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https://www.google.co.uk/amp/s/finance.yahoo.com/amphtml/news/oil-set-for-violent-rebalancing-supply-and-demand-goldman-sachs-153736833.html

what a bunch of..... if they can't see a cut is needed now. more time needed with Attorney General to get opinions..?

Too much politics... the industry will cut production quicker than the TRC.. as there is no storage. Decision might be delayed till 1 June.. at which point Trump might have persuaded most States to open up.. The female Commissioner was rather rude, .. definitely not in favour of a cut.

Minus $35 WTI. I don't even understand it anymore now.

Just saw it flash 0.06

Texas nightmare massacre unless TRC act tomorrow. Will this repeat every month ... yes

Sounds like they have presold all available remaining storage in the US. All the headlines said they had several weeks left, but alas it's all gone. where will it all go ?

Keep it in the ground or Trump will fill up the SPR at $1. What a deal. !

Yeah , WTI $1. Wonder if the TRC will act tomorrow. I suggest 50% in Texas production for 1 year.

Watching US reporters blame Opec + for not taking enough action just sums up the US mentality.

Still haven't heard anything from TRC. How a barrel of Brent oil can cost less than a bucket of chicken from KFC is beyond me. But a barrel of WTI is the less than $5. That's like a Big Mac.

Shut those US wells today.. by order of the TRC. Imv

The free cash flow numbers are only for 2020 and 2021..

I agree you need a higher price to pay for longer term liabilities like decommissioning and debt repayment. Brent at $50 should be sufficient, which is achievable in Q4. But if the world doesn't invest in new capex for 2 years, we have much higher prices in 2022, once everyone has been vaccinated.

Opec + only starts 1 May, so let's give it 6 mths. Clients have been quoted 50% increase in airfreight charges to Africa for April, which makes products very expensive even with low oil prices.

Everyone should wear a mask.

AB confirmed in the Q&A that the free cash flow numbers included all costs.

Saw a very good interview on Bloomberg this morning with CONOCO. Expects oil price recovery in 1 to 2 years, mainly due to glut being created today. It takes time to use up.

Imv Brent can reach $50, with WTI staying at $40 for a significant time, until the higher prices arrive. Ie a super cycle where CONOCO and others like Enquest can sell at much higher prices due to a lack of worldwide capex investment over the next 12 to 24 mths.

https://www.houstonchronicle.com/business/energy/article/ConocoPhillips-to-cut-oil-production-make-deeper-15204930.php

This is good news. I was impressed that one of the TRC talked to Opec, but it's clear businesses like Occidental don't want to cut. They want to keep exports routes open, so they can sell to markets Saudi Arabia normally looks after. That's why Saudi kept the OSP discount to protect its market share. Conoco have taken the lead with production cuts, like many smaller operators in Oklahoma. The rig counts should fall massively in Texas, just like other manufacturers have. Why Texas wants to ponder about the decision is beyond me. Then again maybe it's intentional to ensure a cultural change to sway the likes of Conoco.... and perhaps Occidental at some point.

Wait for Saudi OSP price , later on.

Might be the catalyst

I guess you sold at 13p and never bought back on Thursday. Open 15p/16p on Tuesday. $50 oil gives us a much better 2 yr cash flow outlook. Hence why it might go higher to reflect it.
We pray parts of US and ROW will reopen before Q3 should it be safe to do so, but most would rather just wait for the vaccine.

50% increase on both Enq and Pmo over the week.

The deal was about cutting supply and boosting prices. yes there is lower demand, but refiners in the US shut down at 65% utilisation. Some US refiners may not come back on for some time blocking a route to market for many US producers even though WTi might be rising. Some US producers might have hedged, but without pipeline access may have to shut too. Lower demand in the US has devasting consequences for Shale companies.

If we do see Brent in the $45/$50 range at some point this quarter, I do hope we stick with capex only mode and use the free cash flow to reduce the debt. So long as the discount disappears between screen and actual over the next month, we should get a serious rerating . Back to 30p imv.

Free cash flow break even $33 2020, ....$27 for 2021. Somehow I think Saudi will want prices back to $60 given how much they have cut.. But with a promise from the US they won't complain it's too high.

At one point he said he had hedged all of 2020 production, but I think he made a mistake.

It's definitely q2,.... But perhaps he has the option to continue the variable hedge mechanism for 2H . He might be thinking oil prices will improve in Q3. Q2 is a write off, break even at best.

The US should reopen by 30 June 2020.

Hi Squif, what I think he said is as follows

They have hedged all of Q2 production. Not at a specific price like Q1, but a discount off the screen price. Ie if Brent is $32, they get say $25. Ie breakeven cashflow price. But if Brent moves up in Q2, to say $40, we get say $33. So slightly free cashflow positive. He wouldn't give the exact discount, it might be nearer $5, but it isn't as bad as the discounted prices on the open market which might be nearer $10 discount to screen price.

Kraken production receives better prices , ie bunker fuel qualities. Again, like above, it might be a floating variable hedge based on the screen price, rather than a specific price.

Trump last night said he wanted prices at a level that supported energy jobs and the industry. He expected prices to rise in steps over time .For shale, that needs to be above WTI $50. I believe refiners are deciding to shut when utilisation hits 65% , so this will force US producers to shut in more quickly than they first envisaged. Again when demand picks up, refiners will be slow to restart given existing stocks and lack of storage. Perhaps it possible for prices to rise to $50, with refiners preventing US production increasing to where it was, and a global deal running all the way to 2022 supporting prices as well.

With $50, Enquest has a good margin to delever in 2021, with free cashflow at $27, but I am rather concerned about the non-Kraken discount today . Let's hope it's normalised by Q3 2020 and prices are near Brent $50, which gives us some opportunity to delever supporting a large rise in SP.

Most countries need oil prices at $50 or above to support the economy. G20 look like they see the problem too. Just a matter of time and seeing how Trump wants to play it out in terms of when he wants to restart the US economy. I assume it's when they have produced so many new ventilators that the benefits of restarting outweigh the costs of closure.

Notably that Venezuela has less than 90 ICU units for 32m people.

It sounded good, until he said it was for 3 months. I think it should be for the full year.

I'm glad they have accepted our original business plan of taking old assets and relying on expertise and high oil prices to make a profit has come to an end. Glad we are shutting several assets , focus on best assets and fewer employees. Much leaner , this should become an excellent cash generating company at Brent $50 with the full knowledge it could go higher as Shale production tapers down.

Given the long weekend, best to get in this afternoon for a higher SP on Tuesday. Opec+ only needs to put a deal in place to extend the point at which storage gets full and limit stocks building up so the glut is easier to get rid off. Refiners won't get back to normal for 6 mths, so some producers will be shut in for some time.

Nicely positioned for 15p/16p next week with a positive OPEC/G20 deal. If the US opens up the economy earlier than expected and becomes a net importer in Q4, then Brent will accelerate to $50 much earlier too.