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OIL, Discussion
nipper
post Posted: Nov 25 2020, 09:00 AM
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Oil has surged to an eight month high overnight, with vaccine hopes and the smooth transition to a Biden presidency supporting risk assets across the globe.

A strong rally through November had put the oil market on track to reclaim its highs from late August, with hopes an effective vaccine could be rolled out within the next few months offsetting concerns over lockdowns and rising COVID19.

Brent crude surged 4 per cent to $US47.89 a barrel, its highest level since March 4, while West Texas Intermediate advanced 4.2 per cent to $US44.88 a barrel.

The strong surge has Brent crude up 27.9 per cent for the month, one of its best months on record



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Sep 6 2020, 12:27 PM
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is this an heroic assumption, or will it come to pass?
QUOTE
Oil companies are risking some $400 billion in stranded assets with their focus on petrochemicals production growth that relies on strong growth in demand for plastics, Carbon Tracker has said in a new report. ....

https://oilprice.com/Energy/Crude-Oil/Big-O...ded-Assets.html


QUOTE
While the major displacement of oil demand in the transport sector has yet to materialize as EV penetration has been slower than major projections estimated, the crusade against plastics has begun and will only intensify in the coming years. This would mean more initiatives for banning single-use plastics and more regulation in place for plastics recycling. Without regulation, the crusade will fail.According to Carbon Tracker, however, it will win, not least because of problems inherent in the plastics industry.

Plastics impose a massive untaxed externality upon society which this report estimates is about $1,000 per tonne ($350bn a year) from carbon dioxide, health costs, collection costs, and ocean pollution, the report authors wrote, adding that these can be mitigated through recycling, replacing with alternative materials, and improving the design and regulation.

If demand for plastics falls, then some 80 million tons of new plastics production capacity worth $400 billion will be stranded....




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Aug 12 2020, 09:58 AM
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https://www.afr.com/markets/commodities/lon...20200810-p55kc5

There are also rules that forbid trading with the goal of deliberately affecting the settlement. In 2008, Dutch firm Optiver was sanctioned by the CFTC for abusing the TAS mechanism and boasting about its exploits in emails. And in 2011, the agency introduced a rule prohibiting a practice known as banging the close, which it defines as trading heavily during the settlement period in one market to influence a larger position elsewhere.
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bang on close?? for sure , just look at last 10 minutes trade CME can have clues . i guess they just don't want to do it!! grrr.gif



 
early birds
post Posted: Jul 13 2020, 09:17 AM
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https://www.sharecafe.com.au/2020/07/13/ope...-ease-oil-cuts/

OPEC, specifically Saudi Arabia has blinked on global oil production curbs.

Confidence in the current level of global oil prices will take hit from reports that Saudi Arabia wants to slash the 9.7 million barrels a day production cut due to expire at the end of the month.

Media reports at the weekend said the OPEC + group, which includes Russia and several smaller producers will be asked to approve a Saudi move to trim the 9.7 million barrel reduction by 2 million barrels a day, to apply from August 1.

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the big swings already over , not sure at what level people can bet on oil again???? unsure.gif sadsmiley02.gif



 
nipper
post Posted: Jun 29 2020, 11:43 AM
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Chesapeake Energy filing for Ch 11 bankruptcy protection ..... that or a similar company; long awaited. I wonder how many more.

And the debt instruments floating around.; please, FED, do not buy them




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
early birds
post Posted: Jun 29 2020, 08:50 AM
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https://www.sharecafe.com.au/2020/06/29/sha...-11-bankruptcy/


The disruption in global energy markets has claimed its biggest victim so far Chesapeake Energy Corp filed for Chapter 11 bankruptcy protection on Sunday in the US, ending life as a fallen pioneer of the fracking boom and now bust.

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saw these type of thingy coming, thought i had right bet.....but............................ only can cry for myself!! sadsmiley02.gif




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nipper
post Posted: Apr 28 2020, 12:57 PM
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In Reply To: nipper's post @ Apr 27 2020, 11:27 AM

triage (and others)
hat-tip to Investoboy
Contagion in Oil futures. Paper buyers and Physical sellers.

when storage tanks are full, what happens? (= the May anomaly of negative prices likely to occur again)
Retail is piling in to ETPs like USO; producers have buyers BUT futures have an end date. Normally, settlement of paper and rolling forward is achievable, but the imbalance is pushing out into following months

https://www.macrovoices.com/podcasts-collec...with-jim-bianco
ETPs not necessarily capped at zero. .... a loss that won't be covered, so who carries the loss. Broker, manager, exchange? And the squeeze. 130,000 July contract. 100,000 Aug contracts. (June should be OK as Cushing may absorb)
USO owns 1/4 of market, broker can't liquidate if there are no buyers of physical oil. (no wonder trump wants to kick start economy)

But how do you buy a failed market??? Are ETPs a flawed structure? will this bring everything down like mortgages did in 2008?
Financial incentive to continue to produce oil that has no place to be stored. Producers have binary choice, to keep pumping or shut down (and trigger widespread defaults which are already junk status)
When?
there is a sequence of events. By early June (July contracts) out of storage; .... rinse, repeat




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Apr 27 2020, 02:32 PM
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.
QUOTE
the OPEC deal and other cuts deal isn’t enough, not with a 29 million barrels a day drop in demand this month, according to the International Energy Agency which reckons total demand this year will be around 89 million barrels, down from 101 million a day in 2019.

The 9.7 million barrels a day cut by OPEC only lasts till the end of June, then it drops to 8 million a day.
QUOTE
Reuters reports that there are suggestions from Russia that it might start burning oil in the open because it can’t store its surplus. That will be great for global warming. More gas is also now being flared as well around the world.

https://www.sharecafe.com.au/2020/04/27/can...the-oil-market/



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Apr 27 2020, 11:27 AM
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triage said elsewhere, about the current price shakeout
QUOTE
I have read one argument that even if many / most US oil shalers go broke then someone else will buy the assets for a really low price and the US will become able to be competitive even with oil staying supercheap.

With the shale oil drilling, the swing producers, one challenge is if drilling is stopped, it is quite likely impossible to return to previous output. Shale has short timeframes and needs fraccing, horizontal drilling, etc. If the pumps are halted, formation may close off, collapse.

https://oilprice.com/Latest-Energy-News/Wor...-At-31-Oil.html




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: triage  
 
nipper
post Posted: Apr 22 2020, 01:57 AM
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In Reply To: early birds's post @ Apr 21 2020, 10:11 PM

QUOTE
i smashed piggy bank to bought heaps more.

As long as it's not the kids' piggy banks smile.gif

Sophisticated thinking ....make a plan and stick to it.



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

Said 'Thanks' for this post: early birds  triage  
 
 


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