Trinity Exploration & Pr... Share Discussion Threads

[spellbrook] 30/9/2018 08:35

Brent oil, the world standard, relentlessly climbed from a low of $30 per barrel early in 2016 to above $80 per barrel today. A year ago, when Brent was around $55 barrel, some pundits foresaw a return to the 2016 lows; others saw the price languishing in the $50-$60 per barrel range.

Bearish forecasts reflected a tepid outlook for the world economy and expectations of fracking on an ever-larger scale coupled with new finds from deep-water drilling. Few observers reckoned that Brent might again exceed $100 per barrel, as it did between 2011 and 2014, or even reach $80.

Several factors combined to upset these bearish forecasts. On the demand side, massive tax cuts, taking effect in 2018, sparked the U.S. economy with global spillovers. Meanwhile, easy monetary policy in all advanced countries further promoted global growth.

On the supply side, the fracking rig count dropped dramatically when oil prices plunged in 2015 and has recovered only slowly since then. Fracking makes a much larger contribution to natural gas than to oil supply.

U.S. oil production continues to grow, but at a modest pace. Meanwhile, the major oil producers have been cautious about betting $3 billion or more on deep-water drilling off the coast of Brazil or Africa.

President Trump’s renewed sanctions may reduce Iranian oil exports by as much as 1 million barrels a day as European buyers reluctantly cut their purchases. This shock gives Russia and Saudi Arabia even stronger control of world oil supply.

In June 2018, the duopolists agreed to increase oil production by 1 million barrels a day to ensure “stability” in world oil markets. But “stability” has different meanings to oil consumers and oil producers.

Producers almost always want higher oil prices, but they also want to deflect the political backlash that accompanies higher prices. The result is doublespeak press briefings — phony calls for “stability” and talk of larger output, while quietly reaching agreement on supply limitations that will drive Brent higher.

Make no mistake: Higher oil prices bring joy to multiple influential actors. Russia and Saudi Arabia, obviously, but also Texas, Oklahoma and other energy states, plus all the conventional oil and fracking firms.

Even Iran has reason to be happy: Its oil exports will perhaps be cut from 3 million to 2 million barrels per day, but the 50-percent rise in Brent means that Iran is just as well off financially.

Not to be forgotten in the joy club are renewable energy producers — solar and wind — along with environmentalists who see carbon emissions as humanity’s biggest threat.

Now that Brent has topped $80 per barrel and West Texas Intermediate (WTI) exceeds $70 per barrel, what credible counterforces can keep Brent from topping $90?

In his U.N. speech on Tuesday, President Trump denounced the Organization of Petroleum Exporting Countries (OPEC) for “ripping off the rest of the world." Other U.S. presidents and Western political leaders have harbored similar thoughts, without such vivid expression.

But oral denunciation counts for little against the self-interest of oil producers and their allies. If the U.S. is serious about arresting the further rise of oil prices, it must either take the lead in curbing demand (higher gas taxes) or enhancing supply (releases from the Strategic Petroleum Reserve).

Since neither action is likely, the upward march of Brent seems a better bet.

Gary Clyde Hufbauer is a nonresident senior fellow at the Peterson Institute of International Economics.

[nafafa] 28/9/2018 23:20

UKOG may well multibag, if it does get out quick as before you know it, it will be back where it started. It’s a Leningras company as is LGO, now Columbas

[spellbrook] 28/9/2018 16:55

oil having a push north $73+

[che7win] 28/9/2018 14:38

Oil squeezing up.

[dunderheed] 27/9/2018 12:07

Deano I was being sarcastic, Lol but, thanks anyway.

[deanroberthunt] 27/9/2018 11:48

..BE CAREFUL IT'S TOXIC

[dunderheed] 27/9/2018 11:21

Thanks Stephen I've never ever heard of that company.
I'll go and 'check' it out buddy.

[stephen2010] 27/9/2018 10:59

Check out UKOG Extended flow test about to start anyday now on the Kimerage zones which flowed at over 1300 bopd agregate in 2016 on the short term flow test. Also official declaration of commerciality to be announced anyday, on the recently sucessful flow test of the portland zone, on their Horse Hill descovery well.
About to re-rate so be quick. Fully funded into 2019. Huge huge upside! DYOY :)

[hcminpastry] 27/9/2018 10:57

lol @ dean

[marvelman] 27/9/2018 09:18

Your not alone in that view DH

[dunderheed] 27/9/2018 09:15

Well mate I've actually been 'here' a very long time holding a small amount to make sure kept on my watch list.
I bought a few post placing and am in profit but unfortunately there do seem to be a lot of other excellent companies at the moment and I am disappointed so far in the share price response to prospects here, so am treading water at the moment but could sell out quite quickly tbh?

[marvelman] 27/9/2018 09:11

No DH...I thought you had sold and had bought back in...pleased you are still around

[dunderheed] 27/9/2018 09:04

Mate I've never been out?!
It's you're by the way as well or, are you querying something abut my back being 'in'?

[marvelman] 27/9/2018 09:04

DH...Your back in?

[dunderheed] 27/9/2018 09:03

Yes and there was me getting a little 'excited' that the share price may actually rise from that! Bloody tired I am, me.

[spellbrook] 27/9/2018 09:02

Lovely 1 hour volume

[dunderheed] 27/9/2018 08:41

Do u want to join us?

[wwick] 27/9/2018 08:33

Get a room

[dunderheed] 27/9/2018 08:16

That's really really lovely, thanks deano.

[deanroberthunt] 27/9/2018 08:14

Starry, starry night
Paint your palette blue and gray
Look out on a summer's day
With eyes that know the darkness in my soul
Shadows on the hills
Sketch the trees and the daffodils
Catch the breeze and the winter chills
In colors on the snowy linen land