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Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in

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Has Oil Lost Its Upside Momentum?

By Alex Kimani - Apr 27, 2022, 6:00 PM CDT

  • Weaker demand fundamentals have dampened upside momentum for crude oil.
  • Declining volatility and narrower intra-day trading ranges point at slowing bullish momentum for crude.
  • Standard Chartered: lockdowns in China will dent oil demand in April and May, but may not last much longer.

Anyone banking on more upside momentum for oil prices may be disappointed going forward, with a holding pattern now being determined by rising concerns over demand coupled with releases from strategic petroleum reserves. 

Oil prices have fallen particularly sharply over the past week as traders worry that China’s oil demand will take a big hit from reinstated lockdowns.

Brent blend for June delivery fell USD 10.84/bbl w/w to settle at USD 102.32/bbl, while WTI for June delivery fell USD 9.07/bbl to USD 98.54/bbl. Values were more robust along the curve, with Brent for delivery five years out falling just USD 1.44/bbl w/w to USD 72.70/bbl. 

The fall in prices gained pace on 25 April after testing of Beijing residents began following COVID cases being reported in the Chaoyang district of the city.

While volatility in the energy markets remains high, there are signs that it’s declining, with intra-day trading ranges also trending lower. Front-month Brent appears to be in the latter stages of its third wave since Russia’s invasion of Ukraine. The amplitude of the waves from low to high is declining; the first wave spanned USD 43 per barrel; the second USD 23/bbl, and the third USD 14/bbl. The dampening of the cycles is mirrored in smaller intra-day trading ranges; there were 14 days in March with an intra-day trading range of more than USD 8/bbl, but there has been just one so far in April.

And now, commodity analysts at Standard Chartered are warning that fundamental risks are skewed toward a market surplus, adding that traders should be cautious about short-term price rallies and should instead maintain long exposure in the middle and back of the price curve.

Demand Hit

According to StanChart, lockdowns are likely to dent China’s oil demand by 1.1mb/d in April. However, the decline is expected to only last a few months, with China’s demand growth expected to come in lower by only 78 thousand barrels (kb/d) by July.

However, the experts have cautioned that any extension of area-wide lockdowns would likely extend negative demand effects into Q3, increase the Q2 demand loss and take the annual demand growth forecast into negative territory.  Related: Bearish Momentum Grows, But Traders Remain Bullish On Crude

The global oil markets are currently dislocated, with crude flows having to be redirected and with shortages of specific oil products in specific locations--most particularly diesel in NW Europe. That said, StanChart says the market is not in an overall deficit and could even record a small surplus in April. The balance, however, looks tighter in Q3 and beyond, with the fall in China’s demand expected to be transitory while the decline in Russian oil output persists. The bank’s projected Q3 deficit of 0.9 million barrels per day (mb/d) is small enough to be filled by further increases in OPEC output and by a continued deceleration in oil demand growth as global economic growth weakens.

The latest EIA weekly data was highly bullish according to our US oil data bull-bear index, which rose 49.8 w/w to +63.4 (see China crude imports to remain low as demand falls). Crude oil inventories fell 8.02 million barrels to 413.73 million barrels, leaving them 79.28 million barrels lower y/y and 71.61 million barrels below the five-year average. The w/w fall in crude oil inventories was 10.4 million barrels relative to the five-year average and 10.2 million barrels relative to the pre-pandemic 2015-19 average. The w/w change in the crude oil balance was dominated by a 2.09mb/d increase in crude oil exports to 4.27mb/d, just 192kb/d less than the all-time high. The overall w/w change in the balance was 2.486mb/d in the direction of lower inventories. The EIA estimate of crude oil output rose 0.1mb/d to a 23-month high of 11.9mb/d.

The U.S. oil rig count rose by a single rig w/w to a two-year high of 549 according to the latest Baker-Hughes survey, and the gas rig count also gained a single rig to a 30-month high of 144. The largest rise in oil activity was recorded in the Bakken region of North Dakota and Montana, where the rig count gained two to 35. Activity in the Permian was unchanged at 332 rigs; among the Permian sub-basins, Delaware Basin activity rose by one to 172 rigs, Midland Basin activity fell by one to 130 rigs, and other Permian activity was unchanged at 30 rigs.

The latest EIA Drilling Productivity Report estimates that 433 wells were completed in the Permian Basin in March, a two-year high and still comfortably ahead of the 363 new wells drilled. The number of drilled-but-uncompleted wells (DUCs) in the Permian fell by 71 m/m (5.1%) to a five-year low of 1,309 in March, while DUCs in other regions fell by 43 (1.4%) to 2,964. The report made some significant downward revisions to Permian oil liquids output, with the March total revised 163kb/d lower to 4.975mb/d. The EIA expects Permian output to rise 82kb/d m/m in May to 5.137mb/d, with the total across the regions covered expected to rise 133kb/d to 8.649mb/d.

Overall, the bulls still have the upper hand.

The distribution of the bull-bear index has been skewed to the bullish over the past year: there have been 31 bullish, 12 bearish, and nine neutral readings. The skew is particularly pronounced in the tails, i.e., the ultra-bullish or bearish (weakest and strongest 5%), and the highly bullish or bearish readings (the next 10% in each tail). There has not been an ultra-bearish reading in the past year (the last one was 91 weeks ago), whereas there have been four ultra-bullish readings. There has only been one highly bearish data release over the past year, while the latest week’s reading is the 10th highly bullish release over the same period.

