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https://www.reuters.com/business/energy/opec-upbeat-2022-oil-demand-says-omicron-impact-be-mild-2021-12-13/

Not perfect but I find that once the news is full of a particular topic the crowd has moved on. The news sources that Reuters use do independent analysis. The hedge against Omicron had to be made. It may now be unwound.

The Omicron safety car has done its job and there have been no mass fatalities so the jockeying for position continues behind it. Providing it moves over there could be a last minute Christmas dash and make it an exciting climax to 2021. The enforced reduction in speed means that all competitors still have a lot of rubber on their tyres.

Build it and they will come.

We haven't seen many but today the HYN was green. They are generally much more risk averse than the stock but didn't follow the recent market movement of Harbour. In fact they're higher now than on the 23 November when they headed lower for a couple of weeks.

All about Omicron for the next few days. The bond market analysis is a bit more measured than the equity but then it isn't so easy to day trade these bonds and algos need the volatility and volume to an extent.

"provided the upsurge in coronavirus cases does not push the global economy back into recession."

Economist John Maynard Keynes famously said, “The stock market can remain irrational longer than you can remain solvent." Some truth in that but we are now at the ridiculous situation where making money in producing oil is seen as a stock market negative. A recession could put the mockers on it to an extent but we will begin to start getting the data about Omicron over the next weeks. Early signs and data from South Africa suggest it is the mildest variant so far.

Get ready fore a handbrake turn!

COLUMN-Low hedge fund oil positions create re-entry point: Kemp - Reuters News
13-Dec-2021 13:20:44
Chartbook: https://tmsnrt.rs/33g0NqQ

LONDON, Dec 13 (Reuters) - Hedge fund selling of oil futures and options slowed in the most recent week, after a tidal wave of selling the week before, probably indicating the liquidation cycle is near its end.
Hedge funds and other money managers sold the equivalent of 19 million barrels in the six most important futures and options contracts in the week to Dec. 7, down from 131 million in the week to Nov. 30.
Sales over the last nine weeks have now totalled 313 million barrels, according to position records published by ICE Futures Europe and the U.S. Commodity Futures Trading Commission.
The most recent week saw further sales of Brent (-13 million barrels), NYMEX and ICE WTI (-3 million), European gas oil (-2 million) and U.S. gasoline (-2 million) but small purchases of U.S. diesel (+1 million).
Portfolio managers last week cut their combined position across the six contracts to just 558 million barrels (in the 40th percentile for all weeks since 2013) down from 871 million (79th percentile) on Oct. 5.
But the reduced rate of selling suggests the most severe phase of liquidation associated with the new Omicron variant of coronavirus has now passed its peak (https://tmsnrt.rs/33g0NqQ).
On the crude side, hedge funds' Brent positions have been more than halved to just 154 million barrels (20th percentile) down from 333 million barrels (69th percentile) nine weeks ago.
The ratio of bullish long positions to bearish short ones in the crude benchmark has fallen to just 2.7:1 (23rd percentile), while inflation-adjusted prices are now in line with the long-term average.
The combination of well-below average positioning and near to average real prices is likely to make this a relatively attractive entry point for hedge fund managers – provided the upsurge in coronavirus cases does not push the global economy back into recession.

From a slightly different perspective. The challenge they [renewables] face.
"Offshore wind is 2.6x more expensive as onshore wind power & 3.4x more than natural gas."
--IER
We do tend to look at energy down a Western telescope and there is an element of crusade and righteous indignation from the powerful green lobby.
"Most writing about energy is still rooted in the world of 1945 at the end of the Second World War, or 1989 at the end of the Cold War, when the world economy was dominated by North America and Western Europe.
Since then, however, the centre of economic activity, energy consumption, and greenhouse emissions has shifted away from the economies clustered around the North Atlantic towards Asia.
Countries in West, South, and East Asia accounted for 49% of global energy consumption in 2019, up from 43% in 2009, 31% in 1999 and 23% in 1989, according to data from BP.
Technologies that work on the large scale energy systems of the North Atlantic countries will have to be scaled up to work in the very much larger energy systems of Asia.
Technologies that work in regions abundant in oil and gas will have to be made to work in regions where they are scarce and coal is the main indigenous energy source and a foundation of energy security."
"Technologies that work in the context of relatively prosperous economies around the North Atlantic will have to be made affordable for more modestly prosperous economies in Asia."
From an article 10 Dec by Reuters John Kemp.

