JN

Bias to upside next two months, Bias Down 2020

Recommended Posts

(edited)

Bias up next two months

1. OPEC + meeting Dec 4th.  Hard to believe market still trades on OPEC or Saudi proclamations.  But it does , so trade accordingly.

2. Saudi Aramco needs Brent minimally in upper 60's to even have a chance of launching IPO.. So look for preannounced cuts, Straights Hormuz or Red Sea incident or other effort to move price up.

3. Usually upward price movement into month end contract settlement. Like clockwork.  Lock in higher price for forward month deliveries.

 U.S. SHALE CONSOLIDATION  

The oil majors and large independents have been waiting for the opportunity to scoop up LTO/Shale acreage. They don't want the management, processes or a good part of the employees. They want the reserves. The U.S. Shale Industry is bifurcated.  Some have efficiency of scale, implement latest technology, capital and have b/e below 30 dollars. (2) others are over leveraged, behind in technology deployment and have b/e around 50 dollars.  

It was thought that the consolidation would have already happened.  The incidents in Mideast have put a floor under the price of oil.  Saudi Aranoa has needs a higher price to float IPO.  

New technology has shown some producers are increasing yield from 5%/10% up to 20%.   New technologies are being developed, tested and implemented  that could bring the average yield up to this level to those that can afford it. Majors quiet about new developments want weak sisters to capitulate. (Example Revochem now being used by 4 of top 5 Permian producers.  They analyze rock down to the microscopic level.

The day of reckoning is coming.  While technology is great it will over time reduce price per barrel.  Looks like that happens in 2020, with consolidation .

As always oil trades on news good or bad.  My opinion bias up 60 to 90 days.

Edited by Jabbar
  • Like 1
  • Upvote 1

Share this post


Link to post
Share on other sites

6 minutes ago, Jabbar said:

Hard to believe market still trades on OPEC or Saudi proclamations

Hahahaha agreed

Share this post


Link to post
Share on other sites

(edited)

11 minutes ago, Jabbar said:

Bias up next two months

1. OPEC + meeting Dec 4th.  Hard to believe market still trades on OPEC or Saudi proclamations.  But it does , so trade accordingly.

2. Saudi Aramco needs Brent minimally in upper 60's. So look for preannounced cuts, Straights Hormuz or Red Sea incident or other effort to move price up.

3. Usually upward price movement into month end contract settlement.

 U.S. SHALE CONDOLIDATION  

The oil majors and large independents have been waiting for the opportunity to scoop up LTO/Shale acreage. They don't want the management, processes or a good part of the employees.

I will ask the stupid question or more the question of ignorant.

What if tomorrow OPEC announced that they sell oil for fixed price 100 USD per barrel ?

Not 1 cent over or under, fixed price, international agreement signed by all the princes/emirs/presidents.

Edited by Marcin

Share this post


Link to post
Share on other sites

(edited)

14 minutes ago, DayTrader said:

Hahahaha agreed

How do you respond before I even finish the post.  Are you a monitor ?  You're not really a trader.  Am I correct ?  LOL

Edited by Jabbar
  • Haha 1

Share this post


Link to post
Share on other sites

(edited)

23 minutes ago, Marcin said:

I will ask the stupid question or more the question of ignorant.

What if tomorrow OPEC announced that they sell oil for fixed price 100 USD per barrel ?

Not 1 cent over or under, fixed price, international agreement signed by all the princes/emirs/presidents.

U.S. shale, Brazil, Norway,  and 90 percent of OPEC +  that do not comply now will do a brisk business.  Everyone will be HAPPY except Saudi Arabia.

That strategy will not last a week.  But when you are desparate you try anything.

My opinion

 

Edited by Jabbar

Share this post


Link to post
Share on other sites

(edited)

OPEC IS IMPOTENT.

Lost their MOJO.

THEY JUST HAVEN'T REALIZED IT YET.

This board mostly traders, not investors . . . 

. . .  but what valuation do you think Aramco IPO given ? (that's if it ever comes out)

There are 22 Investment Bank "yes men" (and women). That are brown nosing MBS.  TOO FUNNY.  

 

Edited by Jabbar
  • Like 1
  • Great Response! 1

Share this post


Link to post
Share on other sites

27 minutes ago, Jabbar said:

How do you respond before I even finish the post.  Are you a monitor ?  You're not really a trader.  Am I correct ?  LOL

Actually I think you can be not far from truth, but I think Day Trader could be just responsible for creating traffic in this forum, and thus also for the website. Or he could be just training to start a blog or something.

  • Haha 1

Share this post


Link to post
Share on other sites

hahaha I commented, and Jabbar as always added a bit, and then said 'hey I wasn't finished'

oh yeah, I'd be the first person they'd ask to get views here, I'm so popular   🙄

#droid #trump #brexit #atheist #farmer #ethanol #butalegend

Share this post


Link to post
Share on other sites

27 minutes ago, Jabbar said:

U.S. shale, Brazil, Norway,  and 90 percent of OPEC +  that do not comply now will do a brisk business.  Everyone will be HAPPY except Saudi Arabia.

That strategy will not last a week.  But when you are desparate you try anything.

My opinion

 

The agreement could be backed by 2 types of clauses:

1. Deposit clause. You deposit monthly exports revenues in the third party bank, and it is forfeited if you brake the rules.

2. Whistleblower clause. You inform about other than 100 USD price you get 10% of deposit.

But at the end of the day you are probably right about longevity of the agreement.

Share this post


Link to post
Share on other sites

(edited)

As per 2 month / 1 year headline.

A) Eia data shows total oil + products down 10 million barrels. Also I read October is a month of less demand (is this true?) . That's 1.4 million barrels a day. When and how does this get factored in? 

Edit. Also shipping costs are up / refining is down.

B)Does this lower oil price a bit? 

 

Edited by Rob Kramer
Added question

Share this post


Link to post
Share on other sites

On 10/18/2019 at 2:43 PM, Jabbar said:

My opinion bias up 60 to 90 days.

Nice call.  Hope you've got the right position.

 

  • Upvote 1

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.