Member Info for MarcelKrell

"The current optimism of analysts and the media that an end to the ongoing OPEC+ oil price spat is near is entirely unjustified."

We're not out of the woods yet…

https://oilprice.com/Energy/Energy-General/What-Really-Caused-Oil-To-Rally-By-25.html

"This should be prefaced with the fact that nobody knows what will happen and that the onset of a global pandemic means that all of the old rules are thrown out the window. Anything can happen in the context of the greatest public health and economic crisis in a century. "

"Oil prices jumped sharply on Trump’s tweet, but his assertion raises more questions than answers. While international diplomacy does seem to be accelerating, a massive unilateral cut from Saudi Arabia, or even a bilateral cut with Russia, remains highly unlikely. "

I think that April and May still can be extreme volatile.

Oiluser, I agree. Saudi tankerships had nowhere to go already. But: another round of bad news out of China: new lockdown in a region. I assume Corona will take a few months from here, with less oil consumption worldwide.

I think April & May will be problematic, after that a rise. For TLW no problem I reckon.

Although I don't know how a hedged oil price works for TLW, if oil cannot be sold at all… anybody?

" Even if Saudi Arabia gets the UAE, Iraq and other non-OPEC members such as Brazil, Canada, Kazakhstan, Norway, Mexico, and Azerbaijan to make additional output cuts, this will still not be enough to counter the coronavirus impact on the markets in the short term. All of this seems highly unlikely unless US producers will agree to force production cuts upon themselves (like Canadian producers did last year), **something that US President Trump did not mention in his tweet**. "

https://oilprice.com/Energy/Energy-General/Why-A-15-Million-Bpd-Cut-Will-Never-Happen.html

With global oil demand potentially crashing 30 million bpd in April/May, every producer is feeling the pain, but even a multilateral output cut that would involve all G20 producers isn’t likely to keep inventories from ballooning and prices from falling.

***The oil rally caused by Trump’s tweet is likely to fade.***
Like I said: CORONA rules for the moment.

Sorry, link: https://www.reuters.com/article/us-global-oil-shale-costs-analysis/few-u-s-shale-firms-can-withstand-prolonged-oil-price-war-idUSKBN2130HL

Wow: only 16 U.S. shale companies can make money at oil prices below $35 per barrel as per Rystad Energy via Reuters.

only 16 U.S. shale companies can make money at oil prices below $35 per barrel as per Rystad Energy via Reuters.

I think MBS/Putin will be satisfied with the below conclusion, early May:

"A prolonged oil price war could threaten the survival of hundreds of U.S. shale companies, with as many as 50% likely to face bankruptcy sooner rather than later.
With oil appearing to be holding steady just above $20 a barrel, Mark Newton of Newton Advisors has told CNBC's Trading Nation that he believes that the low isn't in yet for crude."

I think that in May CORONA is the only one left standing in this multiple fight.

"Any agreements to cut supply by either party at this juncture are, however, likely to be a case of too little too late, with trading house Vitol projecting global demand to fall by as many as ***30 million bpd in April*** amid a crippling global pandemic."

I see this happening, but that would not be for long. So maybe May won't be so bad after all, in perspective.

I hope to see you back in the 50's level, where we were before Corona/MBS/Putin…

But... reminder... the real problem now is CORONA.

"But given the size of the demand shock, the attempts to negotiate are “likely too little too late” for the oil market, Goldman concluded. "

I think when Corona starts to peek very clearly in countries around the world, not the least in the US of A... we are on are way back in terms of TLW share price.

When will Corona peek? At max in two months imo.

More lol:

"It may not be all smooth sailing. The Wall Street Journal reports that Aramco is struggling to find a home for all the additional supply. Some ships are departing from Saudi shores with oil but have no destination. “There are loadings [from Saudi ports in the Persian Gulf] with no destination on them because we don’t have buyers,” a Saudi official told the WSJ."

A child understands that this situation will not last for 'years'... lol.

"At the same time, Russia and Saudi Arabia won’t escape unscathed. Goldman Sachs says that Russia may also face shut-ins. “Russia will likely be required to shut-in production given the inland nature of its production and the decline in refinery runs happening in its European pipeline export market,” the investment bank said. Moscow may want to get ahead of this problem and use it as a carrot to entice cuts from elsewhere. "

As Liam Denning put it in Bloomberg Opinion: “The long arc of the American dream of energy independence, having recently soared Icarus-like toward energy dominance, has finally crashed ignominiously into energy incoherence.”

Lol, but true.

Can U.S. Shale Survive?

The U.S. shale oil and gas industry was facing an uncertain future long before the oil price war and consequent market crash thanks to burgeoning supplies, lackluster prices, increasing competition from renewable energy, and dwindling capital that pushed a record number of companies into bankruptcy.

"As with the last oil bust, only the most robust, best-financed, and most efficient shale companies are likely to survive if prices remain depressed over a long period, once again reshaping an industry into one that is leaner and smaller. Pundits have already warned of a fresh wave of defaults and Chapter 11 bankruptcies this year, with oilfield services companies seen as being especially vulnerable. Dozens of shale companies have started idling rigs in the Permian while scores have announced dramatic cuts in shareholders programs, including share buybacks and dividends.
Despite the neverending turmoil, the U.S. shale sector is likely to survive the latest bust thanks to oil demand, which is expected to continue growing over the long term.
Consolidation and bankruptcy are actually good things for the bloated industry because it will help pool resources among the stronger remaining players, thus making for a more resilient sector in the coming years."

This is not entirely true, as another article pointed out very clear, recently. The reality will be somewhere in the middle: way, way less shale probably.

So we need to keep an eye on the Shale boys going down, the sooner that happens the better for TLW.

And how long for Corona? 3 months **max**, before things get (slowly, or modestly) back to the normal pace?

But then again…

"Bottom-line, U.S. shale appears to be on an unavoidable rapid decline. That is bad news for a lot of companies that depend on this activity for their daily bread. The good news is this will inevitably drive higher prices and the growth cycle for energy will begin again."

“Uday Turaga, the chief executive officer of oil and gas consultancy ADI Analytics, offered two reasons. The first is that many shale players have hedged large volumes of oil sales in the $50-range through 2020. The other is that shale producers remain too optimistic on the chances of a price recovery coming by year’s end
“We don’t see prices and demand rising before 2021,” shared Turaga. “So this approach of cutting just drilling and not completion of wells in inventory is insufficient—they need to go beyond and have a material impact on production volumes."

https://oilprice.com/Energy/Crude-Oil/Texas-Oil-Drillers-Prepare-To-Halt-Production.html

"There is a catch, however. According to Sitton, Texas will not resort to production cuts unless Saudi Arabia and Russia agree to the cut, too."

Lol.

"“April was sold quite ahead of time as refiners plan several months in advance but May will not be good. All the grades will need more downward corrections,” one trader said."