By Alex Kimani for

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Exxon And Chevron Post Blockbuster Earnings As Oil Prices Soar

By Tsvetana Paraskova - Apr 29, 2022, 10:00 AM CDT

  • ExxonMobil and Chevron both miss consensus estimates.
  • Exxon doubled earnings to $5.5 billion for Q1.
  • Exxon is now tripling its share repurchase program up to a total of $30 billion through 2023.
  • Chevron reported adjusted earnings of $6.5 billion for Q1

U.S. supermajors ExxonMobil and Chevron reported on Friday strong earnings for the first quarter as oil and gas prices surged after Russia invaded Ukraine.

ExxonMobil (NYSE: XOM) doubled its earnings to $5.5 billion for Q1 compared to the same period of last year, despite a $3.4 billion after-tax charge related to its decision to exit the Russia Sakhalin-1 project.

Still, Exxon’s earnings per share, excluding identified items of $2.07, missed the consensus estimate in The Wall Street Journal of $2.23.

Earnings excluding identified items stood at $8.8 billion, an increase of more than $6 billion versus the first quarter of 2021, the supermajor said. Free cash flow jumped to $10.843 billion from $6.909 billion for the first quarter last year.

Production in the Permian came in at 560,000 barrels per day (bpd) at the end of the quarter, and the company remains on track to deliver a production increase of 25% this year versus full-year 2021, and to eliminate routine flaring by year-end, Exxon said.

After doubling earnings, Exxon is now tripling its share repurchase program up to a total of $30 billion through 2023.

Chevron (NYSE: CVX), for its part, reported adjusted earnings of $6.5 billion, or $3.36 per diluted share, for first quarter of 2022. That’s more than triple the adjusted earnings of $1.7 billion for the first quarter of 2021, and the highest quarterly earnings for Chevron since 2012.

Chevron’s adjusted per share earnings also missed the $3.41 analyst expectations in the Journal.

Yet, free cash flow surged to $6.1 billion, from $2.5 billion for the first quarter of 2021.

Chevron reported record production in the Permian, at 692,000 barrels of oil equivalent per day in the first quarter, and raised its 2022 guidance to 700,000 - 750,000 bpd, an increase of over 15 percent from 2021.

“Chevron is doing its part to grow domestic supply with U.S. oil and gas production up 10 percent over first quarter last year,” Mike Wirth, Chevron’s chairman and chief executive officer, said in a statement.

By Tsvetana Paraskova for

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Edited by Tom Nolan

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Natural Gas and Oil price forcasts are in this episode, along with many other commodities, stocks, crypto and bonds.

KITCO NEWS  - Monday May 2nd, 2022

'Nastiest storms coming'; Market wipeout is next, Gareth Soloway predicts winners and losers


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Upstream Oil Industry To See Highest Profits Ever In 2022

By Rystad Energy - May 03, 2022, 9:00 AM CDT

  • Total free-cash-flow from E&Ps  soared from $126 billion in 2020 to almost $500 billion in 2021.
  • Rystad: the current financial health of public upstream operators is at an all-time high.
  • Rystad: total free-cash-flow could total as much as $834 billion in 2022.

Public exploration and production (E&P) companies are on track to shatter previous record profits this year as high oil and gas prices and surging demand drive financial success. Rystad Energy research shows that total free cash flow (FCF)*, a company’s cash from operations after accounting for outflows and asset maintenance, will balloon to $834 billion, a 70% increase from the $493 billion profits in 2021. Total FCF from public E&Ps fell to around $126 billion in 2020 as a result of the Covid-19 pandemic and the ensuing oil price collapse, halving the prior year’s total. As the global economy rebounded and fuel demand increased, last year’s FCF levels surged to nearly $500 billion, the highest profits ever for the upstream industry.

“The current financial health of public upstream operators is at an all-time high. Still, the good times are set to get even better this year, thanks to a perfect storm of factors pushing profits and cash flow to another record high in 2022,” says Espen Erlingsen, Rystad Energy’s head of upstream research.

The main contributing factor to these glowing financials is sustained high oil and gas prices. With average Brent oil prices estimated at $111 per barrel in 2022, a Henry Hub gas price at $4.2 per thousand cubic feet (Mcf) and a European gas price of $25 per Mcf, total FCF for public upstream companies will reach $834 billion this year.

Related: Buffett Is Betting Big On Oil And Gas Stocks


However, it is not just record high FCF on the table for public upstream operators. Cash from operations** is also expected to rocket this year, breaking the $1 trillion threshold for the first time. The $1.1 trillion projected annual total is a 56% jump from 2021 levels of $719 billion, which was the highest yearly total since 2014.

Cash from operations is typically used to fund new investments and financial costs, such as debt payments and dividends. In 2020, cash from operations dropped by almost $200 billion, or around 35%, implying that companies had less money to finance new activity and issue payouts to their owners. As a result, investments also dropped in 2020, falling by almost $100 billion or around 30%.

Despite the robust growth in cash from operations, investments are not expected to grow significantly this year, inching up to $286 billion from $258 billion in 2021. The investment ratio*** shows the disparity between record cash flow and profits, and the portion of those windfalls that are reinvested. This ratio has fluctuated during the past decade, averaging around 72%. This year, however, the projected investment ratio is expected to plunge to 26%, the lowest since the early 1980s.

