>Past earnings reports (alphabetical) ASC: EST EPS $0.14, actual $0.20. DHT: EST EPS $0.54, actual is $0.44 (divvy of $0.35). EURN: EST EPS $0.86, actual $1.05 (divvy of $1.10). INSW: EST EPS $1.45, actual $1.49. NNA: EST EPS $0.00, actual $0.94. OSG: EST EPS N/A (Q4, 2019 was $0.12)., actual $0.28. STNG: EST EPS $0.49, actual $0.82.
> Upcoming earnings reports calendar NAT on 5/18, not specified SFL on 5/19, pre-market TNK on 5/21, pre-market FRO on 5/29, pre-market TNP on 6/4, pre-market
>Another important date May 19th, 2020 (you know why) Keep an eye on the 14th, 15th, and 18th of May too.
What if the supply cuts worked anons. What if they got enough storage on land and the demand destruction from corona is too great causing rates to crater...
Only thing going for us is theres huge incentive to cheat on OPEC cuts and increasing price of WTI means more production
Kayden Watson
We'll have to wait until May 19th to see the real impact. I still don't think they'll be handle to manage this oversupply.
Christopher Cooper
they didn't. Refineries can't handle all this crude, the lag time on production cuts is too much. This entire oil rally is fueled by hopium, there will be a tumble. They still have 86 million barrels to close by Tuesday, even if they manage to get it down to 20 million barrels no one is taking that delivery.
Alexander Davis
I hope so. Then uso still needs to roll contracts which will depress price. But after that I might be out of these seas depending on what spot rates look like.
Ryder Harris
Just imagine if all the bag holders this month are new money who believe they got in at the bottom and anyone who actually CAN take delivery got out so they could wait to get paid to take oil from the morons who all piled in this month...
And if sellers decide to take advantage of prices that won't come again for quite a while so a huge amount of them insist on fulfilling the contracts...
Josiah Johnson
Futures traders aren't that stupid, if you are trading a commodity you probably have a lot of knowledge on it or at least know what you're doing. Last month was a direct result of the USO pile in. (almost 80 million barrels more worth of contracts existed before expiration)
The general consensus is that everyone tried shorting the June contracts which led to a squeeze and a loss for money shorts.
Regardless, there are still tons of positions to close and nobody is accounting the OPEC and gasoline consumption lag time . Everyone thinks that they can just cut all the oil they're producing and that's that, which just isn't the case. There are so many different forces that should be driving price lower, I just don't understand how the market is handling it.
I know that something has to change this week, I'm just not sure what it is. Under garden variety conditions we see a drop in oil prices, however this market is anything but normal. Maybe it's a huge rollover and July prices get supressed into infinity? Contango 2?
Jaxson Thomas
You think they'll just kick the can down the road? Would that even work? If a supplier has a contract that says almost $30 on it can't they just say YOU'RE TAKING THIS SHIT.
Kayden Rodriguez
Looks like a lot of open interest at this point. If even 10% of this gets filled that's 5m barrels with nowhere to put it.
Always conflicting reports in this sector, you just have to look at all information and make up your own mind. Long tankers for me.
Leo Ross
Why long? They’re not exactly a growth industry and I don’t have enough money to make dividends worthwhile. Should I just get out and move on?
Nicholas Brown
I'd wait until june to see what happens. May 19th will help make things more clear. These tankers are going to have better earning q2 and some already confirmed q3.
Andrew Garcia
If May 19 is no help wouldn’t I just lose more money from another sell off? Earnings didn’t do anything last time and it was already known Q2 would be fantastic.
Zachary Powell
I like how they have an artificial bottom in their prices due to the age of tanker fleets reaching a critical point post 2020 where if rates drop below a profitable point, the upkeep for old tankers becomes too costly and tankers start getting scrapped. Essentially, supply destruction in an already tight market that's not going anywhere. Supply creation as well takes forever and this imbalance can choke rates at a high level until supply very slowly returns. Whatever happens in the long run, we'll still need to export oil around the world for the next 20 years; Tankers are not inverse oil in a Long position.
The increasing trade war tension and possibility of Cosco sanctions has me licking my lips. It caused a massive spike in rates and valuations last year. I also like how much debt has been payed down due to current oil situation's cashflow. World goes to shit, tankers have a shield from insolvency.
I'm holding until June then will re-evaluate, if things don't look good I'll sell off half my position but go long EURN and STNG for at a 1-2 year hold. I'm confident I'll at least have multiple chances to sell at profit, but it's a patience game. Divs make the waiting easier. I like that if in theory these companies scrapped and sold eveything, I still get paid.
James Thomas
HOLD ON SEA CAT
>People argue oil stays up due to high demand >people argue oil stays up due to low demand and supply cuts They need to pick one narrative please, people can't argue oil price should be higher due to demand while also arguing it should be higher due to supply cuts and low demand.
That is the thing though, this is about taking delivery right now. Who CAN take delivery for millions of 30 dollar a barrel oil this week? Who? because I sure as shit have no idea.
Holy moly. Remember, May's open interest that drove the price to negative 47....was 3500 going into the final day. Do we REALLY think that on Monday 50k+ orders are going to be filled and paid for at 30 DOLLARS A BARREL?! Either there is something enormous everyone is missing, or this will be a crash like we have never seen.
This article is really bad news on all fronts including storage and consumption.
