Member Info for uncertain

The markets continue to be unimpressed by the OPEC agreement, and the price of oil is beginning to look a bit wobbly. Another MJF well may shore CASP up, but probably won't bring a large rise in these circumstances

and doesn't seem to impressed with the OPEC agreement

https://www.bbc.co.uk/news/business-52249103

The ooil price is down below $32 this morning so the market is evidently not impressed by the OPEC measures, or perhaps they are pessimistic about the prospects for co-operation from oil producing members of the G20 who meet by video today.

The Saudis and Russians are supposed to be having a video confrence today (postponed from Monday)
Diversification from the oil economy is nothing new for the Saudis and taking advantage of low share prices makes sense

The share trades page is still stuck in February!

Nice gentle recovery this morning, but we are still dependent on the extent of Putin's pig-headedness

Thanks Swerves, that RNS didn't appear on LSE for some reason, but have now checked it on the CASP site. Slightly more optimistic as a result

https://www.cnbc.com/2020/04/06/russia-saudi-arabia-are-very-close-to-an-oil-production-deal-rdif.html

Good news about 153 this morning. The suspension of further drilling and work on deep wells as reported by share_talk via oilman Jim is correct, but this is dependent on the oil price which has been rising. They don't say at what price they will recommence work, but the recent devaluation of the Tenge will help. Deferral of management salaries during the crisis shows this has been hurting but they report that they are continuing to sell their oil.

An initial drop in the oil price overnight in response to the news that the Saudi Russia talks have been postponed have been followed by a small rally. The OPEC response and the Saudi Russia talks are crucial to resumption of drilling activity which will in turn impact on the share price

Comparing the economic consequences of the covid19 to previous economic downturns is a bit difficult as the causes of the downturn are so different from previous financially driven events. There will be substantial changes in the levels of indebtedness of both governments, companies and those individuals without support from employment or the state. On the other hand people with incomes (the retired, key workers, businesses supplying the needs generated by the pandemic) will probably generate strong savings (I'm not really spending much at all in my old person's isolation). The return of QE will nevertheless be needed and now that the Money Tree has been found in the Treasury basement, will be combined with a Keynesian deficit stimulus, avoiding austerity this time around. Certain industries will be encouraged to expand to avoid overdependence on overseas suppliers. What will unemployment be like in these circumstances? Economic forecasters would have to be very brave to hazard a guess.

As for the price of oil, this is even more difficult to guess. There is a view that about 75% of oil production needs at least $35 to breakeven just on capital costs, and shale producers in the US are hurting badly at present. The leaders involved in any agreement to cut production are all volatile and unpredictable, but ultimately I think output will be cut. Trump may be hoping that this will happen rather than having any concrete information. Demand is down about 25% on a year ago, but this may fall further as the virus spreads more widely around the world.

We may have some new wells soon, but on the other hand we don't know about current CASP oil sales and their cashflow position. 10p by the end of April seems very optimistic to me. It would be entirely justifiable in the medium term. My guess would be September with another drop in price when the second wave of Corvid hits in November.

is uncertainty which the corona virus has provided plentifully. UK based businesses in general would like to know what financial measures are going to be put in place to deal with the cash flow problems that the mitigation/suppression phase of policy will bring, particularly in the tourism transport and entertainment sectors. I believe there is a policy announcement on this today, so it will be a matter of how credible these policies are.

CASP is a goodoil share in comparison with others, but with oil sharply down again this morning, I think we may have to wait a little while yet before the sp goes north. Patience is needed

....have just declared a virus state of emergency and are largely not letting people into the country. They have relatively few cases and there is currently no risk to production

I've been worrying about the role he's been playing for the last three years

Can I just check that Adrianz? Your worried about Trump dying? He wouldn't be at the top of my list to survive!

The seller must be selling for cashflow reasons because no-one sensible would offload at these price levels.

Just spotted that the fall is in line (slightly less than) the drop in the FTSE 100 and 250. General panic instead of specific panic.

Of course the alternative explanation is that there is a seller out there still and the MMs ave dropped the price to pull in some more buyers. Since my last post there has been one trade but the MMs are being coy about whther it is a buyer or a sell. It is a round number so my guess is a sell.

The sp has dropped 3.7% this morning on the basis of absolutely no trades. Presumably the MMs have marked it down on the basis of a similar drop in the price of oil this morning. Clive suggested in the RNS that the price of oil has limited effect on the cash flow of CASP because of the Kaz tax regime. Most people here are invested here on the basis of future output (MJF or the deeps) when the oil price will almost certainly be higher than it is now. We are advised by the company that their investment programme is currently going ahead as planned. Looking beyond the pandemic crisis (which the experts agree will be time limited) and the Russian Saudi fallout (which is neither of their medium term interests) the value of CASP (as opposed to many oil companies) which has no debt, should not respond in this knee jerk way to the POO. Are you listening MMs, or do you already know all this stuff and are just looking to the opportunity to make some money from people who are panicking unnecessaril? .