Lansdowne Oil & Gas Forum

Live Discuss Polls Ratings Documents
View
Page
14:51 30/03/2019

Hi, can anyone explain the 19% drop on Friday please?

12:13 24/02/2018

Missing the connection between Providence being up 8% and and Logp being down 2% as a sign that we are getting close to news on Barryroe. I would have thought that if there is news on Barryroe, Logp would also be pulled up on the coat tails of Providence.

21:40 10/09/2016

Baron oil

16:56 21/10/2015

Lansdowne is also up twenty percent today.

ShareTweet+ 1Mail
The conflict between OPEC and U.S. shale/tight oil producers has entered a new phase. And the result has been an accelerated decline in oil prices.

Last November (on Thanksgiving no less), Saudi Arabia led an OPEC decision to hold production stable, followed by a later significant increase in volume. For the first time, the cartel had opted to protect market share rather than price.

This certainly did not serve the interests of some OPEC members – Venezuela, Nigeria, Libya, Iran – who require much higher prices to balance unwieldy central budgets

The primary opponent was the new source of oil in the market – unconventional production from North America, the U.S. in particular. Thereupon began a tug of war that has largely determined the range of oil pricing variation over the past eight months.

This is what is strange about all of this. Essentially, the same market conditions prevail today as existed a year ago when crude oil was exceeding $100 a barrel. In fact, global demand is higher now than it was last July and accelerating. The price, on the other hand, has been cut in half.

To be sure, there is excess supply on the market (thanks to the remarkable recovery of American production, now at levels not seen in 40 years), and a correction was in order even without any OPEC move.

But that correction was more in the order of a decline to the low $80s or mid $70s. That has gone down much further because of what outside pressures have done to the trading environment.

Here’s my take on the international scheme to keep oil prices down…

The Big Players Still Play Dangerous Shorts

As I have noted here in Oil & Energy Investor on a number of occasions, the interchange between “paper barrels” (futures contracts) and “wet barrels” (actual consignments of oil) has been undergoing some major changes. It is the financial contract, not the allotment of crude, that drives the market.

When prices begin showing weakness, the manipulation turns to shorting oil. A short is a bet that the price of an underlying asset will decline. Control of a commodity (or stock shares, for that matter) is acquired by borrowing from a dealer. What is borrowed is then immediately sold. The short seller later returns to the market, buys back the asset, and returns it to the original owner.

If the short seller is correct (or has manipulated the market through huge positions to make it correct), a profit is made. Take this simple example. A futures contract in oil is obtained at $70 a barrel and sold at market. When the contracts are reacquired (i.e., the short seller buys at market to return the contract to its source), the price of oil has declined to $62. The transaction makes $8 a barrel (with the contract usually for 10,000 barrels), minus whatever small fee is paid for the right to use (temporarily) an asset actually held by somebody else.

Now, shorting is a component of the market. It remains quite dangerous for the average investor because there is theoretically no limit to how much you can lose if the value of the underlying asset goes up after the initial sale. It still must be bought back and returned, regardless of how much it has appreciated in price during the interim.

Some shorts are even more dangerous and are now limited or prevented by regulators. These involve running a “naked” short, a short contract without actually having the underlying commodity or stock to begin with.

Big players can sometimes do this by stringing together options and other pieces of derivative paper. Nonetheless, a really bad move here can bring down a trading house. For the individual retail investor, it is a direct way of losing the farm.

Two SWFs Have Been Shorting Oil…

But what if the underlying asset upon which the short is constructed – both its availability and amount – is under your control? What if you are shorting your own product?

Normally, this would be considered insane. Why deliberately reduce the price charged for your source of revenue? Why guarantee that you are going to be receiving less?

This makes sense only if the short is run for a different objective, one for which the short seller is prepared to take a price hit short term for more market control longer term.

Well, this is what OPEC nations have been doing at least over the past three weeks. Indications have surfaced from the volume and direction of paper makers in Dubai and on the continent that at least two Sovereign Wealth Funds (SWFs) from OPEC members have been shorting oil.

This is the latest stage in the competition with shale producers. By driving the oil price to below $58 a barrel, sources are indicating between 8 and 12% has been shaved off the Dated Brent benchmark price.

Brent is one of two major benchmarks against which most international oil trade is based. The other is West Texas Intermediate (WTI). Brent is set daily in London; WTI in New York.