The UK is acting like our oil reserves are almost ready to be dispensed with and cast off like kiddies bicycle stabilisers. The green lobby seems to think that you'll always be able to switch on electricity (energy) and somehow, magically, at an affordable price.

Nice little chart that goes a little way to explain the rush to leave the North Sea. https://fingfx.thomsonreuters.com/gfx/ce/akpezonnwvr/CHART%201.png

I don't have the answer but it is a niggle at the back of my mind that Neptune and HBR (both the creation of private equity) saw this as a money making exercise with the end sight of exiting and taking the money. Both set up around 2014/15. They saw the cheapness of assets and the potential profits. Neither could have foreseen Covid and possibly the growth of the ESG and climate activist power.
The Tolmount reason may be true but seems a little too pat to me. All oil companies have ups and downs whilst hedging ia a bit of an art with impossible to get right timing.
I can't see the logic of them merging and just replacing a major. Of course they wouldn't have any midstream/downstream activity but it seems a little strange to expect the funds to come back and invest in replacement majors. If the private equity doesn't want to own them in the longer term then who does? Until it is clear what EIG will do in April it may impede a decent rise in HBR.
I think one of the problems is who would be acceptable (and willing) stewards of the transitioning away from fossil fuels in the North Sea? That I think is the real elephant in the room and overhangs the market. I think it is fairly clear that whoever owns them will make money but is it worth the distraction and attacks from angry and noisy activists and weak government intervention despite it being clear that we are still many years away from renewables replacing fossil.
This country still aspires to be a leading member of the OECD and Nato but doesn't seem too concerned about security of energy.

I don't think rebuffing Russian incursions with catapulted gliders quite cuts it.

You raise an interesting point Modestus (15.44). I listened to the whole webcast of the CMD of HBR. They have a liquidity problem and 37% of shares are in lock-up until April 1 next year. I am considering buying some because it is being strategically run and has a scale we don't. The dividend is useful too. I use them as a kinda bellwether for EnQuest and the main thing I came away from listening is that there is a clear distinction with organic growth and buying assets which applies to us too but there is another major difference. They have in a few years grown considerably and also got involved in M&A. As stated at the CMD they will be looking at others but are in no hurry. I think it will be hard for us to stay away from M&A, especially with our tax dowry.
My feeling is that the algos currently have us by the nuts and that applies to the whole sector. Who is to say that the algos are right? If everybody uses the same blackbox then they are self-proving and that works fine until it doesn't.

Had a look at stock on loan for November:
ENQ 3.6
HBR 2.87
TLW 5.86

I wonder how much of this is caused by/relates to the bear market in the sector and the inventory required by MMs?

Bon weekend.

NO FEAR, the MMs will have a small float that they use. They are not always the instigators of the big buys & sells. They are acting as agents in most cases. In some respects you are blaming the messenger. It is like being unhappy with the resale value or reliability of a car you bought. Is it the showroom salesman's faullt or the car manufacturer?
There is always the possibility of abuse but by and large the London market has integrity (I don't include AIM) but if you think that you have the same information and advice that the professionals have then you are sadly mistaken. Can you imagine the potential leaks around a project like Tolmount? Subcontractors, geologists and debt holders do talk to each other and are unlikely to read or post on this message board. You complain about the negative news regarding Tolmount. What do you want - for them to lie and say everything is tickety-boo?
The whole North Sea has struggled these past years and blaming MM's is like a drowning sailor cursing the sea. The world isn't perfect.

https://archive.vn/7iAF2

Couple of good years with debt closer to zero and this could be us. Shows the attititude of private equity. They want money out. I agree with them. Talks earlier in the year of Neptune merging with Harbour.

Build it and they will come.

