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Opec cuts and the the Russian volume adjustment will not hit the physical number data until September. The Saudis have extended their cut until September. Without reposting, there are so many bullish factors coming into play in the next few months.

This trading range is coming to an end.

Regards

Good afternoon Spights

Looking at the price of oil, I'm guessing tonight's inventory data has been briefed ( leaked ) to the trading cartels.

https://oilprice.com/Energy/Energy-General/Oil-Prices-Stabilize-As-Traders-Await-Inventory-Report.html

Hi Cong

None of us really know what's going on. To quote Warren Buffett " no one knows what the market is going to do tomorrow, next week or next year " so what chance do we have ?

All we can do is look at fundamentals of a company, strategic direction and take a chance that we will be rewarded for staying the course and holding our nerve through volatile times. I intend on holding BP long term and expect ( hope ) to be rewarded handsomely.

On oil. The API US crude inventories data will be released tonight at 20.30 GMT and the IEA's data will be published on Thursday. Large draws should support the price of oil and possibly push oil higher.

Have a great day

Morning Cong

It's just a matter of time before BP moves upwards again.

We are in the summer trading period. In general share prices tend to fall over the summer months as fund managers and the big institutional traders go on their hols.

Trading volumes and liquidity are always lower over the summer season.

Fund managers and Institutional investors sell some of their shares / assets before they go on their hols so that their investments are at less risk of taking a big hit if markets fall or global economic events happen suddenly while they are not at their trading desks to be able to respond. BP was £5.34 on 28th April and £4.76 4th May, one week later. So it is possible that part of the drop is due to profit taking before the summer season. The old saying goes "Sell in May and go away, don't come back till St Leger Day" so ell shares in May and buy them back in September.

This may explain why BP has been stuck in its current trading range since May. I expect a slow recovery in the share price until September. By that time, the bullish data on oil supply / demand will be clear and established and the lag in share price reaction to higher oil price should be addressed.

Hi Weirdpal

It makes you wonder how such manipulation can be legal ?

Oh hang on, I just remembered that its not !!!!

I'm sure they will investigate !!

The power of the market due to $$$$$$

The weakness of regulation also due to $$$$$$

Hi Spights

Sounds like a fun weekend.

Thanks for posting the article.

Reasons to be cheerful 1, 2, 3.

1. The cut in Opec supply will take a few weeks to feed through to supply and price. The Saudi cuts have been extended to September and possibly further.

2. Last week was the first week of no releases / dumping from the SPR on to the market. In Biden's first two years in office he dumped 288 million barrels on the market to suppress prices. This year he dumped a further 28 million. This is now finished.

In a complete reversal, the US Department of Energy announced in May and June two 6 million barrel purchases, so 12 million barrels in total to start replenishing the SPR. So 12 million barrels off the market with announced purchases in be completed by AUGUST 2023.

Where would the price of oil be without that massive dump and, more interestingly, where is the price going to go now. !!

3. From Bloomberg today

2.3 million b/d deficit in Q3-2023

1.7 million b/d deficit in H2-2023

Going to dig deeply into inventories.

China/India/US showing decent strength and growing demand.

Just a relaxed waiting game for now. Traders back at work September just as all bullish oil data hits.

That was more than 3 I know. !!!

Take care. Onwards...........

good afternoon spights

i hope all's well with you.

i'm looking forward to the results and an update on the transition and other 'growth engines' as looney calls them. it is easy to forget that, at present, the transition has zero value to the business. this is understandable and until some actual roi guidance can be provided this will continue to be the case. i hope this will happen at the next presentation.

news has been sp**** but we know that there are many exciting projects and partnerships on the go. i expect an exciting and lucrative future ahead.

it was disappointing to drop from 570 ( with the benefit of hindsight, 570 seemed a bit toppy ) but i am more confident of onwards and upwards than ever. i expect the next climb will have more substance, support and reason for it.

have a great day all

Hi meoryou

It's impossible to predict what level oil will go to but $100 is not only possible, its probable over the next few years and that would be historically cheap at that level taking into account inflation.

Here is the average yearly price of Brent from 2008 ( 2008 global financial crash and recession) to 2014. Taking into account inflation you can see how cheap Brent would be at $100 pb today.

