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gk10 15 Aug 2018

Billionaires throw weight behind oil from Bloomberg Diesel, Stanley Druckenmiller is down $1.87m today, I’m sure he can afford it and that he is looking long term. That puts my thirty quid into perspective. I did try to speak to George Soros but somehow ended up paying some Eastern European bloke £7.50 for a takeaway goulash with some rice, I think i got the wrong number although rough rice was about the only commodity that was up on the day. A massive build today of petroleum stocks, up 17.4m barrels week oon week. I’ll leave it. Good luck tomorrow.

Diesel 15 Aug 2018

Billionaires throw weight behind oil from Bloomberg Nice one GK, Fortunately I don’t mix in those rarified circles…, but I think it’s fair to say they have access to information/resources we could only dream about. In any case I wouldn’t bet against them not being right. Soris’s record of getting the big calls right speaks for itself.

gk10 15 Aug 2018

Billionaires throw weight behind oil from Bloomberg D, Have you got their details, I think I had better drop them a line!

Diesel 15 Aug 2018

Billionaires throw weight behind oil from Bloomberg Stanley Druckenmiller just bought 1.7 million shares in vaneck vectors oil services ETF. George Soros is buying into energy stocks including Chevron Corp. Hey GK10, maybe you should drop them a line & explain how in your estimation they are being mugged? I know who I’d take notice of how about you ? “Global oil markets have tightened and oil prices will remain elevated in our view for the next few years”. James West Ann analyst at Evercore said earlier this month in a note to investors. "The international inflection point is underway and we believe it has been stronger than anticipated "

gk10 14 Aug 2018

Brent crude creeping towards $75 Forget the API and EIA data, OPEC are reporting OECD stock levels rose in May. What is interesting is they are sidestepping the grossly misleading five year average but instead have also reported against the more realistic January 2014 stock levels. A cartel needs to fix and adjust prices to cater for the present and the future, don’t they? “Stock Movements Preliminary data for May showed that total OECD commercial oil stocks rose by 8.6 mb, m-o-m, to stand at 2,823 mb. This was 236 mb lower than the same time one year ago, and 40 mb below the latest five-year average. However, stocks remain 253 mb above the January 2014 level. In terms of days of forward cover, OECD commercial stocks fell in May to stand at 58.8 days, which is 2.4 days lower than the latest five-year average. Balance of Supply and Demand In 2018, demand for OPEC-15 crude is estimated at 32.9 mb/d, around 0.5 mb/d lower than the 2017 level. In 2019, demand for OPEC-15 crude is forecast at 32.2 mb/d, around 0.8 mb/d lower than the 2018 level” And they want to pump up to 1m more barrels a day? Good luck tomorrow.

gk10 14 Aug 2018

Blackrock Mike, Blackrock had the best part of 1% of the company out on loan, they were only at 5.12% so it is difficult to gauge how many shares have been returned/sold as they only need to report their holdings above 5%.

