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OIL, Discussion
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




--------------------
"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/



--------------------
"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
 

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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




--------------------
"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

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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

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jacsar
post Posted: Apr 21 2020, 10:31 PM
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In Reply To: early birds's post @ Apr 21 2020, 10:11 PM





EB, this is a political/economic war between the ruskies and the saudis backed by china to destabilise the USA and they are doing a great job...similarities go back 100 yrs or so to the 20's/30's


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early birds
post Posted: Apr 21 2020, 10:11 PM
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In Reply To: nipper's post @ Apr 21 2020, 08:15 PM

never shoot the messenger like you.

give you my thoughts
we all know months ago when a lot of countries close their boards, all get idea of lock down can do the job. the result of that is reduce demand of oil in big way.
my bet on the long side is based on produce price. thought if oil keeps low price longer than a month then there will be a lot of drillers bites the dust, so that will get demand and supplies to a balance level so the oil price will correcting itself to the up side. but -40/b on the eve of expiry day is really extreme, although i know long time ago that if you trade oil at chicage mercantile exchange you might end up with physical stuff that delivered to your back yard and you gonna pay the delivery fees. that is the reason that see traders pay someone to take the hot potatoes out of their hands as US run out of contango.
to me it's just technical issues. and it will force US shale to stop drilling in short term. that will get supply/demand back to reasonable ---kinda normal situation.

i smashed piggy bank to bought heaps more at CMC market at it cash traded under usd$8/00ish, now it back above usd$9ish. think it will pay me within two months time or even really short term.
i made sure that i have enough margins to hold it for two months no matter how low the price will go. just to make sure that i'm out of this trade with profit.

thanks for the info nipper!! i really do!!




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