Rig Counts in North Dokota keep falling. They are almost below the estimated levels which are required to maintain current production levels.
I’m hedging as best I can about 60% of my energy exposure, hedging way more than before. Just worried this might hit zero on a few of my small caps. Thankfully the dividends are paying for the puts to some extent but still unfortunate. Its always sad when your hedge is nearly worth the same as your position. Which is true on one junior I have. I’m still a believer but I’m not going to leave myself completely exposed either. This will come back, but maybe not tomorrow, you know what I mean. Until then, the dividends pay for my protection and I carry on.
I took a small position in XOP today and added a bit to a long held position in AMU. I plan on DCAing as things shake out a bit.
Interesting strategy geo. Txs for sharing.
yea sum will def flop. Flight to quality, cuz #m&awillsavetheday
DP, mea culpa.
Care to share which ticker this is (can PM if you’d like)? Could be interesting.
Anyone of these supply side advocates able to explain why WTI/Brent gap is so narrow if its a shale supply bubble?
Definitely an odd situation, since it should be a transport differential at the very least. The greater fall of brent to me speaks to worries about overseas demand since WTI (US oil) can’t be exported. Very rudimentary thoughts, but there are so many moving pieces here.
…actually smart enough not to put money on the line; losing less than the index is over-performance. 
* Purealpha YTD, +0.4% * S&P500 YTD, -2.3% Well guys, this schizo US market continues; oil trending slightly up yesterday afternoon and the market getting all excited over nothing, now stock futures up/down/sideways in confusion but currently back down. I cashed out all my US equities earlier in the week and feel great about being out - sold on that bogus tech-rally Tue suspecting it would crash, then ditched the remaining shares in Wed premarket. I have accepted this is a trader’s market, and have abandoned any buy-and-hold thoughts until the situation changes. I see this circus continuing for awhile, and the reason is because people still have hope. Every time oil goes flat or slightly up they are going to think it’s “the bottom” and buy like crazy, only to be disappointed and sell when it likely turns out not to be the bottom, thus VIX will stay high, and we will all get gray hairs. Nobody knows the impact oil will have on earnings, but I dot not believe it is a net postive in the short-term, the market clearly does not believe low oil is a positive, and analysts expect earnings to come in low. Meh, don’t need the stress for a crappy 7% S&P return. Had a large cash position before but now a massive 55% cash pile, China A-shares outperforming the world, Samsung trending up with no crazy volatility, occasional S&P500 day-trade shorts on rallies, plus some US preferreds for a 6% dividend anchor and increasing market values. Barely making it work, a lot of effort to grind out a little return in this wacko world market…
Brent trading below WTI this morning. This is NOT a supply problem. Get ready for a global slow down.
^ It’s a fascinating development. Strangely, crude prices are up this morning and WTI is still at a premium. What the hell is going on? Market inefficiencies?
I’d suspect part of it has to do with the recent easing of exports.
Royal Dutch Shell Allowed to Export Oil From US Wall Street Journal - 23 hours ago Royal Dutch Shell PLC has received approval from federal officials to export an ultralight …
Ultralight crude oil is condensate (lots being produced in the Eagle Ford Shale), and is a different commodity from WTI crude oil. Agree with you that policy is shifting toward exporting, but it’s not there yet on true crude oil and I don’t see how anticipation would impact the spot price today. WTI > Brent kind of changes the game for mid-con US refineries.
Not worthy of a headline, IMO. Shell doesn’t have any significant production from its own properties that would qualify for this because its limited to a specific type of product. Pioneer and Enterprise were noteworthy when they got this approval months ago, then the BIS said companies could “self classify” which just means export without a permit. But like Tommy says it doesn’t apply to crude oil, only very light condensate.
i found this article interesting–ive actually heard of traders who forgot to confirm their speculative bet on oil futures and accidentally requested physical delivery at settlement. They weren’t forced to utilize a tanker or store the oil themselves but the bank requested a hefty fee to get rid of the problem
lol read about that in reuters. hedge fund traders renting out tankers. the lease contract was about 12 months. hope it all works out for them and they make a killing.
Lol reminds me of a story from that options book of a trader who ending up having to take physical possession of a shit load of livestock because he closed his position too late or something.
^ Every futures trader has that nightmare, at least once a month.
The US wakes up from their holiday, oil starts falling fast in premarket, treasuries up, volitiity creeping up. Will this halt the rally that was building up, yet again?
Pass me the popcorn! 