Looks at the segment profit/loss. Primarily Canada and L48. The only got about $23/BOE for the quarter verse (36/BOE in 1st qtr, 2015).
The need to divest the NG assets. The will not return to profitability until NG price increases significantly and/or they sell off those NG assets.
Until the Saudi's and Iran reach some type of working agreement crude prices will not recover.
See what the Saudi's said today regarding increasing their own producion up to another 1MM bbls/day at "any chance". This was in reference to Iran's goal of increasing another 800K bbl/day.
Looks like the next change for any agreement will the regular Jun meeting.
Likely be a lot of collateral damage in the global O& sector (Including more US frackers) until they work something out. If we break 35/bbl likely new low coming.
Imports were down quite a bit last week, if they rebounded to where they were before last week we will have a EIA build.
The API is not nearly as good indicator of inventory due to the global supply glut and imports.
I suggest holding off the Jan 18 contracts if you think crude is going lower short term. Wait and buy the contracts for a pullback (I recommend less than about 35/bbl (wti) and ideally 30/bbl or lower.
We could be in the lower -mid 40s for a long time so the current risk/reward on the Jan18 calls is fairly weak.
That's too bad, I think we were within a month or two of a bottom in oil. Now we will see another big sell-off and likely extend into the 2nd half of the year maybe 2017 with a slow recovery. And more job cuts in the O&G sector with the extended slump. The "freeze meeting" is nonsense. The fundamentals are still not there to support a 40/bbl price.
Federal reserve is partially to blame with their decision the other day. That just added fuel to the fire.
L48 production down 20K bbl/day, and refinery imports up a little with draws on gasoline and diesel
However, the biggest affect on inventories looks like a 355k/day drop in imports..
Its still a long grind (800K/day +) in production to get where it needs to be to get balance let alone burn off inventories. Looking les and less like latter half of the year amore like 2017 for a global balance..
If we see a flat or rising L48 production this week that will likely cause a major sell-off since that will be 2 weeks in a row (after 4 weeks of falling production). Growth in inventory growth is expected because of seasonal maintenance and/or imports.
So following up on the Forbes article last week on central bank's buying oil to fight deflation, from another article today on iron ore on Bloomberg, it looks like they are also buying metals.
While this provides short term support, this will distort the flow of capital and cause much longer term damage in the commodity markets.
This is a very dangerous game with huge risks for world markets
If this effort collapses at some point (and they are likely betting they can "engineer" the markets out of this), there could be a catastrophic drop in all commodity prices very quickly.
You feel that way because nothing has changed yet with regard to why oil prices crashed to justify a recovery.
says BOJ and ECB have been buying oil heavily to avoid deflation driving the price. This raises the risk of a catastrophic sell off aty some point on storage capacity limits. There is no free lunch.
Hope they are wrong for this year, we likely need about double that (10%) before the Saudi's will back off. We dropped 100k+ in February so, looking at fall likely for a OPEC production cut fi the trend continues. If not this drags into 2017.
That's a joke even if they get Iran to agree somehow (like agreeing it goes into 6 months or later from now) . Saudi's are pumping at a record rate so, sure they will agree not to raise output further.
So, OPEC is going to get together and agree we will continue to "oversupply" the market for the forseeable future.
It just prolongs the suffering for the industry by artificially raising prices on a short term basis, its nonsense.
If it happens buy puts.
L48 crude production down 30K for the week that's 110K for February (EIA finally had a prediction come true). Shor term, this is not as important simply because of the flood of global supply.
Inventories did not primarily more simply because imports fell off -117K bbls/day.
Refined product inventories still significantly above last year.
Interesting to see over the next couple of weeks as maintenance season winds down if the refineries ramp back up with all the produce already in storage..
PMI report today indicates a weakening US economy and oil demand at least in the short term.