Gloom and doom are on everyone’s topic boards this morning. Oil is in a major sell-off! This is a “Buy and sell on the news” kind of moment. You can make money in the oil and gas market if you look in the right places, or listen to the research teams.
In Bloomberg this morning posted “Oil Tumbles to Three-Week Low as Virus Spread Menaces Outlook” with experts from the article below:
“Oil is seeing a continued loss of momentum, with sentiment taking a knock,” said Ole Hansen, head of commodities research at Saxo Bank A/S. “Most importantly, worries about the short-term demand outlook as governments respond to a surging delta variant” are weighing on the market.
Crude has run into stiff headwinds this month as the fast-spreading delta variant sweeps across the globe, leading to renewed restrictions, and as expectations that the Federal Reserve will ease stimulus strengthens the dollar.
“Despite the Delta spread, the market is undersupplied on our estimates, so we believe further downside risk is limited in the short term,” said Helge Andre Martinsen, senior oil market analyst at DNB Bank ASA.
The Bottom Line
The key issue for people in the energy markets is the inability of the world’s oil production to be turned back on immediately. We have talked about the new matrices that are the long-term reasons for our Perma Bull forecasts.
- The so-called “Infrastructure Bill” has some drama in play this week. There is way more than just infrastructure in the bill, and “People should be very afraid”. – Not Yoda, but close, and will be covered in another research topic.
- Delta Variant is rolling through the world is a fact. It is causing panic in the streets about demand. Let’s look in France and tell me that people are more afraid of the Delta Variant than staying locked up.
- The undersupply is a long-term influence that will be one of the “Perma Bull” pillars. This part of the matrices is critical for many reasons. The majors leaving the market, lack of money being put into E&P to replace reserves, and the belief that going “Greener” will cut oil demand.
- The U.S. Shale companies have heard the demands from investors and are showing too much financial self-disicpline. They are finally being good with their fiscal responsibilities almost to their long-term detriment. Bloomberg published on August 6th “Shale-Oil Output Forecasts May Fall Victim to Driller Discipline” and the title pretty much sums up the issue.
Oil is tied to natural gas almost like Siamese twins. Natural Gas is trading this morning at $4.16 and is in a bull run, while oil is down 3%. Short-term uninformed panic is driving prices this morning.
I would like to hear from you about your thoughts on the current market. Please reach out to me at the King Operating offices for a discussion on market information and what our research team sees on the investment horizon.
Look forward to talking with you soon.
Jay R. Young, CEO, King Operating
For Media, Press, or Interview information, please contact:
Stu Turley, CEO, and President, Sandstone Group
Phone (972) – 984 – 7403 x 3 Email – Stuart@sandstonecg.com
King Operating Partners I LP Active Fund – 4 Steps – $25M with over 1M in proven reserves.