in May, while supply should be curbed by OPEC+ and non-OPEC production cuts in 2H. We therefore expect the oil market to be balanced in 3Q and undersupplied in 4Q, and Brent to recover to USD 43/bbl by end-2020 and to USD 55/bbl by mid-2021.

Global travel restrictions resulted in a historic decline in energy demand in April and will likely keep the oil market oversupplied by about 10mbpd in 2Q. Prices plunged to prevent storage limits from being tested; price-induced production cuts have likely reached nearly 4mbpd.

The front of the curve is up (until April21) then the back of the curve is down

More countries are gradually easing social distancing measures and Chinese oil demand is showing signs of picking up, with petrochemical and diesel leading the way. At the same time, evidence that supply is cratering has mounted. We have long forecast that crude draws will begin from June after we hit global tank tops in May. Now it appears supplies are falling faster than we had expected (we expect non-OPEC crude output to tumble by 3.8 mb/d y/y in 2020), so the draws could even start by late May in some parts of the world.
Regardless of exactly when the draws kick in, the sharp decline in supplies might just about help avoid global tank tops, though only barely. Brent could rise to $30 as global containment is avoided, even if tank tops are breached in some regions. A $30 price would not change the supply-demand balance materially as outright prices would still be too low to incentivise any major return of supply. But with stocks at record highs, prices will not rise by more than $5-10.
That said, it is worth noting that visible stockbuilds in both crude and products combined with satellite and cargo-tracking data do not add up to the builds being implied by balances. We forecast crude builds across March and April of 782 mb and only track builds of 450 mb even after including oil on water.
It is possible that demand has outperformed our expectations (still extremely weak, but perhaps 20 mb/d down y/y in April rather than 30 mb/d) or that supplies fell faster and more steeply than we expected. Indeed, while oil prices traded as if it was Armageddon, the expiries of May-20 WTI (cash), Jun-20 Brent and Jun-20 Dubai suggest otherwise. All three ended up in contango of close to $1 vs prompt spreads across the three trading around $3-5 contango (ex-ETF rolls). Refiners may have run harder than expected to utilise cheap crude, which prevented the market from being as oversupplied as we feared. But if so, refining margins will fall back in the coming weeks and crude stocks will build again.

If there is a second wave, I will throw in the towel on investing.

The co-founder of Mercuria believes the oil market has “turned the corner” after one of the worst months in its history. Marco Dunand, who has helped build Mercuria into one of the world’s biggest independent energy traders, said the crash in US crude prices into negative territory in April served as a wake-up call for the industry, which had responded by “aggressively” cutting back output. “There is a certain inertia to closing fields and wells?.?.?.?because there is a cost to close and reopen,” Mr Dunand told the Financial Times. “But I think the scare of Monday [April 20] made some people realise they were better off leaving oil in the ground.” That crash saw US benchmark oil delivery prices briefly drop to minus $40 a barrel, as traders struggled to find storage space for a growing glut of crude. At the same time, oil demand was down by as much as a third worldwide because of travel restrictions and other measures designed to slow the spread of coronavirus. I think we have turned the corner. But if we have a second wave of pandemic then all bets are off Marco Dunand Since then production cuts have increased while some big economies are easing lockdowns. However, the threat of the virus still hangs over the oil market, where prices have plummeted by 70 per cent since January. “I think we have turned the corner,” Mr Dunand said. “But if we have a second wave of pandemic then all bets are off.” Oil prices have started to edge higher in the past week — Brent crude hit $27 on Friday, rebounding from an 18-year low of below $20 a barrel the previous week. Planned production cuts of up to 10 per cent of global supply by Opec members and their allies took effect Friday. Other countries such as Norway have announced their own curbs. Analysts and traders also reckon around 3m barrels a day of North American output is being curtailed because of low prices and limited pipeline capacity. ExxonMobil and Chevron each announced shut-ins of up to 400,000 barrels per day on Friday, much of it from their US shale businesses. Mr Dunand, who has run the company from his house in the Swiss mountains during the crisis, said the oil market could be balanced as soon as June although it would take longer to digest the inventories built up in March and April as oil demand plunged. “Now think about June. There are the Opec cuts — and who knows how much discipline there will be. Add that to North American and bits and bobs like Norway and there could be a reasonably solid 15m b/d cut. The question is what is demand for June? But putting all that together we should have a balanced market,” said Mr Dunand. “A lot of the shale industry still needs $45 to be profitable. Maybe they are better off as part of a major [oil company] who can bring costs down below $40.”