Oil going up short term


Sec Pompeo and Sec Rick Perry hinted that US prob will not extend WAIVER allowing countries to import Iranian oil. Most of the waiver request look to be denied.

Plus Saudi's said would cut "exports" in addition to production in April. 

Go long oil short term  . . .  By end of year will reverse due to  (1) three new Permian pipelines and (2) four new or upgraded oil export terminals come online and (3) close to 10,000 DUCs waiting to be fracked.

OPEC PR campaign will fail by Q4.  They say free market oil will kill investment.  

NOT TRUE: Before shale gas started US paid $12.00 to $14.00 per mm/btu. Now $2.85 and investment is going crazy.  Oil will follow the same path.

Saudi's need to face reality  . . . technology is transforming oil industry.  Chevron said they are making more money today in $50's than when oil was $90.00.

Saudi's want to clear $80+ profit on oil costing them $4.00 B/E to lift.  Parties over. OPEC members will realize Saudi's want them to cut while they export 8 million bbl/day.  Russia will not cut any more. 

There is no stopping US OIL. 

Smart investments are the Oil Consolidators (Chevron, Exxon, Conoco, plus large independents).  Natural industry maturation cycle will eliminate small and midsize operators that thought oil would stay at $100 bbl forever and piled all their cashflow into more properties.  They can't afford new technologies and methods to keep up.  

What does Saudi Arabia do when oil balances at $45 bbl.  I'm concerned for them. . . .  NOT.

Edited by JJCar

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