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"LONDON, Nov 8 (Reuters) - Petroleum-related derivative markets were hit by the largest wave of hedge fund selling last week for almost three months as portfolio managers realised some profits after the recent rally in oil prices.
Hedge funds and other money managers sold the equivalent of 45 million barrels in the six most important petroleum-related futures and options contracts in the week to Nov. 2 (https://tmsnrt.rs/3BQfEnr)."

So more a reduction of existing long positions. As they say "take a profit and cry."

Wow - that really surprised me that production can go up and down and that declines are natural. Lucky for us that even if we hit the lower end of the forecast the rise in Brent has more than compensated. Dunno why he's going back over a Feb/Mar statement when we had this in May regarding Magnus and repeated since: "Average production for the first four months of 2021 was 14,250 Boepd, reflecting an unplanned third-party outage and power related failures in the first quarter, which have been rectified, and slower execution of the well intervention program. The Group remains focused on improving production through a well intervention programme, increased water injection and facility optimisation."

Luckily we'll be able to sell the oil (it hasn't gone away) at a higher price now.

BTW - it is the same Barack Obama who overturned the crude oil export ban and helped double US production. Nothing more appealing than a born again sinner. Some call it hypocrisy.

On twitter (some internetty thing)

"Today Pres. Obama is at #COP26, and apparently, he has a message for youth. But youth won't be in the room. There's no tix for most of us. Tix were limited to 2 per delegation or NGO, and the adults took them.
Theres no video link either.
Guess we'll watch it later on YouTube"

https://twitter.com/AlexandriaV2005/status/1457636447398207496

Totally random but the aircraft hangar called the "Pavilions" rented out space similar to a trade show. The biggest spenders on what I think is best described as 'Advertising space' was not necessarily who you'd expect. They were (in no particular order)
African development bank
US
UAE
UK
nature zone
Qatar
KSA
Brazil

"I’m a bit sad to admit China is facing this situation more intelligently than the US. That may be surprising, since we know China is by far the world’s worst carbon emitter. The regime knows this can’t continue, but also that it must continue until something else can be arranged.
So, for the moment, China remains reliant on coal, oil, and natural gas, importing vast quantities of all three. But the government is also planning a gradual transition to cleaner power, which will include not just solar and wind but a massive nuclear power program, amounting to $440 billion over the next 15 years.
According to Bloomberg, China presently has 51 nuclear plants in operation, with 46 more planned or under construction. The US has 93 operating plants, many of them decades old, and only two under construction."

It ain't gonna happen overnight or even in 15 years. China doing more than many in the COP26 talking shop.

Source: https://www.mauldineconomics.com/frontlinethoughts/energy-complexity

* Last week Bank of America raised its Brent crude oil forecast to $120 by mid-2022. That would be a price unseen since 2012.

We are seeing more hydrocarbons moving away from public entities to private entities.” This was from a panel discussion in Glasgow last week and a quote by Larry Fink (head of the world’s biggest fund manager, Blackrock).
Taken from an article in today’s ST by Dominic Lawson who was explaining why the above hasn’t resulted in rocketing stock market increases for producers in line with crude.
“The big Institutional investors, at the urging of their ESG committees, have been divesting from industries defined as polluting. And who have been the buyers? Hedge funds, mostly, such as that managed by Crispin Odey, whose European fund has risen by 100% so far this year. Last month Odey told the FT: ‘They [the big Institutional investors] are all so keen to get rid of oil assets, they’re leaving fantastic returns on the table.’ Another hedge fund manager, Josh Young of Bison Interests, observed: ‘People don’t understand how much money you can make in things that people hate.’”
DL also used tobacco as an example whereby investors were nannied away from the phenomenal returns that were available when divestment began in earnest in that industry.

And what else from Glasgow? A whingeing Biden threatening Russia and Saudi Arabia if they didn’t increase production and his secretary of state, Blinken, officially pleading with the UAE to “further increase production” of oil.

Dominic Lawson can say and write stuff like this. It would be suicidal for EnQuest (or Shell or BP) to do the same. Read again the Therapist post of Sat 19:01.

