The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Jeffrey the inventories build was due to refineries shut downs as you can see WTI went up and is rallying
Don't look at the headline figures in isolation always look at import / export , remember the SPR and above all the refinery utilisation which was low. The big freeze they had all the way down to Texas stopped a lot of the refineries
Lots of buying at these low levels . Good to see if only from a very low point.
either the Tories or Labour think as its clear from the last licensing of fields fiasco that the UK won't have an oil and gas industry anymore as it will progressively move away . Why is the general public so happy with this ? We will have to import that mythical energy that provides electricity from somewhere and that somewhere will dictate terms to us .
I really don't believe that those saying EVs are the future and electricity will somehow appear out of no where have thought this through properly . The world added 280m people since just pre Covid so from 2019 , and despite the rate at which we add people has slowed , that nominal is HUGE . Where is all this energy supply going to come from ? Are they counting on having Covid forever ? Even that will eventually move away .
This windfall tax has done a massive dis service to all in my view. We had an advantage and we blew it
Think Exxon is taking the EU to court on the EU windfall taxes.
To me it shows that the governments in general have no clue on how to run a bath given that taxation has done nothing but rise across the western world . It rises yet we don't see the benefits and those earning a good wage have to work longer and longer hours . Taxation is proven to be nothing but theft as it takes away from the productive to hand over to the corrupt and inefficient government Con or Lab , is like Dumb and Dumber . Its a terrible situation that somehow people at the ballot boxes are happy to sustain
Approaching 4 Enq for 1 Brent . That ratio usually means we are closer to a buy than a sell and in the last 7 years has been doing nothing but rise . Very weird , and seeing Enquest down . LIke or not even today debt will be down a little and same as post windfall tax revenues will be adding value, so despite that price falls . Am now miles away from my average
downbutnotout am a bigger idiot at the moment averaged at 376p , I mean today its like priced less than old Premier OIl alone. Not making sense with the long list we all know of big improvements since. Clearly am wrong as price is what it is but nothing wrong with Brent at 80 and UK Gas where it is vs where it was. Gas is still a multiple of where we are hedged or were hedged. In fact this was priced better when HBR had hedges at 47p Gas !
Windfall tax on a Brent price that is normal and Gas that may normalise , hardly fair and not surprised HBR went for zero licences if I read well . They are shifting focus out of the UK greedy taxation
Post UK close Brent rallied even more now up over 3% . Santa Rally to come at this rate . Last year in Dec we rallied till into Jan , paused then rallied till May in the high 30s . This year could repeat that and given lower debt could beat it ? Hope so , history tends to ryhme
Well as I see a big draw next week again , and China ramping up consumption just as Russia is being cut off from exporting these desperate levels are enticing me to lower my average in the face of what could be the low point . Even though the front 2 months are in slight contango the rest is moving to backwardation . So positive
I agree WellIntervention, Brent flying , Gas in the 300s , all broker analysts have much higher targets and with a bit of momentum we are close to the 5/20ma cross ie momentum and we certainly see a RSI bullish divergence on the daily. Some good signs emerging in my view
Strange 'Presently all O&G are shunned which explains their low ratios. There are many reasons NOT too hold O&G but the largest is political correctness'
Chap called Buffet , little known fella who lives in Omaha went out and bought 'just a few dollars' in an O&G firm in the US . . Occidental , may have heard of that one ....
Quite a few unknown chaps .. have done the same , Paul Singer ... some other amateur like Jim Simons had Exxon ... I mean who are these dudes after all.... hey . ahahah They are all buddies from down the pub those clowns. They should read this bb for real investment tips ! lol
Isn't it funny that this tax won't really raise a lot of money and at the current Brent prices it should be deemed as totally unfair if not outright illegal to essentially ban a business from paying off its debts and making some profit .
Where is the exceptional in mid 70s Brent ? Unless much like woman or man , now even exceptional has a different meaning . We are not at 125 Brent anymore . We only lasted about 1 month in March this year yet got slapped like we had 125 for 5 years in a row ! God I hate these politicians and all the thieving parties
Gas prices are super high again and somehow that doesn't seem to impact our price as much just the focus on oil which seems super strange as Gas is a multiple in equivalent terms ! I almost don't care for now what oil does. Why isn't this reflected ? We are nearly as high as a few months ago in gas terms .
And demand will pop next 10 days starting today on cold weather . Just hovering over zero in London now and it will go below even in central london tonight
Crude draw came yet products increased , but lets remember that any draws in inventory would be counter seasonal . We should be building.
A lot of Russian oil was flooding the market lately due to price cap deadline and now we'll soon see the consequences and if Russian oil production will fall . The second point which should not be overlooked is that China looks like going back to pre pandemic consumption as Covid restrictions are lifted .
Can China buy Russian oil and get European insurance ? Somehow I don't think so . It will need a Russian firm doing so
I think OPEC will observe and if oil price not go the way they want then cuts to production will be made.
As for the greed of the windfall tax gains ,I think that the original amount they wanted to collect is not going to happen lol . Plus they'll get slapped with decisions not to invest in the NS left right and centre.
Remember for Enq specifically the company remains profitable , this week or so should be seen in the context of a full year of high prices , yet I know the short view always prevails here. 40 great weeks vs 1 or 2 not so good yet the latter dominate the valuation . That is disappointing .
I know that chilting but that is more about the other asset classes . Why is Brent affected by a good job report ?
At any rate ENQ / UKOIL tells me that we have been in a downtrend of under performance towards Brent and that doesn't make sense . Especially given the strong debt reduction and profitability . We are 1 in PE ratio ? How does that even make sense ?
The Brent to Enq ratios are not making sense anymore .
Also all this oil demand destruction is just not there based on data but media and inventories are drawing . US accounts for the biggest oil consumer in the world Questforoil hence why the quote . Am fully aware of Arab Light crude cut to in price to Asian countries .
All the best chaps and happy trading ( well not too happy me though )
Am really puzzled . So am expecting another draw in the US tonight and tomorrow , we are coming from a quite a few inventory draws too. SPR is at its lowest I can recall too - no more injections . Russian were scrambling to sell as much oil as possible before the price cap so that too will come down now . Oil firms drastically cutting investments which were already drastically down . We are now told demand may fall but we saw employment in the US and for that matter the UK too at very strong levels , even if in the UK we probably are in a recession unemployment is low very low . Calling this a recession is not what I recall in the past. We also know that production forecasts for next year are for very low and lowering increase.
With China opening up , with India demand increasing . am not sure I get this price action .
Least of all why at $80 are we so bothered ? Our hedges are in part lower and we produce relatively cheaply , all the debt cancellation and new much lower bond issuance count for nothing ? Not so say the accounts but price penalises
That alone is a massive argument in favour of TA vs Fundamentals am afraid price trumps all , even when not making too much sense
Thought I'd share my preliminary view . Not seeing a build in inventories this week again .
Its interesting as now with price cap issue passed, EPL we've taken the hit, China Covid taken the hit , the apocalypse and whatever is thrown at Enquest. Its all priced in. So given that the deleveraging from debt will be the main focus for many investors and M&A activity away from the UK ,share price should slowly trickle upwards. After all the firm is profitable and building value each and every day at these levels which look sustainable for quite some time . If all the negatives are now in the only way is up now in my opinion
No investment advice its all opinion