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ryskey

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Everything posted by ryskey

  1. Read the post above the one you quoted.
  2. I love fundamentals. Storage, supply, demand, upstream investments, etc. Hard data that has no agenda, nor does it tweet. I hate trading noise. It distracts and even completely hides fundamentals. It relies on hearsay, political agendas, momentum trading, confirmation bias, lack of critical thinking, ignorance, and sentiment from those who yell loudest. It causes real damage to the worldwide economy. But it can't run from the fundamentals forever. And notwithstanding a worldwide recession, I am very much looking forward to a spectacular short squeeze in 2019. That will be delicious. But then it will probably swing too far in the other direction. The world does not have enough oil to meet demand in late 2019 and 2020. Again notwithstanding worldwide recession.
  3. "Increased" Saudi exports in preparation for Iranian cuts and mid-term elections was never from increased production. It was liquidation of their own storage. Essentially a transfer of storage from SA to the US. Then the last minute waivers caught SA off guard and Trump probably burned a bridge that was already very flammable to begin with (Khashoggi). It's no accident that Saudi prices to the US went up the day after mid-term elections, and they started talking about unilateral, voluntary production cuts a week later when oil was still comfortably in the 60's. They wouldn't have done that if their export levels were sustainable. They and everyone else knows that the most liquid oil benchmarks (WTI and Brent) trade disproportionately on US inventory data. Why? Because we're transparent, have good data, and those markets have the most liquidity. Self-fulfilling prophecy. China was also drawing down their own storage, displacing Saudi imports. China is not transparent, nor do they have good inventory data, nor do they have a global benchmark with a very liquid futures market. Those exports from Saudi have resumed. On top of that you have speculative short sellers piling in with the few logical buyers (outside refiners and pipelines) at the moment sitting on the sidelines waiting for this thing to stabilize. Those Saudi exports that reverted to normal will take months to manifest in the market. It's a cumulative effect that will start 45 days after the last "extra" tanker left Saudi ports headed to the United States. So in about 3 weeks. You won't notice it in that first EIA weekly report. But 2 months later, after Saudi exports have reverted to normal, the market will have priced in the effect. And all those speculative short positions will have to close out in spectacular fashion. Forced buying at ever-increasing prices. Might take several months or even half a year. But it's going to happen***. A tweet from the President can't change physical realities. ***Exception here being demand destruction from global recession. Which may have started a few weeks ago.
  4. https://www.intelligencesquaredus.org/debates/progressive-populism-will-save-democratic-party#vote Excellent debate on which path Dems should go if the goal is to win in 2020. The debate between progressive Bernie-esque Dems and Centrist establishment Dems resulted in a pretty resounding victory for the Centrists.
  5. These used to just be private, cash-flow heavy companies that paid dividends/distributions. They still are, to some extent. The flexibility to increase or decrease the dividend depending on market conditions is what can enable them to survive during a downturn. In that respect, public upstream MLPs were too rigid. I think patient private capital is the answer here. Something cash-flowing so much is severely limited on the upside, but is also very protected on the downside. Lots of cash flow with aggressive hedging, moderate leverage, and some low-risk development is a nice business model. A pension fund or endowment should be all over that asset. Buy the asset, pay out dividends when appropriate, re-invest cash flow when appropriate, pay down debt when appropriate, lever up where appropriate, and finally, exit when appropriate. It's not a tough business model but the lack of patient capital is definitely an issue.
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