So what happens to US Oil equities, from here on out?
With ships coming to the US, does that affect their pricing and earnings?
Do we think that these equities will continue to grow over the next few months? I find all of this very hard to understand, when futures and spot are not converging….
Posted by FlashandFire
4 Comments
Most companies have to hedge a large part of their production using futures so they can borrow money to explore. I prices stay up for a while they will be able to hedge at higher prices. Shale production is pretty expensive compared to production of liquid reservoirs. If you intent to invest, wait for a trump head fake to catch a better price. Depending on how much damage gets done to oil facilities in the gulf countries this might go on for a while.
Spot premium over futures reflects immediate supply risk. Producers get price support; refiners need right crude slate. Which segment are you actually positioned in?
The only people who believe this “next week, the digital price will reflect the physical price” nonsense are geologists, economists and other academic types with a. too much time on their hands b. no buy/sell orders on the book
Everyone else trusts the numbers in front of their face when they open IBKR, Schwab or Robin
You gotta keep it straight
In America we have the capacity to load at max, 3-4 ship per day.
So even if the “news” of tankers coming to America were true, our ability to do more doesn’t exist.