Losers financially are those trapped in funds that take moral decisions for investors. My funds chase returns - I leave it to politicians (sadly) who at least need a vote to make decisions for the nation. Many investors are unaware of the damage being done to their investments by ESG evangelists and the cowardly Institutions.

Here's a thought. Wind power is damaging the planet. I got to thinking about planting hedges in gardens as windbreaks and on hot days going to the beach for a bit of breeze. Could extracting kinetic energy out of wind be harmful if overdone?
Apparently it can. Scientists at MIT, Stanford and Harvard have started investigating:
"The core problem is that wind turbines generate electricity by extracting energy out of the air, slowing down wind and otherwise altering “the exchange of heat, moisture, and momentum between the surface and the atmosphere,” the study explains. That can produce some level of warming."
In fact that level of "warming" can exceed what they claim is done by CO2. In Texas they found that the ground behind windmills were hotter than befor the windmill was erected. God knows how much damage spin has done sailing across to France and rescuing refuggees at night (with Juan on tiller).
I'm no scientist but there is always a reaction to any activity be it social, chemical or physical.

I think we won at COP26. The screaming and chest-beating is overdone and as for the youth of today voting then you haven't been paying attention. I still meet younger people and TBH have never had a conversation with them about global-warming. The ones I know don't even talk about it to each other but loosely agree with it because it is rebellious and winds up older people. Exactly what I did when I was younger. Now I know better and am a tolerant pussy cat.
This climate thing is more devisive than the Reformation and that was about belief too. Next thing Greta will produce is a Climate Bible.

The newbie Waldorf has completed their £334 mio deal with Cairn. There are some numbers nin there that might help with valuing Kraken and other reserves.

"Edinburgh-headquartered Cairn holds a 20% interest in Catcher and 29.5% in Kraken, operated by Harbour Energy and EnQuest respectively.

The deal with Waldorf includes contingencies payable to Cairn for the Kraken and Catcher stakes between 2021 – 2025, expected to be worth $100m if Brent crude oil is at $60 per barrel, $175m at $70 per barrel and $240m should prices remain at the current $80 mark."

Breaking news from Scotland regarding Covid - they've taken drastic remedial action by opening windows in schools.

https://twitter.com/BarryBlackNE/status/1456243323719589893

*significant rise in cases of frostbite in under sixteens..

Sorry to hear that but you're improving. I'm planning a ski trip in January but I had the Novavax trial drug in Oct/Nov 2020. I got the vaccine, not the placebo but it isn't accepted everywhere so had the first Pfizer mid October. I'll be passported in time but it's all a pain. I bet you're glad you were vaccinated.

All the signs to me are a shortage of oil and the politician's actions reinforce that for me. They think we can't read a bluff or hot air? I'm not against transition or renewables but they just ain't effective imo.
I don't know if you've seen this. https://www.youtube.com/watch?v=Jz75yScqPpQ very persuasive but I feel as though I'm being sucked into a QAnon cult.

I've ordered a second wheelbarrow.

See. The Swede isn't entertaining $70. I knew it. That's why I prefer his figures.

E - I actually have some unseen footage of that meeting https://www.youtube.com/watch?v=J_2BUB_1wBg

I don't think it is as simple as that E. I remember that Mexico was almost unique in that it sold its oil at an annual auction over a short space of time with a few chosen counterparties and not throughout the year. I don't think it matters too much if it was options or swaps. It was very secretive and remunerative because the amounts were so large. Nothing leaks out because those directly involved make the Trappists look like chatterboxes. That wasn't the point of the post anyway. I wanted to signal that using $80 whilst warming is not actually achievable if things stay the way they are. That's all.

I'm with those that think $80+ will be achieved but nothing is guaranteed. Just trying to keep Pelle on the straight and narrow!

*have a look at this https://www.reuters.com/article/mexico-oil-hedging-idUSN0813903220091208
How many other countries announced their hedges in this way? It was a useful indicator but I'm not a close follower of Mexico and I believe their production has been sliding for some time.

