Member Info for MarcelKrell

Drake, I understand what you are saying, but in the end it should come down to 'sheer demand' or lack thereof ?

If that 'demand' part falls behind on the prognoses, due to a tougher restart of the economy this year... I'm not sure if the parties involved just can push some buttons to keep the price in (or pointed to) the desired range, during the coming months?

ColonelDrake:

You earlier said:

"t's understandable to see the Oil price swinging around as traders try and repair the nose bleed squeeze that happened after Trump's initial tweet some weeks ago. But that was a tweet and at that time, it was uncetain times for oil market where Saudi and Russia are concerned. But things are different now. There is greater insight and knowledge around Corona. There is no oil war any more. Much has changed. What hasn't changed is oil demand falling off a cliff. But in time it will come back as lock downs are lifted. So with all that out of the way, there's absolutely no reason for ENQ or otheroil companies to be trading back at levels when all the above were unknowns. A lot of risk has been removed over the last few weeks and I suspect with global moves to buy up the glut in times of strategic reserves, whether China, India, Chile, Mexico ... doesn't really matter. The point is, oil is cheap and they want to store it at these levels before it rises in the future."

But it now could take a bit longer, the V-shape recovery that everyone expects, could turn out to be a more battered V-shape... you said everything is known about Corona, but... even with a top being passed, the world can't go back into full speed modus right after that... so question is: has this been priced in right now?

Nice read on shorting Shale:

https://oilprice.com/Energy/Energy-General/The-Big-Shale-Short-Twitter-Traders-Make-Millions-On-The-Oil-Price-Crash.html

"The Million-Dollar Payoffs

Some of those traders made millions off the price crash in early March.

BRV @WillRayValentin, for example, told Reuters he made US$4 million in the week March 9-16, when oil prices collapsed in the wake of the OPEC+ break-up and the start of Saudi Arabia’s price war for market share.

“It was like picking money up off the street,” BRV told Reuters on the phone.

“I’m probably short every stock I mention,” BRV’s Twitter profile reads."

Oops:

"Current WTI and Brent futures assume $40 per barrel in 2021, based largely on the hopes of a V-shaped bounce back. Schieldrop said that there is a “high risk” that the optimism surrounding a V-shaped recovery will be dashed in the next two months, which could ***reset price expectations for the next year or two***."

https://oilprice.com/Energy/Energy-General/Oil-Demand-Wont-Bounce-Back-Any-Time-Soon.html

"But there are multiple reasons why the global economy may not return to anything close to “normal” even by the end of 2020"

We'll see.

https://www.houstonchronicle.com/business/energy/article/Crude-oil-storage-tanks-filling-up-as-gasoline-15202290.php

"Crude oil storage tanks in the United States are nearly ***65 percent full*** as record low commodity prices and falling fuel demand due to the coronavirus pandemic continue to take their toll on the industry.

Only 65%? Then we have some left to go...

https://oilprice.com/Energy/Crude-Oil/Coronavirus-Has-Wiped-Out-A-Decade-Of-Oil-Demand-Growth.html

"But the destruction in oil demand is both larger and much more immediate. April demand is expected to be down by ***29 mb/d***, according to the International Energy Agency (IEA). Oddly, so many forecasts from investment banks have predicted a V-shaped recovery for the global economy, but that scenario appears increasingly optimistic. "

Oops.

https://oilprice.com/Energy/Energy-General/OPEC-Powerless-As-Oil-Prices-Near-20.html

Nice round up

https://oilprice.com/Energy/Crude-Oil/US-Oil-Drilling-Grinds-To-A-Halt-At-Key-Shale-Hotspots.html

"A more worrying prospect for U.S. shale is that the OPEC+ deal, as ineffectual as it was at boosting prices, may not prove sustainable. “The current deal has been forged under duress and is much more likely to fall apart over time,”

Altough you did not have to be a rocket scientist: Me was right. I only wished that I sold the (part) TLW shares that I bought at 13... did not have the balls, since you never know what happens. Shoot.

And even now I'm afraid to sell that part of my shares, although it will go lower for sur, imo.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Hits-20-After-API-Reports-Mega-Crude-Inventory-Build.html

"As Bloomberg notes, The International Monetary Fund predicted the “Great Lockdown” recession would be the steepest in *****almost a century***** and warned the world economy’s contraction and recovery would be worse than anticipated **if the coronavirus lingers or returns**."

https://oilprice.com/Energy/Oil-Prices/Oil-Prices-Plunge-On-Grim-IMF-Economic-Forecast.html

As if oil prices needed any more help on their downward spiral towards the teens, The IMF just slashed global growth to the worst ***since the '30s***.

“This crisis is like no other,” Gita Gopinath, the IMF’s chief economist, wrote in a foreword to its semi-annual report.""

Link: https://oilprice.com/Latest-Energy-News/World-News/Texas-Oil-Regulators-Could-Mandate-20-Output-Cuts.html

"Texas Oil Regulators Could Mandate 20% Output Cuts"

Like *anybody* has a choice.... lol.

Texas Oil Regulators Could Mandate 20% Output Cuts

Demand has fallen up to 30%, current cuts: 10% (approx). We are nearing a brick wall... "Mandatory" will be the word.

And I don't rule out another round of Big Shorters taking a go at Tullow again, during these weeks leading up to full oil storage, and beyond for a while.

I agree Shpuken. Like I said: 'Corona' rules (will rule) everything. Certainly from the moment of 'full oil storage'.

I expect that when we are closing in on that moment of full oil storage, the oil price will drop like a brick, on the news that shut-in's are becoming mandatory.

From that point on 'Corona' will determine the pace of oil price recovery.

Somewhere in May when oil storage is full, bam!

All eyes are on Corona, demand needs to come back again. I think we will see volatile oil prices, until good news regarding Corona comes out, since (lack of) 'demand' rules.

OOPS...

"There is disagreement on how long it would take the global oil industry to work off a historic buildup of inventories, were the surplus to reach the 900 million to one billion barrels analysts are calculating in the worst-case scenario. In 2015, when oil prices were cratering, surplus inventories ended the year at 593 million barrels and took ****two years of concerted producer cutbacks****, led by Saudi Arabia, to run down. But that was when the global economy was humming at a 3.5 percent increase per year in Gross Domestic Product (GDP). Presumably, *****this time around, it could take longer.***** "

https://www.cfr.org/blog/oil-ground-zero-running-out-storage

***OPEC+ production cuts won’t save traders from storage squeeze***

http://www.worldoil.com/news/2020/4/13/opecplus-production-cuts-won-t-save-traders-from-storage-squeeze

This is our current main problem: Corona rules!

"Trafigura Group sees oil use plunging by as much as *****35 million barrels daily *****-- roughly a third of normal global output -- as countries prolong lockdowns over the coronavirus."

As I understand it ALL oil storage if full by half of May.