The meager investment ratio and soaring FCF indicate that public E&P companies will have significant cash available to pay down debt or fork out dividends to shareholders. Much of last year’s profit was spent on reducing debt, which has left upstream operators in a very healthy financial position. The upshot of this is that a significant portion of the vast profits anticipated this year will likely be paid out to shareholders.

How the operators stack up


Almost all the large public E&P companies will have an investment ratio between 20% and 30% in 2022. US independent Occidental Petroleum has the lowest ratio of about 20%, while US major ExxonMobil is expected to see the most significant increase in FCF in 2022, growing by about $18 billion. Compatriot independent Hess is an outlier among these companies with an investment ratio of around 45%, due to the company’s plans to ramp up investments in Guyana and the core US shale patch of the Bakken.

*FCF includes all cash flows from upstream activity. It does not include cash from financing or hedging effects.

**Cash from operations is calculated as revenue minus operational costs and government take.

***Investment ratio is calculated as investments divided by cash from operations.

By Rystad Energy

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Gold: Powell’s Remarks Just Dovish Enough to Chase Out Weak Shorts

Published: May 5, 2022, 01:25 CDT3min read
Gold prices are likely to be capped unless the economy weakens so much the Fed has to pull back the reins on further rate hikes.

Gold futures are edging higher early Thursday as short-sellers continue to cover positions after U.S. Federal Reserve Chair Jerome Powell softened his tone about a series of aggressive rate hikes for the year.

Powell’s comments didn’t change the trend to up, but what they did was encourage bearish traders, perhaps looking for rate hikes as high as 75-basis points, to aggressively cover positions.

Generally speaking, as long as the Fed is raising rates, gold is going to have a hard time changing its trend to up. This could happen, however, in a couple of months if inflation continues to surge or if the Fed’s rate hikes trash the country’s economic recovery, forcing the Fed to become less-aggressive.

At 05:43 GMT, June Comex gold futures are trading $1901.90, up $33.10 or +1.77%. On Wednesday, the SPDR Gold Shares ETF (GLD) settled at $175.81, up $1.72 or +0.99%.

What Did the Fed Do and What Did Powell Say to Shake Up the Gold Market?

The Federal Reserve increased its benchmark interest rate by half a percentage point, in line with market expectations. In addition, the central bank outlined a program in which it eventually will reduce its bond holdings by $95 billion a month. The rate hike was the largest since 2000 and was designed as an aggressive response to burgeoning inflation pressures.

Gold prices firmed after the Fed raised rates and released its monetary policy statement because those moves were telegraphed for weeks.

What triggered the short-covering rally were Fed Chairman Jerome Powell’s comments that underlined his commitment to bring inflation down while indicating that raising rates by 75 basis points at a time “is not something the committee is actively considering.

Market Mechanics: Lower Yields, Lower Dollar Lead to Higher Gold Prices

High yields and a stronger U.S. Dollar have been driving gold prices sharply lower for weeks. So it nearly goes without saying that a drop in yields and the dollar would push prices higher. This is what happened Wednesday afternoon.

The 10-year Treasury yield turned lower Wednesday after Powell indicated the central bank won’t get even more aggressive in raising rates. After essentially getting ahead of the Fed, Treasury bond sellers and U.S. Dollar buyers had to make adjustments to their positions to price in the new information.

Consequently, gold traders covered some of their short positions since lower bond yields make zero-yield bullion more attractive by lowering its opportunity cost. Furthermore, falling rates made the U.S. Dollar a less-attractive investment and made dollar-denominated gold more attractive to foreign buyers.

Short-Term Outlook

We could see a near-term short-covering rally in gold because of the fresh news, but I don’t expect to see a major change in the trend because the U.S. economy is still strong and the Fed is going to continue to raise rates at future meetings until inflation gets under control.

Powell said, the American economy is very strong and well-positioned to handle tighter monetary policy. Adding that he foresees a “soft or softish” landing for the economy despite tighter monetary policy.

Given this assessment, gold prices are likely to be capped unless the economy weakens so much the Fed has to pull back the reins on further rate hikes. But it may takes months before we even know that.

In the meantime, traders are going to have to monitor data on housing, job growth, and wage increases to ascertain whether the Fed has to get more- or less-aggressive with its rate hikes.

For a look at all of today’s economic events, check out our economic calendar.

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U.S. Oil Firms Generate Highest Cash Flows Since 2014

By Tsvetana Paraskova - May 05, 2022, 10:30 AM CDT

U.S. public oil producers saw their combined cash from operations hit $27.5 billion in the fourth quarter of 2021, the largest quarterly figure since the third quarter of 2014, the Energy Information Administration (EIA) said on Thursday. 

The rising crude oil prices in the latter part of last year helped the 42 listed oil firms that the EIA included in its analysis to significantly increase cash from operations, as well as capital expenditures. Capex at the companies jumped by 60% quarter over quarter to $15 billion in the fourth quarter of 2021, according to EIA’s analysis of the published financial reports of 42 public oil producers. 

Despite the higher capex in Q4, crude oil production was still trending 10% below the record levels seen just before the start of the pandemic. 