gk10 14 Aug 2018

Brent crude creeping towards $75 Beatley, Apologies, I was misreading the chart, I’ve since put my poundland glasses on and see it now. OPEC’s featured article was quite interesting from yesterday’s report and is fitting for this thread. In my opinion the company needs to prove it can pay down debt which to date it hasn’t. The lack of debt paid down in H1 even shocked me at current oil prices and given the early conversion and asset disposals and I’m not easily shocked. The below is from OPEC: Oil market outlook for 2019 Following the robust growth seen this year, oil market developments are expected to slightly moderate in 2019, with the world economy and global oil demand forecasts to grow slightly less, while non-OPEC supply growth is projected to remain broadly steady. According to the initial forecast, the world economy is expected to expand by 3.6% in 2019, slightly below the 2018 growth forecast of 3.8% (Graph 1). This reflects some slowdown in the OECD economies, mainly due to the expected monetary tightening, in particular in the US, to some extent in the Euro-zone, and less so in Japan. In the major emerging economies, performance will range from slight growth in India, supported by government spending to a slight deceleration in China as a consequence of the country’s continued financial tightening. Russia will remain broadly steady while Brazil will pick up slightly. The re-emergence of global trade barriers has thus far only had a minor impact on the global economy. The 2019 forecast considers no significant rise in trade tariffs and that current disputes will be resolved soon. The increase in global trade has been a significant factor lifting world economic growth to higher levels in both 2017 and 2018. Hence, if trade tensions rise further, and given other uncertainties, it could weigh on business and consumer sentiment. This may then start to negatively impact investment, capital flows and consumer spending, with a subsequent negative effect on the global oil market. Graph 1: GDP growth forecast for 2019 World oil demand in 2019 is forecast to grow by 1.45 mb/d y-o-y, compared to 1.65 mb/d in 2018. The OECD region is anticipated to grow by 0.27 mb/d, with demand in OECD Americas driven by solid NGL and middle distillate requirements. Europe is projected to continue see an expansion, albeit at a slower pace, as economic growth projections ease slightly, while Asia-Pacific oil demand is anticipated to weaken in light of planned substitution programmes. In the non-OECD region, growth is anticipated at around 1.18 mb/d. Slightly lower Chinese oil demand growth, compared with 2018, is expected to be offset by higher oil requirements, mainly in Latin America and the Middle East. As for products, the focus will be on light and middle distillates to meet demand from the growing petrochemical sector, industrial activities, as well as expanding global vehicle sales. However, risks remain, related to economic developments in major consuming nations; substitution with natural gas and other fuels; subsidy programmes and their removal strategies; the commissioning and possible delays, or cancellation, of petrochemical projects; and programmes for fuel efficiencies, especially in the transportation sector. Non-OPEC oil supply for 2019 is forecast to grow by 2.1 mb/d y-o-y, broadly unchanged from 2018. This is mainly due to the expected increase in North America and new project ramp ups in Brazil. Leading the non-OPEC supply declines are Mexico, Norway and China, mainly due to the absence of new projects and heavy declines in mature fields. The pace of US shale growth will slow down considerably in 2H18 and continue into 2019 as the Permian faces take-away capacity constraints. Some of the planned pipeline capacity increases have been delayed, and as a result, the takeaway capacity issue could remain a major constraint until next winter. Moreover, the rig count, along with well completions, could start to slow and well productivity could decline as operators expand production Graph 2: Growth forecast in oil demand and non-OPEC supply in 2019* beyond ‘sweet spots’. Elsewhere, production ramp-ups through new projects are anticipated to support supply in Brazil next year, while Canada continues to expand its oil output, particularly from oil sands. The forecast suggests that demand for OPEC-15 crude is expected to average 32.2 mb/d in 2019, down by around 0.8 mb/d from 2018. Therefore, if the world economy performs better than expected, leading to higher growth in crude oil demand, OPEC will continue to have sufficient supply to support oil market stability.

Mikeclayton2 14 Aug 2018

Blackrock They have reduced their holding below 5pc announced after hours today maybe that explains the sp weakness. Brent has traded above 70 dollars since 5 April 2018 so PMO should be making decent money. Confident value will accrue in time.

lots_of_sense 14 Aug 2018

Morning Declines / Afternoon Recovery Is it me or does PMO currently get sold down in the morning only to recover by the late afternoon ? Take today for instance, Oil price up, UK Gas prices up and PMO down ? IMHO, I wonder whether short sellers are just pushing lower to buy back shorts or sell first thing to put some fear in the market ? Any contradicting views welcome ? or is this a pattern that people see on alot of other Oil E&P stocks ?