…Depressing Brent Prices

Statistics for what shots are run in the U.S. are transparent. This is not the case in many other parts of the world. There, indication of movement is gained by what financing middlemen do.

As of Tuesday of this week, sources confirm that oil shorting contracts beginning on June 15 have increased markedly from Persian Gulf interests. Brent prices have declined 13.8% in the six weeks that followed.

According to sources cutting the paper, primary among the short contracts sold and purchased has been action sponsored by two of the largest SWFs in the world: SAMA Foreign Holdings (Saudi Arabia) and the Kuwait Investment Authority. In each case, financial intermediaries are used for the actual transactions. Other SWFs are suspected.

It is certainly possible that an SWF may short oil merely as a revenue-gathering device. After all, such funds are investing excess capital to gain a return and they exist all over the world.

But short sales are rather uncommon with these huge outfits; they would rather have longer-term returns from less volatility instruments.

Both of the SWFs identified obtain their funds from oil sales. The shorts constitute undercutting their own profits. However, the objective here is not to gain a return. They are, after all, assuring a reduced revenue flow from the very asset providing their own funding.

Why the Funds Are Playing This Game

This is a policy decision, not a fiduciary one. It is intended to drive the price down, prompting the closure and/or reduced operations of primary oil production competitors. And it is likely to have the intended affect as we move into unsustainable debt loads for many American shale producers, rising bankruptcies among smaller operators, and a resurgence in the M&A curve.

The shorts guarantee a loss of income but are orchestrated for other reasons. Obviously there are other shorts being run by interests having nothing to do with OPEC. In fact, as the major short positions emerge, it makes it that much easier for others to follow suit.

OPEC is proving a point by (at least in the short term) shooting itself in the foot to clear out competitors.

Short positions need to be unwound and settled. This will happen quickly. The Saudi Oil Ministry announced yesterday they expected the dip in crude prices to be ending soon.

Easy enough to say when major crude providers have been driving prices of their own product down all along.

15:21 18/08/2015

Whats the Aviva RNS about?

18:15 15/08/2015

What next for the Ocean Guardian? Currently 5 supply boats along side her, getting ready to move but where?

09:14 14/08/2015

Makes a lot of sense Sobeit, only time will tell...any day now

11:01 13/08/2015

Bound to be some nervousness prior to drill results...

15:39 05/08/2015

I am amazed there is not more activity here prior to drill results...I guess I should know better by now...The antics at JLP are offsetting the boredom from PVR/LOGP...

Page
Rate this company...

Latest from the Community...