WTI Crude prices averaged $77 per barrel in the fourth quarter of 2021, up by 82% compared with the same quarter of 2020. Production, however, has not grown in response to the much higher oil prices, the EIA said, noting that a shortage of rigs and crews to bring wells online were two of the constraints to a significant increase in drilling activity. 

In addition, U.S. producers focused on completing drilled-but-uncompleted wells (DUCs), which resulted in the fewest number of DUCs in the U.S. oil-producing regions in March 2022 since May 2014. 

The drilling of new wells needs more capital expenditure and hiring rig crews and services providers that are currently in short supply amid bottlenecks in the shale patch. As a result, U.S. tight oil production is not rising as fast as in previous upcycles, and surely not as quick as the Biden Administration wants as it looks to lower the highest gasoline prices in America in eight years. 

All forecasts point to U.S. oil production rising this year compared to 2021, but growth will likely happen at a slower pace than expected a few months ago. Capex discipline from the largest shale firms, supply chain bottlenecks, and labor shortages will cap U.S. oil production growth, industry executives say.

By Tsvetana Paraskova for

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It may take far longer till this kind of War ends. 

The boycott is not working. As example Greek Oil tankers took 190 full loads from Russian Ports to Europe's. Russian companies ordered the Tankers and they are free to deliver in every Port.

There is enough income for the Russian Government

Today Russian Soldiers clean up the Mess in Ukrainian, the Ukrainian Army was not seen there. They even have time to produce Street signs in Russian language for Mariupol.

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12 hours ago, Starschy said:

It may take far longer till this kind of War ends. 

The boycott is not working. As example Greek Oil tankers took 190 full loads from Russian Ports to Europe's. Russian companies ordered the Tankers and they are free to deliver in every Port.

There is enough income for the Russian Government

Today Russian Soldiers clean up the Mess in Ukrainian, the Ukrainian Army was not seen there. They even have time to produce Street signs in Russian language for Mariupol.

what is the name of the news streets???? Admiral Makarov Boulevard  ???? Moskova Avenue????


Edited by notsonice

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U.S. Shale Swings From Losses To Record Cash Flows

By Tsvetana Paraskova - May 08, 2022, 6:00 PM CDT

  • U.S. shale focuses on returning capital to shareholders in 2022.
  • Deloitte: the shale patch is on track for massive free cash flows of a combined $172 billion in 2022 alone.
  • Several large shale producers aren’t boosting production in 2022.

After years of plowing money into boosting production and thus depressing oil prices, the U.S. shale patch emerged from the pandemic-inflicted slump with unwavering capital discipline which, combined with $100+ oil, is paying off with record cash flows for American oil producers. The largest shale producers have left years of bleeding cash behind, focusing on returning capital to shareholders from the record cash flows they have been generating for several months now. As they report first-quarter figures these days, public companies vow continued disciplined spending and only modest production growth as “drill, baby, drill” is no longer shale’s primary goal. 

Investors, in turn, are rewarding the discipline—most of the 20 top-returning firms in the S&P 500 year to date are oil companies, including Occidental, Coterra Energy, Valero, Marathon Oil, APA, Halliburton, Devon Energy, Hess Corporation, Marathon Petroleum, ExxonMobil, ConocoPhillips, Chevron, Schlumberger, EOG Resources, and Pioneer Natural Resources. 

As a result of the highest oil prices since 2014 and capex discipline, the shale patch is on track for massive free cash flows of a combined $172 billion in 2022 alone, per Deloitte estimates cited by Bloomberg. By 2020, the shale industry had booked $300 billion in net negative cash flow in the 15 years since the first shale boom, Deloitte estimated back then.

Unlike in the previous upcycles, U.S. producers are now directing a large part of the record cash flows to boost shareholder returns with higher dividends, special dividends, and share buybacks. 

U.S. producers do not plan to abandon the newly-found capital discipline and will grow production only modestly, the top executives at most public shale producers said during the Q1 earnings calls this week. Many firms acknowledged the supply chain, inflationary, and labor constraints that could result in slower American oil production growth than the increase the EIA and analysts expect. Producers are also wary of the Biden Administration’s calls for only a short-term ramp-up in production amid otherwise negative comments on the oil industry, which undermines the firms’ visibility and willingness to plan higher investments in the medium term.  

“To say bluntly, the administration's comments are certainly causing a lot of uncertainty in the market, both in the terms of regulatory taxation, legislation, and negative rhetoric toward our industry. And that creates uncertainty in our owners', our shareholders' minds about what the future of this industry really is,” Diamondback Energy’s CEO Travis Stice said on the earnings call this week. 

Diamondback Energy will keep its current oil production levels of 220,000 net barrels of oil per day, Stice said.

“While we believe that efficiently growing our production base is achievable over the long term, we do not feel that today is the appropriate time to begin spending dollars that would not equate to additional barrels into multiple quarters from now,” he added. 

Another producer, Devon Energy generated $1.3 billion of free cash flow for the first quarter, its highest-ever quarterly FCF.  

“With this increasing amount of free cash flow, our top priority is to accelerate the return of capital to shareholders,” CFO Jeff Ritenour said.

Continental Resources “delivered a record quarter of adjusted earnings per share and exceptional free cash flow generation,” CFO John Hart said as the shale giant announced a fifth consecutive increase to quarterly dividend.

