08
Jun

Wrap – Week Ended 06/07/19

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The blotter is updated. 

Questions and comments under The Wrap will be addressed in the Monday post. 

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7 Responses to “Wrap – Week Ended 06/07/19”

  1. 1
    gdr Says:

    good morning Z. thoughts about the forecast in this article?

    https://www.bloomberg.com/news/articles/2019-06-09/bulls-beware-the-2020-oil-market-is-quickly-turning-ugly

  2. 2
    Jerome Blank Says:

    A few P&F updates, this is for swing trading over 4-6 weeks, or longer:

    COG is solid , remains on a P&F buy signal, if already in it from lower great,  but right now it's not in the best spot to initiate longer timeframe,  longer term you would not be wrong in this until a break of $21, big stop from here.

    MGY is more actionable , remains on a buy signal, strong move on Friday, if a pullback to $11, buy, then protective stop at $10.49,  target $13 

  3. 3
    zman Says:

    re 1 – sure. 

    First, that's Javiar Blas.  He has long been bearish, almost no matter where oil prices are, he's an oil industry journo who is negative. 

    I don't think a lot of people seriously thought $100 was good for 2020.  No analysts that I know of were up there. 

    Not exactly a well sourced blanket type statement when you write "many forecast"

    We are watching rigs and completions. We don't see shale exploding higher again next year.  Balanced is more our view. No mention of lower prices on demand but they help and while OPEC call is down again this year it improved with last month's OPEC monthly.  I note he mentions IEA who is an emotional crew that swings from bearish to bullish in his comments on demand. I'd watch OPEC too, they have been historically more correct. We get them on Thursday as well. 

    Disagree on April demand for China.  For the US and Europe, sure but that's seasonal.  Watch it pick in May and more in June. 

    Nearly unanimous for 2020 being overly supplied.  Hmm.  The range is wide, the number of participants is small. Depends on how much shale growth is seen next year.  No mention also of Mexico, Brazil, North Sea.  I'm at $65 next year which supposes OPEC+ constraint (anyone who thinks Jan 1 2020 goes back to produce whatever you want isn't paying attention).  

     

     

  4. 4
    zman Says:

    "As far as Opec is concerned, "a rollover is almost in the bag," al-Falih told reporters while attending a business conference in St. Petersburg, Russia"

  5. 5
    zman Says:

    re 2 – thanks JB

  6. 6
    zman Says:

    Adding to 3 – story also appears bolstered by the recent price retreat.  We saw oil come off after longs got excessively strong.  Falih and Novak both noted oil drop not matching fundamental strength.  Recent Saudi price to Asia up (you don't do that when demand is weaker). Anyway, kind of one sided but that's normal there.   

  7. 7
    gdr Says:

    Z, Thanks for the detail.

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