Member Info for MarcelKrell

Beevorma, if you read the article, it says that in fact there is *no cut* at all taking place, since the base level is higher than it realistically is.

Shocking lol.

" To put it into historical – and real – terms, the average Saudi production from 1973 to the beginning of this year was 8.15 million barrels per day. This means that the Saudis are not in reality cutting production at all, it is just going to cut back on the use of its oil inventory, which it cannot afford to keep squandering at such low prices anyway. Russia, in the meantime, is geared up to produce around 11 million bpd anyhow – the baseline figure – so again ***this effectively means no cut***, and even if the baseline figure was lower, Russia would take no notice and produce whatever it wanted, as it has done for every OPEC+ deal with which it has been involved, since the first agreed cut in December 2016."

"Quite aside from the subtler elements of the oil deal announced late last week that are likely to undermine its ability to stave off further oil price lows in the coming weeks, the basic facts of the deal are sufficient to do so: global supply is to be cut by (sort of) 10 million barrels per day (bpd) whilst global demand has fallen by around 30 million bpd. That is really all anyone needs to know and is the key reason why oil prices are likely to continue to test the downside of recent lows and to surpass them over time. Terrible though these raw figures look, ***the overall deal itself is much worse the more that it is examined in depth***, as it is below: "

https://oilprice.com/Energy/Crude-Oil/The-Sad-Truth-About-The-OPEC-Production-Cut.html

LOL 2: Shale is (will be) gone (?)

Coronavirus could kill fracking “fever dream.” ***The U.S. shale industry has never demonstrated profitability and has been built on a decade of cheap capital***. “The dream was always an illusion,” Bethany McLean writes in the New York Times. “All that’s left to tally is the damage.”

https://www.nytimes.com/2020/04/10/opinion/coronavirus-texas-fracking-layoffs.html?mkt_tok=eyJpIjoiTVRZNU9HRTVNak01WVRNdyIsInQiOiJqZG9vVDQya0J4XC9kQTZHZnFMYlk5RWdSeXB6UlE1Q1RRNDhwZkNQbVJtODFsaTNudU03Z2lKaUFhc0hsblpWQkRLNVhDQUFcL2N0T0lVdnZBNFhWQzEyS3Q3RnVYS1o4Z09JMTcwM1pJbENrZjZmN1h5VWhzM2ZXQTk5UEpQbVA5In0%3D

LOL: (?)

"Flood of Saudi oil heading to U.S. Saudi Arabia is sending “a flood” of oil to the U.S. Gulf Coast, according to Bloomberg, with an estimated 14 million barrels en route, compared to just 2 million barrels a month ago. "

https://www.bloomberg.com/news/articles/2020-04-08/saudi-crude-oil-armada-heads-for-u-s-after-opec-collapse

Clear conclusion: (for these months)

"Demand loss at 20-30 mb/d. The OPEC+ deal is historically large, but still insufficient to plug a 20 to 30 mb/d decline in demand. Inventories are set to rise in the coming months. “The proposed 10 million bpd cut by OPEC+ for May and June will keep the world from physically testing the limits of storage capacity and save prices from falling into a deep abyss, but it will still not restore the desired market balance,” Rystad Energy said."

"Analysts say cuts are too little, too late. Other analysts also said the risk is to the downside. “These cuts are not enough to prevent massive stockbuilds in May, let alone April,” JBC Energy wrote in a note. Oil prices could fall back despite the cuts. "

https://oilprice.com/Energy/Energy-General/Oil-Prices-Crash-Towards-20-Despite-Historic-Cuts.html

https://oilprice.com/Energy/Energy-General/Rig-Count-Collapse-Continues-Despite-Historic-Global-Oil-Deal.html

"The EIA’s estimate for the week is that oil production in the United States fell to 12.4 million barrels of oil per day on average this week, which is 600,000 bpd off the all-time high. It is the lowest production level since September last year."

Do you have a link?

I even don't know how it works with hedged oil for Tullow? If they can't sell their oil at all, do they still get the price that is hedged? Anybody?

I assume they get paid no matter what, right? Anybody?

No, no short. I and Shpunken said this some time ago, regarding the upcoming months.

"At the same time, oil storage tanks across the world are filling up, sparking fears that we will soon reach capacity. When this happens, current prices will seem high by comparison. There is also a looming shortage of tankers as traders charter VLCCs to store crude offshore. The cherry on top of this oil horror cake is the uncertainty about a global production cut deal. "

For these months it will be (I can't see it any other way) south for oil. But what it will do for Tullow (which is hedged): I have NO CLUE, whatsoever. :)

Question is: what kind of effect will all this have on the recent spike of the Tullow share price? One would assume that we go south, but how much. Because Oil prices (low demand) are here for the coming months... that is almost a fact of life now.