Chesapeake Energy, which went through a bankruptcy during 2020, reported $532 million in adjusted free cash flow for Q1, its highest quarterly FCF ever, and launched a $1-billion share and warrant repurchase program. 

Pioneer Natural Resources, for its part, will be returning 88% of its first-quarter free cash flow of $2.3 billion to shareholders, while keeping disciplined oil growth of up to 5%, CEO Scott Sheffield said. 

Related: Germany Will Have First LNG Import Capacity By Year’s End

It was Sheffield who said as early as in February: “Whether it's $150 oil, $200 oil, or $100 oil, we're not going to change our growth plans.” 

In Pioneer’s earnings call this week, Sheffield said that U.S. shale would likely grow less than the EIA and other analysts expect, which would put upward pressure on oil prices. 

“What’s happening now in regard to labor constraints, frack fleet constraints, inflation constraints - I just think it’s going to be tough to hit some of the numbers. It even makes me even more bullish about some of the oil price numbers that are out there,” Sheffield said, as carried by Reuters. 

Sheffield sees U.S. oil production growing by 500,000 bpd-600,000 bpd this year, compared to EIA and other estimates of 800,000 bpd-1 million bpd growth. 

Added to operational constraints and capital discipline is the industry’s frustration with the Biden Administration, which producers say has singled out oil firms to blame for the highest gasoline prices in eight years, while calling for a short-term jump in production. Democratic lawmakers even said last week they would propose legislation to allow state and federal agencies to “go after” oil companies. Senate Majority Leader Chuck Schumer compared oil firms to “vultures” booking record profits and using the COVID and Ukraine tragedies for market manipulation.

“Talk about mixed messages. We can’t treat the oil and natural gas industry as a kind of light switch that is turned on or off to suit the political moment,” American Petroleum Institute (API) President and CEO Mike Sommers said this week. 

“It can be easy and fashionable to speak as if we hardly even need oil or natural gas anymore. But then disruptions occur, and once again everybody is staring down the truth. Now, suddenly, some policymakers want to flip the switch “on” again, but only for a short time. And as practical realities intrude, mostly what we hear from Washington is blame-shifting and excuses,” Sommers added.

By Tsvetana Paraskova for

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Has Oil Found A Bottom At $100?

By Irina Slav - May 10, 2022, 6:00 PM CDT

  • Despite some recent volatility sparked by China’s COVID lockdowns, oil prices may have found a bottom.
  • Russia shed half a million barrels daily in March and an estimated 1 million barrels daily in April under the weight of the Western sanctions.
  • The lost oil supply could worsen in the coming weeks, and many analysts are predicting that much of Russia’s lost supply may never come back online.

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Oil Tanker Stocks Get Hammered In Market-Wide Selloff

By Alex Kimani - May 10, 2022, 5:00 PM CDT

  • Tanker stocks have fared worse than other energy stocks during the market-wide selloff.
  • Year-to-date, ocean shipping stocks are still outperforming broader equity indexes and domestic transport stocks.
  • Clarksons Platou Securities: spot rates for modern very large crude carriers have fallen to just $8500 per day.

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I will never accept words like "it's too late to get into Bitcoin." The crypto market is incredibly volatile, so it creates an insane amount of possibilities for all of us. It might be late to buy Bitcoin, but there are a lot of other great currencies that deserve our attention. Honestly, I think the crypto market has insane potential, and it hasn't yet fulfilled even 50% of it. That's why projects like are incredibly popular, and people will enjoy using these sorts of platforms.

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Is It Too Late To Invest In The Oil Price Rally?

By Alex Kimani - Jun 22, 2022, 7:00 PM CDT

  • Energy equities are experiencing strong selling pressure as crude prices drop.
  • Analysts are at odds about whether the oil rally still has room to run, or whether prices are due to drop further.
  • Many analysts say that the oil price rally is far from over, and that the latest correction might offer fresh entry points for investors.

The oil market is currently going through one of the most turbulent periods since the infamous March 2020 collapse, as investors continue to grapple with recessionary fears. Oil prices have continued sliding in the wake of the central bank deciding to hike the interest rate by a record-high 75 basis points, with WTI futures for July settlement were quoted at $104.48/barrel on Wednesday's intraday session, down 4.8% on the day and 8.8% below last week's peak. Meanwhile, Brent crude futures for August settlement were trading 4% lower in Wednesday's session at $110.10/barrel, a good 9.4% below last week's peak. While crude prices have taken a big hit, oil and gas stocks have fared even worse, with energy equities experiencing nearly double the selling pressure compared to WTI crude.

"Year to date, Energy is the sole sector in the green ... but concern now is that fact that Bears are coming after winners, thus they may take Energy down. The Energy Sector undercut its rising 50 DMA and now looks lower to the rising 200 DMA, which is currently -9% below last Friday's close. Crude Oil is sitting on its rising 50 DMA and has a stronger technical pattern," MKM Chief Market Technician J.C. O'Hara has written in a note to clients.

"Normally we like to buy pullbacks within uptrends. Our concern at this point in the Bear market cycle is that leadership stocks are often the last domino to fall, and thus profit taking is the greater motivation. The fight-or-flight mentality currently favors flight, so we would rather downsize our positioning in Energy stocks and harvest some of the outsized gains achieved following the March 2020 COVID low," he has added.

