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BL

Oil up on the hopes to an end to price war. A price war that never existed and never would.

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(edited)

India just declared Force Majeure with Saudi Arabia oil.  Don't need anymore oil.  Don't want anymore.

Saudi exports to U.S. last week dropped in half. 

Supposedly China going to go on buying spree to fill up their storage.  Already been buying more for storage. Mostly from Russia (pipeline advantage) than China but that could change.  

Saudis all bluster and talk.  

Brilliant, a price war, yet another idiotic  move by MBS.  The toothless tiger.  

A Russian/ Saudi agreement is not going to end the Covid19 pandemic any sooner.  It's not going to encourage more people to drive their cars or go on a cruise.  It's not going to free up more storage capacity.  

Even with the crisis oil can't continue to sell oil at $20 bbl.  Even for Saudi Arabia. 

Rather than increasing production Saudis need to drastically cut production like the rest of the world is being forced to do.  Have to, no storage capacity soon.  They really should cut exports if they want to increase price.

Why should Saudi Arabia get to export 8 million bbls/day.  Cutting production is a joke. Nobody complies. Need to cut exports.  

I see three different Saudi oil prices of a bbl oil.

1.  The all-in cost of production/operations for break even price = $2.80

2. The price to cover their fiscal/budget requirements $84.00

3. Their SURVIVAL price. The price they need  so there are no riots in the streets, a coup or MBS loses his head over oil.. That  price = somewhere between the $2.80 break even price  and the $84.00 fiscal budget prce.   It's anybody's guess. 

Remember the Aramco IPO shares come off lock up in June.  The people of the kingdom were all told what at great deal the purchase of shares were.  Hundreds of thousands bought shares so MBS could save face.

Al Jazeera did an interview with a common Saudi family.  With the stock down the father said it was a disaster.  He said he put all his families savings into the stock.  His final words, " I guess I will have to wait till the share price gets back to the offering price so I can sell ".  ? 

One has to feel for this person and his family. In my opinion Saudi Arabia is a bit like China in the sense that the people are good hearted honest people .   .   .   it's the leadership you have to worry about.  

It will be interesting to see how MBS handles the Aramco share price in June after lock up ends.

Edited by BLA
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You will win betting against MBS internationally. If ARAMCO had a real IPO I would have bet everything I had shorting the stock.

But betting against doing so domestically, that timing is bit tougher. People have been waiting for the other shoe to drop since he first took charge.

Iran must be laughing. They already aren't selling diddly. Only COVID 19 is probably going to disseminate them. As it hits places without a deep modern infrastructure is going to be ugly unless effective vaccine comes on line.

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(edited)

I bought a few  oil stocks on the cheap  a week ago and didnt know if I should sell or hold today. The normal red Friday's have been green recently and news from russia saudi and trump make big swings. Demand wont change with a tweet or a "well bring down production (that's already falling) by months end". Easier to just be long and not swing trade i guess.

Edited by Rob Kramer

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Please, for the quality of this forum, I invite those who do not know much about Saudi Arabia (history, institutions, political power, social organization, etc.) to stop drowning us with these old clichés and grotesque predictions, fruit of various propaganda by rivals of the KSA. I do not understand why members who know the Kingdom very well remain silent before this deluge of laughable assertions. You can dislike / disapprove of MBS or its choices without telling things so far from reality. You can at least consult the existing literature relating to this country.

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