Maybe that is why we are doing better today. I would be happier if someone could explain what is so wrong with HBR.
JPMorgan Chase & Co is the largest bank in the world by market capitalization and is the LARGEST lender to the fossil fuel industry in the world so I guess we can assume their coverage of little EnQuest is significant.

I'm not invested but balls deep in EnQuest so feel your pain. I am sh*ttng myself because I can't really see what is wrong with HBR other than the fact that EIG wants out at some stage and whatever the problem is it may be more contagious than Omicron and spread to EnQuest. Longer term this is a solid stock and holders will do well imo.
I was a MM (broker) in FX which isn't quite the same as we weren't allowed to hold positions (but we did) and there was a creation called "points banks" who for a fee would lend us their name. If you got it drastically wrong the ultimate sanction was that you "wrote a cheque". The Bank of England in the 90's made it reportable to the bank's management if the private "points bank" arrangements were used. It more or less drove the practise underground but didn't kill it. There are plenty of long standing relationships in thne City that can be nurtured.
I saw the big UT trade and just assumed it was a neutral arrangement for trades that day between a willing buyer and seller to let it fix at the auction price. Nothing worse than a blind order during the day and an unscrupulous broker using tops and bottoms with a friendly "points bank" in the middle. The volume was pretty disappointing as well. I think everything lately is getting exaggerated and prices aren't for those of a nervous disposition. I'm mystified and will listen over the weekend to the webcast. HBR is a bellwether for me regarding EnQuest and I want both to do well. I think HBR is cheap and a raging BUY but I just don't know enough about it.

From an address by Simon Roddy of Shell, senior VP for upstream UK, at the OGUK awards ceremony and talking about the Cambo decision.
"“Do we want remaining oil and gas demand supplied from our own natural resources in the North Sea, or do we want it imported? It really is as simple as that,” he said.

“And imported oil and gas tends to have higher overall emissions, both production and transportation, and be under less regulatory control, does not support Scottish and UK jobs, does not support the Scottish and UK economy, and indeed reduces the security of our national energy supply. This is the real choice that we face. And I suspect that most in this room see it similarly, but we welcome a much wider conversation.

“The development of our natural resources is implicit in the NSTD but it needs to become much more explicit. Much more explicit if we are to ensure a predictable context which is a pre-requisite to long-term investment.

“And that brings me to the elephant in the room: Cambo. Cambo was a decision that was specific and project-related but it was not taken in a vacuum. And a predictable and supportive environment is the key to the future of the North Sea.”

The NSTD commits the industry to aggressive emissions reduction targets of 10% by 2025, 25% by 2027 and 50% by 2030.

Fair enough Juan but your moniker is awfully close to Janus - just saying. I agree it is rather boring when somebody goes on about their successful life and adoring family as it makes you so jealous. I've friends of over 50 years and we still argue every time we meet. I never had a great job but it paid well - I'd have much rather had a 4 day week or work from home some days like many do nowadays. I haven't booked my skiing holiday because of the uncertainty and my investments are lagging. Mind you, my bowels work fine and I can afford to go out. All OK with you?

p.s. I'm having boiled egg and toast for breakfast.

i'm not in HBR but only because I'm in EnQuest. I don't think they deserve to be where they are. Neither stock should be this low imo.

Morning E - I can't understand waht's happening at Harbour. The sector is still pretty friendless. Seems like it's hold for the long run. The analysts like it but the market runs in a herd.

..... and it was the aptly named "Troll" field Modestus. Equinor were asking for trouble when they named it.

"Basically I think it’s not really worth comparing." - Maybe but we need to try. Just as important is that it is private equity picking up these assets. They are not so PC or scared of the activists as the traditional investors. I imagine that some of those forced out by political pressures might come back in but through convoluted back door investment.

Thanks mrc but please talk among yourselves. In the annual report it said annual production 44.9 mmboe which is 123k boepd and the bulk seems to be Norway. So must have been some collapse in 2021. Making a little more sense now, thanks.

Last attempt from the shallow end of the Accountancy pool. The only thing (for me) that would get the numbers that L7 mentioned to the production in 2020 would be that the production in 2021 at Spirit nose-dived off a cliff. I'll wait until there is a consensus or somebody points out my major error.
Wish I hadn't started the initial post.