Related: Russian Refinery On Fire After Kamikaze Drone Strike

According to O'Hara's chart analysis, these energy stocks have the greatest downside risk:

Antero Midstream (NYSE:AM), Archrock (NYSE:AROC), Baker Hughes (NASDAQ:BKR), DMC Global (NASDAQ:BOOM), ChampionX (NASDAQ:CHX), Core Labs (NYSE:CLB), ConocoPhillips (NYSE:COP), Callon Petroleum (NYSE:CPE), Chevron (NYSE:CVX), Dril-Quip (NYSE:DRQ), Devon Energy (NYSE:DVN), EOG Resources (NYSE:EOG), Equitrans Midstream (NYSE:ETRN), Diamondback Energy (NASDAQ:FANG), Green Plains (NASDAQ:GPRE), Halliburton (NYSE:HAL), Helix Energy (NYSE:HLX), World Fuel Services (NYSE:INT), Kinder Morgan (NYSE:KMI), NOV (NYSE:NOV), Oceaneering International (NYSE:OII), Oil States International (NYSE:OIS), ONEOK (NYSE:OKE), ProPetro (NYSE:PUMP), Pioneer Natural Resources (NYSE:PXD), RPC (NYSE:RES), REX American Resources (NYSE:REX), Schlumberger (NYSE:SLB), U.S Silica (NYSE:SLCA), Bristow Group (NYSE:VTOL), and The Williams Companies (NYSE:WMB).

Tight Supplies

Whereas the bear camp, including the likes of  O'Hara, believes that the oil price rally is over, the bulls have stood their ground and view the latest selloff as a temporary blip.

In a recent interview, Michael O'Brien, Head of Core Canadian Equities at TD Asset Management, told TD Wealth's Kim Parlee that the oil supply/demand fundamentals remain rock solid thanks in large part to years of underinvestment both by private producers and NOCs.

You can blame ESG—as well as expectations for a lower-for-longer oil price environment over the past couple of years—for taking a toll on the capital spending of exploration and production (E&P) companies. Indeed, actual and announced capex cuts have fallen below the minimum required levels to offset depletion, let alone meet any expected growth. Oil and gas spending fell off a cliff from its peak in 2014, with global spending by exploration and production (E&P) firms hitting a nadir in 2020 to a 13-year low of just $450 billion.

Even with higher oil prices, energy companies are only increasing capital spending gradually with the majority preferring to return excess cash to shareholders in the form of dividends and share buybacks. Others like BP Plc. (NYSE:BP) and Shell Plc. (NYSE:SHEL) have already committed to long-term production cuts and will struggle to reverse their trajectories.

Norway-based energy consultancy Rystad Energy has warned that Big Oil could see its proven reserves run out in less than 15 years, thanks to produced volumes not being fully replaced with new discoveries.

According to Rystad, proven oil and gas reserves by the so-called Big Oil companies namely ExxonMobil (NYSE:XOM), BP Plc., Shell, Chevron (NYSE:CVX), TotalEnergies ( NYSE:TTE), and Eni S.p.A (NYSE:E) are all falling, as produced volumes are not being fully replaced with new discoveries.


Source: Oil and Gas Journal

Massive impairment charges has seen Big Oil's proven reserves drop by 13 billion boe, good for ~15% of its stock levels in the ground. Rystad now says that the remaining reserves are set to run out in less than 15 years, unless Big Oil makes more commercial discoveries quickly.

The main culprit: Rapidly shrinking exploration investments.

Global oil and gas companies cut their capex by a staggering 34% in 2020 in response to shrinking demand and investors growing wary of persistently poor returns by the sector.

ExxonMobil, whose proven reserves shrank by 7 billion boe in 2020, or 30%, from 2019 levels, was the worst hit after major reductions in Canadian oil sands and U.S. shale gas properties. 

Shell, meanwhile, saw its proven reserves fall by 20% to 9 billion boe last year; Chevron lost 2 billion boe of proven reserves due to impairment charges, while BP lost 1 boe. Only Total and Eni have avoided reductions in proven reserves over the past decade.

The result? The U.S. shale industry has only managed to bump up 2022 crude output by just 800,000 b/d, while OPEC has consistently struggled to meet its targets. In fact, the situation has become so bad for the 13 countries that make up the cartel that OPEC+ produced 2.695 million barrels per day below its crude oil targets in the month of May.

Exxon CEO Darren Woods has predicted that the crude markets will remain tight for up to five years, with time needed for firms to "catch up" on the investments needed to ensure supply can meet demand. 

"Supplies will remain tight and continue supporting high oil prices. The norm for ICE Brent is still around the $120/bbl mark," PVM analyst Stephen Brennock has told Reuters after the latest crude selloff.

In other words, the oil price rally might be far from over, and the latest correction might offer fresh entry points for investors.

Credit Suisse energy analyst Manav Gupta has weighed in on the stocks with the most exposure to oil and gas prices. You can find them here.

Meanwhile, you can find some of the cheapest oil and gas stocks here.

By Alex Kimani for

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Wed June 22 - REUTERS

Berkshire Hathaway buys 9.6 million more Occidental shares, raises stake to over 16%

(Reuters) - Warren Buffett's Berkshire Hathaway Inc bought another 9.6 million shares of Occidental Petroleum Corp, boosting its stake to 16.3% as the oil company's shares come off the year's high.

