Shell Share Discussion Threads

[sogoesit] 22/3/2020 09:28

Oil gluts can last a long time.
I worked for 15 years at between $10 and $20 per bbl.
And that was post-OPEC managed (1975 onwards).

As ever, the lowest marginal cost of production producer, given swingability, calls the shots.

[bennodean] 22/3/2020 09:09

He would be better building another 50 strategic oil reserves at prices down here.

Long term it'll go back to 200 dollars on a spike!

[spud] 21/3/2020 20:39

The COVID-19 pandemic has shaken energy markets to the core this year, creating incredible volatility for fuel prices. The one energy source that hasn't blinked though is coal, a fuel that may come out stronger through the current crisis, a Rystad Energy analysis shows.The price of coal was already depressed before the corona virus crisis, and the demand curtailment in China during the lockdowns was accompanied by a domestic production drop, balancing the market. Oil, which is used as a fuel in coal mining, has grown cheaper and is seen by Rystad Energy as reducing coal output costs by a few dollars per ton.spud

[poikka] 21/3/2020 11:06

Interesting comment to add.

"Crude prices have more than halved since January and are now trading around $30 a barrel, a level analysts say will lead to a sharp contraction in US supply and trigger bankruptcies across the shale patch. It will also cause widespread pain in Opec producer economies."

I guess that we all knew that, anyway.

Then there's the opinion that the demand shock caused by the virus containment actions would be (should that be "could be") too great for falls in production to counter.

Personally, I'm floundering amidst all the opinions and scenarios.

My thoughts, fwiw:

1. Production cuts will occur as wells get shut in, and/or their producers go bust.
2. OPEC could reach an agreement.
3. US strategic reserves buying takes up some production.
4. News that demand shock would be too great to be affected by production cuts, might be incorrect.
5. Low oil price leads to increased use my motorists, countered by lock-ins
6. Stock-piling by speculators and governments will occur.
7. When the virus counter-measures end, there'll be an increase in demand.

I feel non the wiser..../:

[adg] 21/3/2020 10:58

Any thoughts on real situation in Russia?
They report a relevantly tiny number of cases year have thousands of miles if borders with infected countries...
Just shows how unreliable the data can be - I would guess they have ten or even a hundredfold what they are reporting.
I know Kazakhstan is getting bad - we have an office there

[watfordhornet] 21/3/2020 10:43

I am with you and think we will pick up for quite a bit cheaper which in long run is good. Cannot see Putin rolling over too quickly

[poikka] 21/3/2020 10:43

$5/bbl...I'm no expert, but I'd have thought one helluva lot of production would have been shut down long before that was reached. But, as said, I'm no expert.

What is this, a chase for media headlines?

[spud] 21/3/2020 10:35

I'm buying this all the way down below 10 quid to 50p if necessary. I may get a few knife cuts in the process but am 99% sure that in time I'll have some nice scars to remind me where all that loot came from...spud

[whiskeyinthejar] 21/3/2020 09:12

It's not very accurate is it. You get increase of deaths in a given week and they just point and say, that was flu, that was.

But they want to encourage flu vaccine uptake of course.

“When the number of all-cause death registrations rises above an ‘expected’ level in a given week, this excess is counted” Sir Liam explained. “The estimates for the last five years in England & Wales are: 1,965 (2004-05 winter season); 0 (2005-06); 0 (2006-07); 426 (2007-08) and 10,351 (2008-08).”



That’s an average of around 2,500 a year. But the excess is due to all causes of death, so cannot be directly attributed to influenza, yet that's exactly what they do.

[patientcapital] 21/3/2020 08:39

Yesterday from oil price.com:"Citi: $5 oil is possible. Citigroup laid out a pessimistic scenario in which WTI falls to $5 per barrel. Energy Aspects said Brent could fall to $10. Mizuho Securities said some oil could even fall into negative territory absent shale shut-ins. "This is Operation Desert Storm, Enron, 9/11, Hurricane Katrina/Rita, Lehman Bros, combined," Stephen Schork, president of the energy consultancy Schork Group Inc., told Bloomberg."

[poikka] 21/3/2020 08:24

Some sanity, from the BBC - amazingly:

"The figures for coronavirus are eye-watering. But what is not clear - because the modellers did not map this - is to what extent the deaths would have happened without coronavirus.

Given that the old and frail are the most vulnerable, would these people be dying anyway?

Every year more than 500,000 people die in England and Wales: factor in Scotland and Northern Ireland, and the figure tops 600,000.