What I *need* to do is sell the block that I purchased at 13 recently, and wait. But it's hard... :)

But imo it is a no brainer that oil stock goes south again, these months...

https://oilprice.com/Energy/Crude-Oil/OPEC-Deal-Wont-Solve-The-Oil-Storage-Crisis.html

"The problem is, even a global deal may not be enough for the physical market. A deal could prop up prices, but it won’t *magically* revive demand, which, according to the latest reports."

Regarding China: " It is way too early to say how long China’s full recovery will take, but the renewed interest of Chinese buyers in oil is certainly cause for hope that the nightmare will end **eventually**. "

For the moment, there is no way to go for oil prices these months... than South.

"In a separate report, Goldman Sachs said that even if OPEC+ manages to cobble together 10 mb/d of cuts, another 4 mb/d of “cuts” from market-induced shut-ins are likely. As a result, while there could be a short price rally from the announcement from OPEC+, “this support will soon give way to lower prices with downside risk to our near-term WTI $20/bbl forecast,” Goldman said. “Ultimately, the size of the demand shock is ***simply too large*** for a coordinated supply cut, setting the stage for a severe rebalancing.”

"The hit to demand will “last longer” than previously expected, as more countries impose lockdown orders while “the spread of the virus will resist restrictions more than we first expected,” the firm said. Rystad sees a demand hit of around 20 mb/d in May and more than 15 mb/d in *June*. Demand growth remains negative for the duration of 2020."

https://www.rystadenergy.com/globalassets/pdfs/rystad-energy_covid-19-report_7-april_2020_final-public-version.pdf?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosgenerate&stream=top

Happy Easter,

https://oilprice.com/Energy/Oil-Prices/Oil-Could-Fall-Back-To-20.html

"Oil demand is set to plunge by as much as **27 million barrels** per day (mb/d) in April, a decline larger than anything that has occurred in the history of oil."

In the end it will be all good, but April, May... June?

https://oilprice.com/Energy/Energy-General/Oil-Industry-Unlikely-To-See-A-Bailout-Anytime-Soon.html

"What the industry worldwide is facing are these daunting predictions:

***Oil demand could fall by more than 30 million bpd in April ***(or, by nearly one-third of daily fuel consumption), according to global commodities trader Trafigura.

Global oil consumption was expected to fall by a record-breaking 12 million bpd (12%) in Q1 2020, according to the Bank of America. ***And we’re just getting started***."

"The supergiants, Trump says, aren’t asking for a bailout--nor do they want Trump to intervene in the Russian-Saudi oil price war on their behalf.

It’s the smaller U.S. shale patch players--such as Pioneer Natural Resources and Continental Resources--who are in big trouble, and who are itching for a bailout plus a geopolitical intervention. They would love to see U.S. tariffs, for instance. At this point, however, that seems rather unlikely. "

But there may well be another reason for the government to continue with its Pemex production growth strategy: the notorious oil hedge.

“Everything” in the Mexican budget that needs to be covered by oil revenues is covered, the country’s Finance Minister, Arturo Herrera, said last month in response to questions about the well-being of Pemex, which has a direct bearing on the well-being of Mexico’s finance. The country hedged its oil exports at $49 per barrel this year, in put options worth $1.4 billion.

Already posted?

https://oilprice.com/Energy/Crude-Oil/Mexico-Rejects-Global-Plan-To-Cut-Oil-Production.html

"Mexico is on the path of production growth, and it seems that no oil price collapse can divert it from it. Unless OPEC+, of which the country is part, doesn’t ask it to put its production growth plans on hold."

"Time is ticking. Demand will keep prices at painfully low levels for U.S. oil producers **for the coming months**, so this is the opportune time to hammer out a long-term deal. It will be in OPEC’s interest to keep the price of Brent close to $30 level during this negotiating period."

So many opinion, I'm curious to see what will happen.

Wall Street Journal:

"With a single tweet Thursday, President Donald Trump accomplished what decades of wars, coups, terrorist attacks and OPEC meetings hadn’t, sending the price of the world’s most important commodity up by nearly half in a trading session.

Keeping it up won’t be as easy. By the end of the session, Brent crude, the global benchmark, had given back much of its initial price gain. Part of the problem is that Mr. Trump’s assertion doesn’t appear to have been true. ***The bigger one is that it might not matter."***

The World needs to cut 15-20 million a day to balance demand. Will the little countries go along with a cut, imo?

https://www.wsj.com/articles/this-oil-rally-cant-last-11585869453