I get some interesting ideas from the Placera site and at 8.24 Mexico got a mention. They use a secret auction system to
forward sell oil and guesswork in the article says they got $60-65 for 2022. See here https://mansfield.energy/market-news/the-mexico-hedge-is-back-mexico-locks-in-2022-prices/
At present it looks like they sold too early but it is interesting to think about what we may get for 2022. Mexico would have had the best advisors but whatever way you cut it the future remains unknown. What we do know is that backwardation exists and we won't be getting $80 using today's prices. So what do we use? I'm thinking $70 as a base with a few other calculations on a sliding scale. It is of course possible that the price drops. I'm hoping for $80 but will settle for $70. Anything above is a bonus but remember the old adage. Q what is the cure for high oil prices? A. high oil prices.
A cold winter and a short burst of around $100 will be enough to set us up for a very good year. The omens are promising.

Actually Mriggy I'm waiting for your side to do the simple calculations for 2022 once we get the update in a few weeks. I like Pelle's directness and prefer an upbeat assessment. I leave the detail to others because it is (as you say) the macro that wins in the end.
I'm thinking we might smash Eric Nuttall's tweet of today:
"With the average CDN energy company I follow trading at 2.5x enterprise value to cashflow, a 33% free cashflow yield to equity value, and able to privatize and be debt free with 3.3 years of free cash flow at the current oil price...every day above $80WTI is a PHENOMENAL day!"

Having resolved issues with partner Neptune Energy, Spirit Energy has handed in an environmental impact assessment (EIA) for proposed new drilling at the Pegasus West discovery.

Appears this Government wants inflation. Certainly getting it in energy.

Mriggy - if the position is "dire" we would expect a RNS. AB and his team can handle the North Sea. World politics and social movements are beyond them.
Your English is excellent but we are not in a "dire" position. I wouldn't be surprised to see the US release some oil from the SPR.
Been out. Diesel now £1.47 a litre. I fancy a break through £1.50 will get headlines. Our hedge (EnQuest) against energy bills will hopefully pay off.

Be Lucky

Spot on Juan. You've been taking them clever pills again. They stimulate the common sense glands.
As for the US they think we're all card carrying socialists over here who would probably nationalise any energy investment they had over here.
Don't ever underestimate Americans. Several hundred QAnon supporters gathered to see JFK's return to Dallas yesterday.

Hi E - I should have been clearer. I sense an air of desperation about Biden. Not so much Republicans are strong more that Democrats are poorly led and accident prone. I wouldn't be surprised if efforts to lower oil before the infrastucture bills go through hasn't been arranged with oil producing countries. Oil is going UP. Only another Covid shutdown can stop that. We've had a good COP26 as a company so far.
I think shale will come back but that is as much the US pulling up the drawbridge energywise. The US oil companies are unapologetic and make ours look like pussies. They are contemptuous of climate activists and have the confidence (and the acreage) to indulge in their greed. This video is so telling:
https://www.youtube.com/watch?v=0-VgyBP1EGg
"too much is never enough" for them. Basically the US, Russia, China et al really don't give a toss imo. If they hold their nerve they may have a Republican administration to cosset them in a few years. I imagine that they won't be so obvious as in the past so some restraint will be used.
I can't get excited about our Government and its tokenism. Tories don't commit economic suicide and emissions are coming down. Where I do disagree with you is over AB's stewardship. It isn't him alone and I think our IR have kept their powder dry. Our recent moves have been well thought out and it is a board's decision. Selling ourselves to retail would be getting on a treadmill with no benefit other than to satisfy day traders who haunt these boards. Yes, he needs to reward us soon but it is on its way. There is a relentless progress in our revenue and debt reduction. The tide has been against us for years but it is turning back towards value shares and commodities. I'm pretty confident that our tyres have been kicked and tenuous approaches made but we are on the verge of a huge turnaround and it will happen quickly. This is the real test. Keeping the barbarians from the door. We've waited this long I don't want to see it stolen from us on the cheap.

*I'm not really against climate activists but I remember the recent record temperature in Barnet of 35 degrees last June. The hottest day ever. They blamed it on climate change. The previous record was in 1976 and they blamed it on summer.