The purchases were made over the past week and cost about $529 million, Berkshire said in a regulatory filing on Wednesday. These come on top of a $336 million share purchase by Berkshire last month in the oil company, and $7 billion in purchases earlier this year.

Following the purchases, Berkshire now owns about 152.7 million Occidental shares worth about $8.52 billion based on Occidental stock's Wednesday close, which is down over 21% since it touched its year's high in May.

However, Occidental's share prices are currently up over 90% this year, after more than doubling, as they benefited from Berkshire's purchases and rising oil prices following Russia's invasion of Ukraine.

Berkshire is the largest individual shareholder in Occidental. The company also owns options to buy 83.9 million Occidental shares, which if exercised, would bring its stake to over 25%.

Berkshire has been on a spending spree in 2022. It spent $51.1 billion on equities in the first quarter, including an increased $25.9 billion stake in oil company Chevron Corp.

Analysts have viewed Occidental and Chevron as a way for Berkshire to benefit from rising oil prices following Russia's invasion of Ukraine.

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Monday June 20, 2022 (Holiday Juneteenth in U.S.)
Bitcoin below $10k is ‘very possible’; Stocks won’t make new highs for years
– Gareth Soloway

Kitco News interviews Gareth.
Technical trader and chart price analyst Gareth Soloway had forcast months ago that Bitcoin would drop to 20k, which it recently has. He has repeatedly correctly called market prices for various stocks, crypto, commodities, gold and silver.  

 During a time when few people believed Gareth’s price forcast on Bitcoin, it came true to almost the exact dollar level. Watching him explain the chart hypothesis before the event is interesting.

2021 LINKS Gareth Soloway
Profound VIDEO.  On Friday, May 14th, 2021 Gareth Soloway correctly forecast that Bitcoin would see a correction to $30,000.

He is a technical trader and shows you his graph and hypothesis here…


Gareth is again interviewed on September 20th, 2021 and provides his technical chart analysis for Bitcoin, Gold and Stocks.

$20k Bitcoin is next after hitting $52k, Gareth Soloway’s upside target

(23 minutes)

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Oil Markets Could Face A Doomsday Scenario This Week

By Cyril Widdershoven - Jun 28, 2022, 7:00 PM CDT

  • Expect lots of oil price volatility in the coming months as markets finally discover just how much spare capacity OPEC members really have.
  • Oil production outages in Libya and the continued impact of Russia’s invasion of Ukraine are going to push oil prices higher if new supply isn’t found.
  • While some analysts are predicting oil demand destruction in the near future, there is little evidence to back up those claims.

Global oil markets are going to be very volatile in the coming months if news emerging from OPEC’s main producers about production capacity constraints turns out to be true. OPEC will be meeting again in the coming days to discuss its export agreements, while today the oil group is presenting its Annual Statistical Bulletin (ASB) 2022. While the media is likely to be focused on rumors in the next 24 hours of a possible change in the export strategy of OPEC+, the real focus should be on whether or not the oil cartel is even capable of substantially increasing its production.  For years, OPEC producers have been the main swing producers in oil markets. With a presumed spare capacity of more than 3-4 million bpd, Saudi Arabia and the UAE have always been seen as a point of last resort in case of a major crisis in oil and gas markets. During the former global oil glut, it seemed nothing could threaten the oil market, even when major conflicts emerged in Libya, Iraq, or elsewhere. The re-opening of the global economy after COVID-19, however, has brought fear back into the market that leading oil producers, including the USA and Russia, are unable to supply adequate volumes to the market. OPEC kingpins Saudi Arabia and the UAE are now being looked upon to increase production to historically high levels and bring oil prices down. Russia’s war against Ukraine, removing a possible 4.4 million bpd of crude and products in the coming months, has thrown this spare capacity problem into sharp relief. 

This week, a possible doomsday scenario could emerge in oil markets, based not only on OPEC+ export strategies but also due to increased internal turmoil in Libya, Iraq, and Ecuador. Possible other political and economic turmoil is also brewing in other producers, while US shale is still not showing any signs of a substantial production increase in the coming months. 

Global oil markets have long believed that OPEC has enough spare production capacity to stabilize markets, with Saudi Arabia and the UAE just needing to open their taps. There is ,however, no real evidence to suggest that OPEC has increased production capacity in place in the short term. A research note by Commonwealth Bank commodities analyst Tobin Gorey already noted that OPEC’s two leaders are producing at near-term capacity limits. At the same time, UAE Minister of Energy Suhail Al Mazrouei put even more pressure on oil prices as he stated that the UAE is producing near-maximum capacity based on its quota of 3.168 million barrels per day (bpd) under the agreement with OPEC and its allies. That comment could still indicate that there is some spare capacity left in Abu Dhabi, but the remarks were made after French President Emmanuel Macron had stated to US president Biden during the G7 meeting that not only is the UAE producing at maximum production capacity, but also that Saudi Arabia only has another 150,000 bpd of spare capacity available. 

Macron stated that UAE’s president Mohammed bin Zayed (MBZ) told him that the UAE is at maximum production capacity while claiming that Saudi Arabia can increase production by another 150,000 bpd. Macron also claimed that Saudi Arabia won’t have a huge additional capacity within the coming six months. The official figures for both OPEC producers counter this narrative, however. Saudi Arabia is producing at 10.5 million bpd, with official capacity between 12-12.5 million bpd. The UAE is producing around 3 million bpd, claiming to have a capacity of 3.4 million bpd. The two countries’ spare production is still officially slated to be around 3.9 million bpd combined. Most analysts, however, have been questioning these figures for years. 

