Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
I agree but I think Brent oil price may still spike. Russia could retaliate with cut off oil supplies. They have form with last sanctions from so called unfriendly countries. We all know a recession is coming or is here already. However, the physical demand for oil & gas is still outpacing supply. OPEC & IEA forecasting 1 millions barrels demand per day over supply for next year. So it’s a balance with demand destruction from recession economies. Also notice recently Brent going nearly 7% down but Shell shares down only 2%. Is Shell, BP’s share price taking a cue from the Footsie Index? If Brent is being more discounted influence, makes me wonder these Brent falls temporary on today’s same news factors as last week.
The second, and much bigger obstacle, is the assumption that Russia will take it all lying down. It is a dangerous assumption, as already noted by analysts, and a costly one, as reported by JP Morgan, which has estimated that if Russia decides to cut exports in response to the cap, oil could soar to $380 per barrel
That’s right. Co-ordinating this oil price cap is going to be so difficult. Then you got countries, companies doing sanction busting & the Bi-Lateral deals with Russia on oil & gas. Also some countries like Japan not going to participate as special exemptions or they paid off for any losses. This already makes it a rather less effective tool. So Biden is pushing for this, moreso I think as his approval ratings have sunk in the US. It’s always politics at play. Today Brent is down 4% but this could easily swing the other way when the price cap details are out. Whether the markets see this as a fudge that’s not going to work out well, only time will tell.
Oil Price Cap in Focus. Senior US Official saying without oil price cap oil then could see $140 per barrel. Then Russia saying if get price cap oil will rise much more. Oil rationing pushing up prices. So upwards oil price pressure in a dire supply situation.
Trading updates take may take a couple days for investors to respond. All I was saying is that the Shell trading update was not so clear. There were big positives, negatives like production levels down due to maintenance issues. However Shell has huge cash generation & there were promises of Dividend hikes & more share buybacks.
Today after the Shell update:
Goldman Sachs raises Shell price target to 42 (39) EUR - ”Buy”
The oil industry in the U.K. are saying that tax concessions won when Rishi Sunak was Chancelor. They want more tax concessions & next Monday a bill was going through The Commons. If so this may be positive for Shell.
Jim800: I trade shares. Try to get in on aweful days. So I tell it how it is. I do not reveal everything I do as that’s for me to know. I missed today’s up share action. If Shell’s results were so well received, then why is BP up 5.5% & Shell up only 3%. The impairment issue is a plus but the whole FTSE100 is up on Boris resigning & Brent going up a bit. I’m not sure it is down to Shell’s trading update today.
Everyone has to do what is right for them. There is a balance where oil demand, supply sits at a certain oil price. This price no one can say for sure. Until then oil company shares will drift downwards or take a knocking downwards. GLA whatever you do.
WTi oil at $98, Brent likely below $100. Whip saws likely to continue with lots of volatility. Brent over 10% down today, big move will take time to tame, then likely several other legs down. Some up share action amongst this but like catching a falling knife. Ever so difficult to time things, key events may quicken things ups & downs.
The Atlanta Fed’s GDPNow gauge sees the second-quarter running at negative 1%.
Coupled with the first-quarter’s decline of 1.6%, that would fit the technical definition of recession.
Saxo Banks take:
“We still believe – and fear – that worries about demand destruction will be more than offset by supply constraints,” Hansen added.
“Crude oil remains rangebound on a continued battle between macroeconomic focused traders, selling “paper” oil through futures as a hedge against recession, and the physical market where price supportive tightness remains,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said in an analysis on Thursday.