Re: JLP Stream Log Does anyone have the video link for jubilee metals at UK ... Buy Order IELTS (WhatsApp :: +1(612)5249683) Buy Original IELTS#PTE#GMAT#G... Order IELTS, TOELF, PTE, GMAT, GRE, NEBOSH, FLE Ready to live, work or study abroad? Book your IELTS test Now with IDP IELTS Hi Friends, We can help you obtain high scores in IELTS/TOELF, FLE, ETS, GMAT, GRE, ESOL, TOEIC, CELTA/DELTA, PTE, OET, TESOL, NEBOSH, ARRT, LSAT, ( etc) Certificates online without you attending the exams. All our certificate are registered and can be verified online, you can use this certificates for Universities admission and any immigration use . The regions we cover are UAE, Qatar, Oman, Saudi Arabia, Kuwait, India, Pakistan, Philippines, Jordan, Australia ,Asia, Eu(UK), Canada, Italy, Ireland, Germany, USA etc. Because the business is risky, very little information is provided to the public and details of the certificates are only provided to paying clients so Contact us for more info. Our organisation is well connected with various invigilators, British council data base managers and test centers ,which enables us to register your scores in any ielts center around the world . All our certificates are original and British Council certified. If you want to make an inquiry please use below details to contact us. For more inquiry,contact . WhatsApp :: +1(612)5249683 Why us? >>We are fast, reliable and flexible >>We are popular and trusted >>We are highly experienced in documentation >>We have excellent pass into database We are confident in the quality of our services, but if suddenly you are not satisfied with the result of our work, we will refund you all the money for the work. Sometimes it happens that we do not fully satisfy our client and we have to return to him all the money for the work. Please note that we offer two types of IELTS & TOEFL Validation & Verification services depending on your needs Please note that all IELTS & TOEFL certificates etc Buy a TOEFL or IELTS fully Verified by Accredited University BUY IELTS CERTIFICATES- scores IELTS Certificate.Without attending the Exam IELTS, or IELTS certificate is an important step in your education! buy International English Language Testing System(IELTS) What is IELTS? IELTS stands for "International English Language Testing System". It's a system for testing the language ability for people who need to study or work in an environment where English is the language of communication. It is jointly managed by Cambridge English Language Assessment, the British Council and IDP Education. It was established in 1989 and is one of the two major English- language tests in the world (TOEFL being the other). Simple Process Buy Orginal IELTS no need to appear in exam easy process you get result with 3 weeks .Best Ielts Online Score.No Need to Attend The Exam.For anyone wishing to pursue higher education abroad or migrate, knowledge of English is absolutely indispensable. International English Language Testing System or IELTS as it is known is an internationally recognized method of testing capabilities of people from countries where English is not the native language.Best Ielts Online Score.No Need to Attend The Exam. For more inquiry,contact . WhatsApp :: +1(612)5249683 We are Licensed, Government approved recruitment agency in Canada. We wish to inform you that Canada is actively seeking foreign workers and professionals to help grow its strong national workforce. If you have Candidates (SKILLED/UNSKILLED) who are looking for TEMPORARY WORK PERMIT in Canada or already have a JOB OFFER from a Canadian employer and are unsure of what to do next, we have the perfect tools to get you started. We would be happy to assist you with the process from the beginning to end. You are most welcome to contact us so we can help you explore your options. AVAILABLE JOB OPENING INCLUDE: (1) Fish Packer (2) Fish Machine Tender, (3) Fish Cleaner (4) Fish Bin Tender, (5) Machine Operator, (6) Warehouse Supervisor (7) Drivers, (8) Brine Maker (9) Cooker (10) Cooker Mechanic (11) Food Production Worker (12) Manufacturing Assistant (13) store Manager, (14) Masseur (15) Store keepers (16) Chief Butcher, (17) Gardener (18) Electrician (19) Waiter/Waitress (20) Mechanic (21) Front Office (22) Chefs (23) Bar Manager (24) Store Keeper (25) Room Service (26) Banquet Manager (27) Factory Supervisor (26) Security Officer (27) Sales & Marketing Manager (28) Waiter/Waitress (29) Cashiers (30) Steward (31) Receptionist (32) Retail Manager BENEFITS: 1. Accommodation – Provided. 2. Ticket -Provided. 3. Medical – Provided. 4. Transportation – Provided. 5. Working hours – 8a.m-4p.m [Mon-Sat] 6. Vacation – 28.5 days every year 7. Salary/Wages – $25 per hour for Unskilled and $36 per hour for Skilled. 8. Contract – 2 years. 9. Extra time – $18 per hour 10. Insurance & Pension – According to Quebec Labor laws. 11. Other Benefits – Family Status, group benefit and other fringe benefits. 12. We pay our foreign Clients $74 USD for each Candidate you deploy to us. 13. Required number of candidates – 100 workers (Skilled and Unskilled) NOTE: Employees will render 20% Charges for visa processing while the Employer takes care of the remaining 80%. All the Visa process takes 4-8 weeks after payment and confirmation of fee. We Give The Best In Recruitment, Through An Excellent Immigration Consulting Services. For any question, asking or query feel free to contact: For more inquiry... Re: OKYO Stream Log Or, Could be a Chinese pharmaceutical? [link] …
Rate this company...

Latest from the Community...