Brent yearly average 2008-2014

2014 $98.97

2013 $108.56

2012 $111.57

2011 $111.26

2010 $79.6

2009 $61.74

2008 $96.94

Throw into the mix the lack of exploration and investment over recent years causing oil supply concerns . Recession or not in the west, ( the last recession did not impact the demand / price of oil much as shown ) the demand from India, Asia, China is increasing. If oil is $80 now with all the negative sentiment, inflation worries, interest rates etc we can take an educated guess what direction oil is going to go once the uncertainty and worry subsides.

So the good old days of relatively cheaper oil 2015 -2021 are gone for the foreseeable.

Morning meoryou

Previously the physical market drove oil prices and the poo was never so volatile. Enter the trading cowboys ( and girls ) of the wild West financial (paper) market....

The two markets are, the physical market, which is the largest commodity in the world, and the paper (financial) market for oil. The paper market is 30 times bigger than the physical market. So you can see where the volatility comes from.

The physical market currently healthy and improving week by week, as measured by inventory data and direction , and global supply and demand This is just starting to be seen now, yet the financial oil market is surpressed, due to things like fears of a recession, narrative on interest rates etc and due the the size of the paper market it can overwhelm positive underlying fundamentals in the physical market as we are currently witnessing, leading to oil prices falling or being suppressed despite the fundamental physical strength of demand and weakness of supply.

We need to see a number of weeks of positive physical market news on inventory draws, demand etc. together with peak interest rate hikes ( one or two months to go, I guess ) before the physical market drives price direction.

This has commenced and, I believe, we will see oil rise over the coming months and with a lag drive BP up with it.

Just finally on Open story....

Reuters were the ones in cahoots with the traders.

"Saudi Arabian oil news about Saudi cuts through 12/24 was a repeat of a release on June 4th and has been withdrawn by Reuters"

Shenanigans, manipulation and some oil trader's just made a fortune.

The Opec ' announcement ' has now been withdrawn as inaccurate. It was a repeat of a previous Opec member's comment.

The inaccurate headline purposely posted on one of the wires was withdrawn that referenced an extension to Saudi's voluntary cuts.

This did seem unusual as Opec are usually disciplined in announcements and are usually only made at the beginning of the month after Opec meetings.

Nevertheless, oil will rise on the supply/demand deficit starting to play out this month onwards.

EC

You witnessed an example of just how much oil is manipulated by the paper ( trading) market. These movement are disconnected from the physical market.

Even without this news oil is going to rise over the coming months due to supply issues. Ignore the narrative attempting to suppress oil. Oil will fly and oil equities will follow.

Saudi Arabia Will Extend Its Voluntary Cut Until The End Of December 2024 -Ministry Of Energy

Afternoon all.

Most oil majors and smaller independents are down today despite the recent oil rise.. As frustrating and head scratching as this may be there really are no fundamental reasons for this. I believe this is just a lag between oil and equity movement that will be rectified in time.

The price of oil may also be pausing and consolidating at this level prior to a push higher that should materialise over the next few months or at least a stabilisation at $80+ (barring short term volatility ). This will grow future profits from Q2 as we move into H2 and beyond and, as night follows day, oil equities will follow oil upwards.

In my opinion, the time to be invested in companies who produce and distributie oil and gas is now and my guess is that the next six to nine months will be ery rewarding to those who an stay the rocky course.

Oil is up, opinion for demand is more bullish by the week, profits will increase. Patience will be rewarded.

For those who judge BP's SP performance against the US majors, here's some year to date data.

American Upstream Oil & Gas stocks year to date

COP is down -0.1%

CVX is down -7.8%

DVN is down -9.2%

MRO is down -1.2%

OXY is up 1.2%

XOM is down -0.2%

BP is ( still ) up 8.7%

Just a positive to take into the weekend

Have a great weekend all.

Good morning all.

Onwards and upwards and steady as she goes.

Excellent posts and opinion from contributors as usual over the past few days so thanks to all.

Two weeks on from my bullish posts on supply and demand and the future direction of oil and oil equities all seems to be starting to come to fruition. No special insight here just the coming together of a number of positive factors as previously posted. In my opinion, the recovery is just beginning

Add to the mix, increasing recognition of supply issues moving into H2. Increasing long positions being taken in oil and shorts closing and taking profits. In addition, the recent rally in growth stocks ( Tech ) could be nearing an end for now with volumes down and a rotation to value could be underway after the recent value equities drop that we all have suffered from.