The coronavirus deaths will NOT be on top of this. Many would be within this "normal" number of expected deaths. In short, they would have died anyway.

It was a point conceded by Sir Patrick at a press conference on Thursday when he said there would be "some overlap" between coronavirus deaths and expected deaths - he just did not know how much of an overlap.

The flu comparison

In contrast, the figure he gave for flu deaths to MPs - 8,000 - is different. It is actually the number of deaths over and above what you would expect to happen in any given year.

Many more die with flu, but the figure gives you an indication of how many more die because of flu, whereas the 20,000, 250,000 and 500,000 figures for coronavirus are simply the number of deaths linked to coronavirus.

The testing which has been done in many countries means we know when a patient dies with the virus inside their body. What it does not tell us is to what extent coronavirus contributed to the death.

The modellers are underestimating the ability of the NHS to increase intensive care facilities."

[poikka] 21/3/2020 08:21

Earlier - "Russian President Vladimir Putin will refuse to submit to what the Kremlin sees as oil blackmail from Saudi Arabia, signaling the price war that’s roiling global energy markets will continue."

That's just posturing, what is important is to consider what is most likely to happen.

FJG's, and others', postings indicate the real situation, that feelers are going out to get the posturers around the table/video link without anyone losing face.

[bennodean] 21/3/2020 07:26

I was thinking it will start with a £5 at some point.

Another bag off the DOW Monday I would of thought with rate of deterioration in the US ...

[pvi1] 21/3/2020 06:42

I think you'll get £6 if you wait

[swanvesta] 20/3/2020 23:35

@xxxxxy

Do you ever stop to think how flu numbers get to be as high as 36m? It starts with a single infection, of a virus that is either novel or has learned to elude the herd's existing immunity. In a couple of months it'll have spread to 10,000. In a couple more months to 10,000 x 10,000. Where do you think we'll be in a couple of months if we do nothing? This particular mutation is nasty - wake up!

"So far, the new coronavirus has led to more than 220,000 illnesses and more than 9,300 deaths worldwide. But that's nothing compared with the flu, also called influenza. In the U.S. alone, the flu has caused an estimated 36 million illnesses, 370,000 hospitalizations and 22,000 deaths this season, according to the Centers for Disease Control and Prevention (CDC)." We really do need to get this in context."

[fjgooner] 20/3/2020 23:07

Further:



OPEC to continue talks on oil issue with US regulator

OPEC Secretary General Mohammad Barkindo held telephone talks with the Texas Railroad Commission

MOSCOW, March 20. /TASS/. OPEC Secretary General Mohammad Barkindo held telephone talks with the Texas Railroad Commission late on Friday, March 20, a source in the secretariat told TASS, adding that the sides agreed to continue consultations. Later the commissioner Ryan Sitton confirmed the information via Twitter.

"A telephone conference with US colleagues just ended. A successful conversation, very fruitful. Agreed to continue," the source said, adding no details.

The sides discussed global supply and demand, Sitton said. "We all agree an international deal must get done to ensure economic stability as we recover from COVID-19," he wrote on Twitter.

Barkindo invited Sitton to the next OPEC meeting in June in Vienna, he added.

The Wall Street Journal wrote earlier that Texas, the largest US state in terms of oil production, is considering the option of crude output reduction amid falling oil prices. Texas has not cut production since the 1970s.

[watfordhornet] 20/3/2020 22:37

Surely better to cut than have a price like this?

[loganair] 20/3/2020 21:21

Opec will be asking the US to cut its oil production by 1mln barrels per day.

Easy for Saudi's and Russians however difficult in the US as they'll be asking many small private oil producers to cut production...the question being....will they be will to do this?

[fjgooner] 20/3/2020 21:05

Breaking: OPEC secretary general invites Texas Railroad Commissioner Ryan Sitton to Vienna meeting.

[spud] 20/3/2020 20:38

Yikes (and godzookes)Citi: $5 oil is possible. Citigroup laid out a pessimistic scenario in which WTI falls to $5 per barrel. Energy Aspects said Brent could fall to $10. Mizuho Securities said some oil could even fall into negative territory absent shale shut-ins. "This is Operation Desert Storm, Enron, 9/11, Hurricane Katrina/Rita, Lehman Bros, combined," Stephen Schork, president of the energy consultancy Schork Group Inc., told Bloomberg. spud

[spud] 20/3/2020 20:35

Maybe I'll get my 850p limit after all!spudPs. Make the most of the short term pain buying opportunities - It won't last forever.