Re: JLP Stream Log Does anyone have the video link for jubilee metals at UK ... Buy Order IELTS (WhatsApp :: +1(612)5249683) Buy Original IELTS#PTE#GMAT#G... Order IELTS, TOELF, PTE, GMAT, GRE, NEBOSH, FLE Ready to live, work or study abroad? Book your IELTS test Now with IDP IELTS Hi Friends, We can help you obtain high scores in IELTS/TOELF, FLE, ETS, GMAT, GRE, ESOL, TOEIC, CELTA/DELTA, PTE, OET, TESOL, NEBOSH, ARRT, LSAT, ( etc) Certificates online without you attending the exams. All our certificate are registered and can be verified online, you can use this certificates for Universities admission and any immigration use . The regions we cover are UAE, Qatar, Oman, Saudi Arabia, Kuwait, India, Pakistan, Philippines, Jordan, Australia ,Asia, Eu(UK), Canada, Italy, Ireland, Germany, USA etc. Because the business is risky, very little information is provided to the public and details of the certificates are only provided to paying clients so Contact us for more info. Our organisation is well connected with various invigilators, British council data base managers and test centers ,which enables us to register your scores in any ielts center around the world . All our certificates are original and British Council certified. If you want to make an inquiry please use below details to contact us. For more inquiry,contact . WhatsApp :: +1(612)5249683 Why us? >>We are fast, reliable and flexible >>We are popular and trusted >>We are highly experienced in documentation >>We have excellent pass into database We are confident in the quality of our services, but if suddenly you are not satisfied with the result of our work, we will refund you all the money for the work. Sometimes it happens that we do not fully satisfy our client and we have to return to him all the money for the work. Please note that we offer two types of IELTS & TOEFL Validation & Verification services depending on your needs Please note that all IELTS & TOEFL certificates etc Buy a TOEFL or IELTS fully Verified by Accredited University BUY IELTS CERTIFICATES- scores IELTS Certificate.Without attending the Exam IELTS, or IELTS certificate is an important step in your education! buy International English Language Testing System(IELTS) What is IELTS? IELTS stands for "International English Language Testing System". It's a system for testing the language ability for people who need to study or work in an environment where English is the language of communication. It is jointly managed by Cambridge English Language Assessment, the British Council and IDP Education. It was established in 1989 and is one of the two major English- language tests in the world (TOEFL being the other). Simple Process Buy Orginal IELTS no need to appear in exam easy process you get result with 3 weeks .Best Ielts Online Score.No Need to Attend The Exam.For anyone wishing to pursue higher education abroad or migrate, knowledge of English is absolutely indispensable. International English Language Testing System or IELTS as it is known is an internationally recognized method of testing capabilities of people from countries where English is not the native language.Best Ielts Online Score.No Need to Attend The Exam. For more inquiry,contact . WhatsApp :: +1(612)5249683 We are Licensed, Government approved recruitment agency in Canada. We wish to inform you that Canada is actively seeking foreign workers and professionals to help grow its strong national workforce. If you have Candidates (SKILLED/UNSKILLED) who are looking for TEMPORARY WORK PERMIT in Canada or already have a JOB OFFER from a Canadian employer and are unsure of what to do next, we have the perfect tools to get you started. We would be happy to assist you with the process from the beginning to end. You are most welcome to contact us so we can help you explore your options. AVAILABLE JOB OPENING INCLUDE: (1) Fish Packer (2) Fish Machine Tender, (3) Fish Cleaner (4) Fish Bin Tender, (5) Machine Operator, (6) Warehouse Supervisor (7) Drivers, (8) Brine Maker (9) Cooker (10) Cooker Mechanic (11) Food Production Worker (12) Manufacturing Assistant (13) store Manager, (14) Masseur (15) Store keepers (16) Chief Butcher, (17) Gardener (18) Electrician (19) Waiter/Waitress (20) Mechanic (21) Front Office (22) Chefs (23) Bar Manager (24) Store Keeper (25) Room Service (26) Banquet Manager (27) Factory Supervisor (26) Security Officer (27) Sales & Marketing Manager (28) Waiter/Waitress (29) Cashiers (30) Steward (31) Receptionist (32) Retail Manager BENEFITS: 1. Accommodation – Provided. 2. Ticket -Provided. 3. Medical – Provided. 4. Transportation – Provided. 5. Working hours – 8a.m-4p.m [Mon-Sat] 6. Vacation – 28.5 days every year 7. Salary/Wages – $25 per hour for Unskilled and $36 per hour for Skilled. 8. Contract – 2 years. 9. Extra time – $18 per hour 10. Insurance & Pension – According to Quebec Labor laws. 11. Other Benefits – Family Status, group benefit and other fringe benefits. 12. We pay our foreign Clients $74 USD for each Candidate you deploy to us. 13. Required number of candidates – 100 workers (Skilled and Unskilled) NOTE: Employees will render 20% Charges for visa processing while the Employer takes care of the remaining 80%. All the Visa process takes 4-8 weeks after payment and confirmation of fee. We Give The Best In Recruitment, Through An Excellent Immigration Consulting Services. For any question, asking or query feel free to contact: For more inquiry... Re: OKYO Stream Log Or, Could be a Chinese pharmaceutical? [link] …