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by winston » Sat Mar 04, 2023 9:41 am
Oil prices slumped on Friday after the Wall Street Journal (WSJ) reported that the United Arab Emirates had an internal debate about leaving the Organization of the Petroleum Exporting Countries and pumping more oil.
The UAE and Saudi Arabia are the two countries with significant spare capacity.
by behappyalways » Mon Mar 06, 2023 9:08 pm
by winston » Tue Mar 07, 2023 7:29 am
Saudi Aramco CEO Amin Nasser said, “A persistent underinvestment in oil upstream and even downstream is still there. The latest report from the IEA talks about a demand of 101.7 million barrels — going from 100 million barrels in 2022 to almost 2 million barrels more with China opening up and the aviation industry,” which hasn’t yet returned to pre-Covid levels.
The energy industry has been under-investing since the peak of 2014, with investments in traditional energy (oil, gas upstream) falling 61% from the peak and driving a 35% reduction in global primary energy investments, from US$1.3trn in 2014 to US$0.8trn in 2020.
A number of oil and gas project investment decisions have been delayed since 2014, translating into 3/10 mboe/d of lost LNG/oil production in 2024-25, on our estimates.
At the current cost of capital, we need $90-per-barrel oil prices in order to get enough capacity on stream.
Exxon reported that its break-even cost is around $41 a barrel.
by winston » Tue Mar 07, 2023 8:15 am
Natural gas prices have crashed nearly 80%. And oil dropped nearly 40%.
The COT has a history of being a powerful contrarian indicator. When traders are all betting that a commodity will fall, the opposite tends to happen.
That’s where we are in the oil market today. The COT for oil is near the most negative we’ve seen over the past decade.
by winston » Wed Mar 15, 2023 9:54 pm
iShares U.S. Energy ETF (NYSE: IYE)
by behappyalways » Fri Mar 17, 2023 11:13 am
by winston » Sun Mar 19, 2023 7:42 am
CBOE Crude Oil Volatility Index (OVX)
Based on the accuracy of this indicator, traders should be looking for higher oil prices over at least the next couple of weeks.
by winston » Mon Mar 20, 2023 2:06 pm
The oil price crash has been exacerbated by hedging activity–specifically, due to gamma hedging effects, with banks selling oil to manage their side of options as prices fall through the strike prices of oil producer put options and volatility increases.
The oil price crash is an overreaction to the banking crisis and that the selloff is overdone.
Most experts believe that the banking crisis is not systemic nor indicative of a looming financial crisis.
by winston » Thu Mar 23, 2023 5:28 pm
Oil price is going through some challenges with supply constraints and it is in backwardation phase, which is the spot price is higher than future price.
Demand is likely to hit 105 million barrel per day by December 2023.
Unscheduled production cuts and the US dollar depreciation.
by winston » Fri Mar 24, 2023 6:01 pm
U.S. Energy Secretary Jennifer Granholm said refilling the country's Strategic Petroleum Reserve (SPR) may take several years.
Continued crude supply from Russia to the global market was also weighing on oil which, together with a lingering anxiety about the banking sector, could push benchmarks to test their lows hit earlier this week.
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