Oil to $100
UPDATE: Pulling the plug at $79BRENT
Lol our firm just yeeted money at oil commodities. What do you guys think? Should we bail the position right now? We are at 7% profit. Some IB partnering firms are telling us that their "research" aka under-the-table team has source on min $80 a barrel for Brent & Crude.
I work on a crude oil trading desk, and the general consensus is WTI will hit $80. This is due to companies paying down debt rather than drilling. The breakeven price to meet the demand for WTI is ~$60. So I’d expect the price in a few years to be $60, but the hard question is what happens in-between.
What's your timestamp and estimates range to be for the next month assume I renew our position status by today?
I like to avoid sharing proprietary information on the internet.
However, I'm worried that you work for a firm that will yeet money. Maybe focus on building a more robust process than worrying about price action over the next few weeks.
Sell 85c WTI prompt.
Sell 95c WTI 2x prompt.
Buy 110c WTI 4X prompt.
If you can get enough liquidity and size. Just my two cents...
Let’s get it brother
This did not age well
Dance the black gold jig and watch the paper stack boys
We did it
O&G boys all wearing new cowboy boots down in Houston now
As a investor in energy equities you do not want $100 Oil. You need to watch debt ratios and capex. Likewise think we will head towards $80 in the back years, the backwardation has been very strong the last couple months.
Could you elaborate on the effect $100 oil would have on energy equities? It seems like the rise from $40-$60 was positive for them, what is it about a further rise that would have the opposite effect?
Not sure what you’re getting at. I don’t see how 100$ oil is anything but bad. Are you rather suggesting energy equity valuations are currently driven by debt redux and FCF generation (ie low capex)?
Gone are the days that Energy companies will lead the economy. $100 will speed up energy transition and lead to “political uncertainty”. Oil prices in the last 2-3 years have not been led by fundamentals lots of excess barrels and plays out there.
The reason a vast amount of these firms are not anywhere near their former equity valuations is that they are still majorly debt ridden and demand destruction is coming. Most of the European majors already left the space.
Pioneer is the best example follow what their CEO vs banks/rds/exonn/bp have said…the producers in for long haul (not energy transition) players dont want a price shock.
We did it Patrick
This aged poorly.
Say again
150 by Q2 end?
Dance to the black gold jig and watch the paper stack v2.0 boys
haha alot changed between June2021 and now. I personally turned bullish oil in late q4 and a lot of current price raise has been in part due to "geopolitics". I still say that $100 is great but the debt ratios are the key thing to watch the market should keep awarding the equities who debt wise are doing the best thing.
The issue now is that the incoming metals/ags (food) crisis and inflation should make oil pricey for the future. PXD CEO has said it best, $100 or $150 we won't drill like mad, possibly lack of Russian oil in the market for "western stability" we will start to drill again. Let's hope they keep to that mentality.
are you worried about demand destruction -> recession?
That is for sure becoming a concern as the war is getting worse and blooder. But majority of the “independent” producers are running $60-$70 WTI decks and promising anything above is returned to shareholders. The long-term under investment is a major concern so I think recessions bring more “volatility” like “wars” but the risk of these firms falling into massive debt traps is minimal. Now again if they overspend too truly that changes.
What is going to be interesting to see is whether Russian energy is sanctioned or not. Right now we are feeling the effect of the war without the energy sanctions. However, if Russian aggression continues and the taps are turned off that will send the prices soaring faster. LNG has already spiked and Brent is just going up. With all oil majors except Total pulling out of Russian JVs right now it is going to be a long term uncertainty on the supply side. Also with demand coming back across the world is sending the prices soaring. Russia will also want high oil prices to finance this war.
It’s not sanctioned explicitly as of yet, but people are shunning it for fear it could be in the future which leads to difficulty of obtaining credit to buy the cargo. If it’s disrupted in any meaningful form (which is currently looking like the case) it will be a huge shock to global oil supplies.
RDS just bucked the trend let's wait and see what happens into next week. The physical market does not look super tight for now, but again it should not be tight this time of year. The current "s/d" looks unsustainable so as you mention it seems it going to get worse even later on and the futures market is trying its best to keep up with those scenarios.
As for European Gas, its just trading a war scenario at this point you cant disagree with the price with the backs are moving there.
Fuel Markets are looking tight in certain smaller ports in Europe especially in the Meds. As for Gas do you think the US will be able to meet European demand for the coming Winter provided the war last over the summer and Europe refuses Russian Gas? Think that is going to be critical to for how long Europe can hold out.
Also with Brent today at 128/BBL and looking to go higher what do you think about inflation? This is purely speculation but do you think we might head into a recession?
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