Looking at OPEC+'s own production targets, the group has not been producing at agreed levels for months. At the Middle East and North Africa-Europe Future Energy Dialogue in Jordan, UAE’s Al Mazrouei said that OPEC+ was running 2.6 million barrels a day short of its production target. That means a potential shortage in the market, which could increase even further if internal turmoil causes further production decreases. For July-August, OPEC+ agreed to increase output by another 648,000 bpd, which would mean that the total output cut during COVID-19 pandemic of 5.8 million bpd has been restored. Whether or not OPEC+ is able to reach that level in the coming weeks remains very uncertain. 

Pressure will build in the coming days, as Al Mazrouei’s remarks seem to rebuke claims of a spare capacity shortage, but as always “where there is smoke, there is a fire”.  A possible spare production capacity shortage, or non-availability at all, combined with an expected force majeure of Libya’s NOC in the Gulf of Sirte, and a suspension of Ecuador’s oil output (520,000 bpd) in the coming days due to anti-government protests, are likely to lead to an oil price spike. 

There is still some optimism in markets about a real demand-supply crunch, as high inflation levels and a possible global economic slowdown could lead to lower demand. Until now, however, that optimism has not materialized at all, demand is still increasing, even though gasoline and diesel prices are breaking historical price levels. The re-opening of the Chinese economy, a natural gas shortage globally, and higher temperatures in the coming weeks, combined with the normal peak in demand due to the US and EU driving season, all look set to push oil prices higher.

OPEC’s future is at stake if spare production capacity really has run out. For years, analysts (including myself) have been warning about a lack of investment in upstream worldwide. That has already led to lower production capacity of independent oil companies, such as most IOCs, and for national oil companies, the situation appears to be similar. Even though Saudi Aramco, ADNOC, and some others, have been keeping their upstream (and downstream) investments level during the last decade (even during COVID), other main OPEC producers have seen dwindling investment budgets or even full-scale crises. Most OPEC producers could increase their overall production still, but only for a limited period of time. Where most spare production capacity is short-term based, partly to avoid damaging reserves in the long run, the current oil crisis is a much more prolonged long-term issue. Western sanctions on Russia, combined with existing sanctions on Venezuela and Iran, will hurt markets for years to come. 

There is no quick-fix solution to the current oil market crisis, even the lifting of sanctions on Venezuela or Iran will not result in substantial volume increases. At the same time, increased Western political interference in the already struggling market will hit volumes too. The growing call in the USA, UK, and EU, to put a windfall tax on oil and gas companies will not only constrain further investments in upstream but will also lead to higher prices at the pump. Consumers are not going to feel any positive price effects and can expect steadily increasing energy bills in the coming months. 

No statements made by OPEC in the coming two days are going to be able to remove the worries in the market. OPEC’s future depends fully on its power to stabilize markets. At present, there appear to be no options available to the cartel. Without new oil production hitting markets soon, OPEC leaders MBZ and Crown Prince Mohammed bin Salman need to try to maintain the illusion of spare capacity. If spare production capacity is revealed to be under 1.5-2 million bpd, the future of both OPEC and oil markets would be bleak.

By Cyril Widdershoven for

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WEd June 29 - EXCERPTS...

That brings us to our call of the day from the editor of the MacroTourist newsletter, Kevin Muir, who said he has returned to the “long side of the energy market,” buying those oil futures, with energy stocks and even natural gas on his near-term shopping list.

He said there was really no reason for last week’s $10 crude freefall, noting that the “best bull moves have the sharpest corrections…They grind higher, and then out of nowhere, decline sharply, only to resume their relentless march upward. This is no different.”

Oil pulled back because “investors got too long”, but the longer-term trend is there, with crude, a big energy ETF XLE, +2.70% and even natural-gas charts repeating the pattern of “a sharp decline into support,” he said.



As for challenges to his bullish view, Muir said his worries about rising supplies were quashed by recent reports that French President Emmanuel Macron told President Joe Biden that oil giant Saudi Arabia no spare capacity.

“Others might have previously felt comfortable that Saudi Arabia had little extra supply to offer, but for me, this Macron/Biden interaction was the moment I accepted that theory,” said Muir, who also doesn’t see Russia pulling out of Ukraine soon, which would theoretically send prices tumbling.

As for longer-term supply, Muir doesn’t see energy companies fixing the issue via capital expenditure as “most of the rhetoric” is blaming them and “threatening draconian measures.”

The last hope for energy bears comes down to hopes for an economic rout. “What’s shocking is that some bears seem to be rooting for Powell to throw us into a recession – somehow believing that having people lose their jobs is better than high gas prices,” said Muir.

While some strategists believe high oil prices will cause an economic contraction, Muir says $112-a-barrel oil isn’t expensive, given that between 2009 to 2014 oil prices ranged from $100 to $150 with little economic damage.

He argues that really, the economy is solid, with pandemic fiscal stimulus, a solid job market and pent-up demand making it tougher to tip the economy into recession. And then Muir said sooner or later, we’ll get increased Chinese demand once COVID lockdowns are over. Read the full blog here.


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