Nothing is certain and predicting oil/ equities direction is a fools game but with a fair wind I would not be surprised to see a recovery to recent highs and beyond by the year end/early 2024. A share price crawl up to and beyond Q2 results and then an acceleration from mid September onwards would be my foolish guess.

Have a great day all.

Thanks Spights

Same to you for your daily livechart and optimistic outlook posts and there are many reasons to be positive despite the recent fall. I have topped up a number of times on the way down with all these top ups being under water. Not perfect timing but I would not rule out a return to previous recent highs by the end '23.

Just for fun. I'm going to call a positive end to the day today and after tonight's IEA data a positive day tomorrow.

Let's see. Great afternoon all

Hi Theaky

Thank you. The investments in the transition are wide and vast and have zero value to date. I am looking forward to some meat on the bones at Q2 also. By 2025 they have previously stated they plan to produce 25GW of renewable energy so only two years or less to go and 50GW by 2030. This is on par with Orsted's targets. A company ( from memory ) valued at around £30 billion !!

Here's a positive article, albeit from fool.

https://www.fool.co.uk/2023/07/04/new-field-start-up-and-china-recovery-makes-bp-share-price-look-cheap-to-me/

Have a great day.

Hi meoryou

I expect that the data is already probably released to some 'insiders' prior to the official release and the movement in the price of oil prior to release gives me reason to be positive.

With all the negative narrative around on interest rates, demand worries, global recession, China slowdown etc etc demand for oil is still expected to be at record levels this year.

Here's the IEA market report from June 2023

"The IEA Oil Market Report (OMR) is one of the world's most authoritative and timely sources of data, forecasts and analysis on the global oil market – including detailed statistics and commentary on oil supply, demand, inventories, prices and refining activity, as well as oil trade for IEA and selected non-IEA countries.

About this report

World oil demand will grow by 2.4 mb/d in 2023 to 102.3 mb/d, a new record. China’s rebound continues unabated, with its oil demand reaching an all-time high of 16.3 mb/d in April. The non-OECD accounts for 90% of gains this year, as OECD demand remains lacklustre amid the current manufacturing slump. An increasingly adverse macroeconomic climate will act as a headwind in 2024, and as the post-pandemic recovery will largely have run its course, oil demand growth is set to slow to 860 kb/d.

Non-OPEC+ leads world supply growth through next year, adding 1.9 mb/d in 2023 and 1.2 mb/d in 2024. As for OPEC+, total oil output in 2024 is set to decline by 200 kb/d as production curbs are carried through the year. Total oil supply is forecast to reach record high levels of 101.3 mb/d this year and 102.3 mb/d next year. In May, world oil supply fell by 660 kb/d to 100.6 mb/d after extra cuts from some OPEC+ producers kicked in. Saudi Arabia has promised to curb output by a further 1 mb/d in August."

So record oil demand with all the uncertainties. Now if those uncertainties decline, if the slowdown in China turns around, if non OECD countries demand more supply and with supply already tight it is clear what would happen to the price of oil and oil equities in my opinion.

We need a few months of positive oil data for fundamentals to trump sentiment.

All the best

Good morning all

Broker recommendations are like horoscopes. Both are meaningless but I would rather read a positive one than a negative. Brokers always follow the trend and announce adjustments after share price movements. Barclays still have £10 which was an upgrade from £7 that was never achieved. It's all semi interesting nonsense. Once the SP rises analysts will follow with upgrades just as they have announced downgrades 'after' the share price has fallen by 20%. Hardly rocket science.

On a bright note, AIP US data released yesterday showed a possible draw of 4.4mb last week ( w/e 30/06 ) against an estimate of 1.8mb from US crude inventories. This is an upward weekly trend. The IEA announce their data later today.

To reiterate a previous post. As of this week, the SPR releases end and replenishing begins. The Saudi 1m cut will hit supply this week and for at least the next two months. Peak summer driving season is recognised to commence early July and it seems the price of oil is rising due to these factors.

I'm guessing we will rise slowly from here out of the recent trading range with zigzagging northwards and a pick up after volumes and traders return in September.

GLA