Wrap – Week Ended 04/10/20



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


The Blotter is updated (one new trade last week).


10 Responses to “Wrap – Week Ended 04/10/20”

  1. 1
    zman Says:

    OPEC+ to cut 9.7M per day for two months (May, June).

  2. 2
    Baylor Says:

    That seems underwhelming

  3. 3
    Baylor Says:

    I guess better than nothing but would still expect massive bankruptcies likey

  4. 4
    brodway Says:

    re: 3

    and not only in the oil space. there are many vulnerable industries

  5. 5
    Baylor Says:

    Re 4 agreed

    The OPEC deal is however setting up an epic opportunity to reload on the short DGAZ or long UGAZ trade over the next few weeks

    In the meantime I’m selling massive amounts of puts in SPY and TSLA with short durations to recoup these losses

  6. 6
    Baylor Says:

    JP Morgan announces effective Tuesday any new moreltgages require a minimum 700 FICO score and 20% DOWN

    Wow. Stuff getting real. SPY probably up 120 tomorrow

  7. 7
    zman Says:

    re 3 – not our names.

  8. 8
    zman Says:

    re 2 – it will need to be extended.

  9. 9
    zman Says:

    From tomorrow’s post:

    OPEC++ Watch:

    OPEC+ arrives at 9.7 mm bopd cut for May and June,
    This is from a October 2018 baseline and therefore 12.4 mm bopd cut from April levels (Saudi, UAE, Kuwait were surging in April),
    Russia said to be 2 mm bopd of this.

    There is also a 2 mm bopd over compliance measure to be taken on by Saudi, UAE and Kuwait,

    And is only a 7.2 mm bopd cut from 1Q20 levels.

    Sticking point on the deal was Mexico which eventually agreed to only 0.1 mm bopd from a requested 0.4 mm bopd (with the U.S. said to be making up 0.3 mm bopd for Mexico in addition to a further reduction by the U.S. as part of the “other non OPEC below).

    As noted on Friday, OPEC+ cuts scale back to 8 mm bopd from July to December and then to 6 mm bopd in January 2021 until April 2022.

    OPEC+ meets again in June 2020.

    Other non OPEC members, not part of the official non OPEC group including the U.S., Canada, and Brazil as part of the G20 meetings, maybe committing to production reductions, not direct cuts, of 3.7 mm bopd. 
    Trump was said to be heavily involved on Sunday.

    Canada said it is committed to helping achieve oil market stability.

    IEA and the U.S. plan SPR buys to help reduce commercial storage.

    This will not be enough to meet the demand destruction of April or May or likely of June but that last remains to be seen given we simply don’t know when things really open back up. What it does do is slow the inventory builds beginning in May (it buys time).

    Saudi has delayed the announcement of its Official Selling Prices for May 4 times and plans to announce them today.

  10. 10
    zman Says:

    Oil lifting after a post deal bounce and dip.


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