Oh yeah I agree, but the question of market saturation aids bearish sentiment. As you stated above with the volume directed at puts or shorting or whatever, all in all, does control pride movement. I still think $40 holds as a reversal. The only hesitancy coming from our domestic market (USA) is the President wanting to keep prices lower. Market manipulation? Hasn’t been below that mark for a long time.
It’s Medium-Sour at best. Refiners equipped to handle that level of Sulphur are basically restricted to Japan, China, India - unless refiners blend it with lighter stocks beforehand. Just ‘sayin.
Stock market is up on Goldman earnings. Brent Crude is up modestly. WTI and distillates are down on record North American production and growing (fourth straight week) stockpiles of fuel distillates in the US markets.
Interesting tech development. https://www.reuters.com/article/us-...gn=Feed:+reuters/businessNews+(Business+News)
Unless WTI prices rocket to $80 plus, I don't see why investors are still considering buying Shale corporate bonds? The decline rates are significant. https://shaleprofile.com/2019/01/07/permian-update-through-september-2018/
US Shale has always been from the get go in the business of taking money not making money, and wall street was happy to participate due to amount of money being made by arranging the whole ordeal... Pension funds, Mutual funds and PE firms are gonna get hosed. Shale is a losing proposition from the start, in my opinion, the push for shale was more politically driven then financially driven, nobody " invests " mid to long term in US Shale bonds to make money, the money is made buying a ton of swaps on the bonds... Wonder who the next AIG is gonna be in 2019 ? https://oilprice.com/Energy/Energy-General/US-Shale-Has-A-Glaring-Problem.html The outlook came after years of mounting debt and negative cash flow. The IEA estimates that the U.S. shale industry generated cumulative negative free cash flow of over $200 billion between 2010 and 2014
https://www.theatlantic.com/busines...ke-money-for-nothing-like-wall-street/280825/ https://www.reuters.com/article/bah...eak-when-oil-cost-30-per-barrel-idUSL8N1TK310 Buy CDS on a bond, and then bribe the borrower to temporarily default. This is like taking out insurance on your neighbor's car and bribing him to get in an accident. You get the insurance, and then you kick some money back to him to upgrade his car. Sound far-fetched? It's not. It's essentially what a unit of the Blackstone Group did with the Spanish gaming operator, Codere SA. First, Blackstone bought insurance on Codere’s bonds, so it stood to make a nice bit of money if Codere missed an interest payment. But how do you make a company miss an interest payment? Well, Blackstone took over one of Codere's revolving loans, as a hostage, and told the gaming company: "We'll force you to pay back this entire revolving loan unless you kindly miss the next interest payment on your bonds." It was a clever ransom. And guess what? The clever ransom worked. The interest payment came late. Blackstone made $15.6 million from its CDS. And as for Codere, they turned out fine, too. Blackstone agreed to restructure its bonds, and reward the company for good behavior with another $48 million loan.
To drill down a bit further (Ha, pun intended) - there's a humongous amount of capital tied up in Oil and Nat Gas MLP's. Difference being, while MLP's are to an extent a commodity play, they do have some significant tax advantages and they typically have a yield since many collect tolling charges on pipelines, storage and other infrastructure (especially the midstream MLP's). But yes, WTI < $50 has problems for certain shale oil producers in the US.