Daniel Price
Not subscribing to read it all, but again, pick a narrative. People either have to argue for demand destruction, or for demand. For demand, you run into issues with storage as refineries are full and Cushing WOULD be full if they accepted the Saudi oil tanker deliveries already (which they are first in queue btw compared to anyone buying oil on the market, meaning storage is full right now even if demand outstrips supply and it is because of unaccepted oil deliveries....and it would be a very bad surprise for anyone buying oil on the market to find that out. If oil demand is high though...what oil is used first you think, newly bought, or stored up? Stored up. And if storage is full....the oil is worthless despite high demand. Furthermore in the future this causes backwardation which increases production as everything starts up to full making a ton of money which leads to oversupply again and a second contango, high volatility in supply and demand. If demand stays low on the other hand...well, price needs to go lower regardless but we might not have backwardation into continuing volatility. Oil would be stable in its badness rather than negative 100 one week and over 100 another.
Also in regards to your other comments, tankers are particularly attractive if you are a value investor. It isn't that they will "grow" (though they will in the sense of huge profits which some companies, such as DHT, will return 60%+ of to shareholders as policy), but the fact they are undervalued. Look at STNG. STNG is trading below 17, yet if it dissolved and sold all its assets shareholders would be entitled to over 32 dollars per share. A company making over 800% profits over the norm, rapidly deleveraging estimated 40% in Q2, and half the value of if it literally disappeared? Sign me up, market sentiment be damned. Price will correct eventually, will hold until it does for easy x2+.
eh article is mostly shit we already know. Most relevant concrete facts are:
Last week, U.S. crude inventories declined for the first time in nearly three months, falling by 745,000 barrels, the U.S. Energy Information Administration said. The tally compared with expectations of a 4.1-million-barrel rise.
and
In April, the Saudi-led Organization of the Petroleum Exporting Countries and 10 nations led by Russia agreed to collective production cuts of 9.7 million barrels a day to rebalance the oil market and mop up a swelling oversupply that threatened to overwhelm global storage capacity. The pact went into effect on May 1.
Saudi Arabia, the world’s largest oil exporter, has since accelerated its own efforts by curbing output to its lowest in almost two decades. The kingdom said this week that it would slash production this month to about 7.5 million barrels a day—1 million daily barrels less than it agreed to cut as part of the agreement.
The rest of the article is muh sentiment muh increased demand d/t people driving more and economy reopening
Zachary Lewis
Do you have full text? Here's a conflicting article.
Here you go friend, it’s worth a read. It addresses most of your points including storage, demand, saudi arabia.
Jace Scott
see
Wyatt Ramirez
Ty user, perhaps you'll have to spell this out for me, but I don't see how the article addresses the logistical aspects of that he was trying to make. Can you explain this?
As well, these cuts aren't as relevant for may as much as June, as 30 Saudi tankers are still crossing the ocean already. Point to where I'm mistaken if possible.
Also, the Wuhan data is extremely misleading in the article and has me questioning it's validity as a whole, as this is an area I do understand. Mass transportation is down, but overall transportation is down as seen here. tomtom.com/en_gb/traffic-index/wuhan-traffic/
Rushhour vehicular transport is up, but overall transit has flatlined in between. This is because China has mandated work start again, but consumer behavior pattern remains very conservative, as highlighted by inbetween rushhour traffic, and as well Saturday and Sunday traffic being non existant. Remember, China exited lockdowns at least a month ahead of USA as well, so we can use this data to predict USA oil demand in the gasoline front will remain low. Pic related.
Pretty disappointed in WSJ for making that misleading point, it's a publication I trust usually.
Eh, I actually wouldn't be surprised if OI drops to 10k on Sunday then to 3k on Monday, as we know Trump would do anything to save the oil market, and scooping up a couple thousand barrels into the SPR wouldn't hurt too bad.
Also, does anyone have historical OI for the May contracts? That may give us some perspective to the bigger picture.
Henry Cook
The point is that traffic has increased compared to the feb/march/april situation where it was at the lowest. Coupled with the drastic oil cuts outlined in the article means that supply and demand are scaling to a point where things aren’t deadlocked. No one is arguing we’re peak demand but that it’s increasing and will continue to do so and it’s reflected in prices.
Dylan Davis
Um. 3k would be 3MILLION barrels, not 3,000 lol
Right now there's something like 60,000,000 in OI.
Jace Morgan
>Futures traders aren't that stupid Explain how we went negative in the first place.
They may not be that stupid but they sure as hell are that greedy and that's how things got fucked in the first place.
And all the oil producers are greedy as hell too and they all started right back up as soon as oil went to $25.
Jace Anderson
But ofc that's the truth and nobody would argue against that, but it's incredibly misleading to say
>Chinese consumers also appear to be avoiding mass transportation. On Thursday morning, Wuhan, the original epicenter of the coronavirus outbreak, had traffic congestion rates of 54%, compared with an average of 42% last year. In Beijing, congestion was 73%, versus 62% last year, according to Dutch location technology firm TomTom International BV.
It's pointing at only the points in the chart that reinforce their argument without mentioning that the overall chart doesn't support that argument. A nuanced point can be fairly made with reference to the overall chart pattern, but no such point has been made. It's like looking at a chart of BTC and only looking at it's peaks; it tells you a part of the story but without the rest of the data being acknowledged it's not only not useful but incredibly misleading.
Colton Miller
I understand 1 contract is equal to 1,000 barrels of crude oil.
Obviously I wasn't being precise enough, to rephrase, I wouldn't be surprised if Donald scooped up *a couple million barrels (40 million to be exact)* into the SPR, and the rest went to exports, leaving the open interest for crude at 10k or so..
Carson Davis
Negative oil prices were a direct result of UCO and USO buying up front month contracts and rolling them over. Look at the difference between May contracts and June contracts on this graph.