Beatley 14 Aug 2018

Brent crude creeping towards $75 GK10, I don’t believe you’ve read the chart correctly. From 2019-2023 they’re predicting shale growth of 4 million barrels per day. That’s huge, essentially they’re adding another Iran over a 4 year period, so in no way are they indicating that they production is or around max. What they are saying, and this is something that I subscribe to, is that due to mature basin decline and the reduction in conventional oil CAPEX, none shale, none OPEC will eventually more than offset any shale growth, thus if demand is still growing, OPEC will have a gap to fill. This of course could be all wrong. As you elude to, forecasting oil and S&D balances is notoriously difficult. I’m sure no one predicted the collapse of Venezuela or that we’d end up with oil in the $30’s despite demand growing at over a 1mbpd each year, so any forecast past the next 6 months does need to be taken with a pinch of salt. Anyways, that’s all macro so back to PMO. I’m guessing you believe debt reduction will disappoint this year? Do you also believe it’ll disappoint in 2019? Do you think oil prices will drop below $70 without OPEC adjusting production? My own analysis shows up to $600m of free cash flow in 2019 with all at $70, which could be supplemented with a Zama sale ($300-400m?), that’s a big chunk of money to pay down debt and potentially open up opportunities for the likes of MOL’s North Sea assets.

gk10 14 Aug 2018

Brent crude creeping towards $75 Vast reserves.

gk10 14 Aug 2018

Brent crude creeping towards $75 Beatley, Once again a well researched post, shame a few more on here don’t play the ball rather than the man, that probably says more about them than it does about you. US shale oil is still a relatively new concept that is developing and adapting fast, only a fool or an analyst would try to predict where it is heading. Would they be pumping millions of dollars in to the infrastructure to bring that oil to market if they thought production was at or around the max? That’s what the chart you posted seems to indicate. The first chart on the link you provided shows how OPEC adapt to supply and demand, a swing producer if you like, add Russia into the mix and their dominance really will be a force to reckon with. Look how the price is being held again in a tight range with the Saudis adjusting production as required to compensate for other members production going offline or returning. [link] Venezuela has fast reserves and the infrastructure to bring those reserves to market, they just don’t have the cash. When the Yanks have broken the current regime that could change and change quickly. Libya again has the infrastructure in place to increase production, their problem is getting the oil to the market. Some kind of stability could soon return to Libya, the opposition taking and then handing back control of the facilities may well have been a play for control, time will tell. Iran is the biggy with so many unknowns, will the chinese teapot refiners buy discounted Iranian oil to make up for the crippling taxes imposed on them? Will the US administration allow some concessions? Will the Iranian administration negotiate with Trump? Or will they have to keep pumping and refilling their storage facilities with no buyers for their oil? Nigeria, is unlikely to change anytime soon. I see the latest OPEC monthly report is indicating demand dropping off slightly but supply growing slightly. As you say they (OPEC) do appear to be looking for stability. $70-$75 works for the consumers and producers, would it work for Sealion? A quick mention of the US dollar index that a certain poster said would be in the mid to low 80’s by now, evening cocka, for the Billy Smart posters it’s worth noting this statement from the 16th May trading update, although the H1 update didn’t reflect any improvement. “Net debt reduced from $2.72 billion at the end of 2017 to $2.65 billion at the end of the first quarter. This reflects an accounting net debt reduction of c. $150 million from the early exchange of the convertible bond, offset by movement in joint venture balances and non-cash foreign exchange movements on non-dollar denominated debt. The subsequent favourable US$/£ exchange rate movement has partially reversed this impact” Night.

Beatley 12 Aug 2018

Brent crude creeping towards $75 GK10, I wouldn’t call it being negative, more just being realistic. Shale will grow, it’s just a matter of by how much. I could probably whittle on for ages about this, but thankfully HSBC have produced a chart that says most of it for me. Their analysis suggests that by 2021 that even with shale growth, none OPEC production will either be flat or declining. Even if demand growth falls, that could end up being quite a gap that OPEC need to fill each year moving forward. But what it they can’t fill the gap?! image.jpg1029x496 114 KB As I said in my previous post, many OPEC countries are already in decline for one reason or another. See the link below, the last two charts sum it up perfectly. 9 OPEC counties have declined from producing 11mbpd in 2008 to just 7.5m in 2018, whereas the big 5 (Saudi & friends + Iran) have increased from 20mbpd to 24mbpd. Now I’m not saying that OPEC can’t still increase further, but if Iran do lose a big chunk of production due to the sanctions then it looks like it could be a tight market going forward. [link] All ifs and buts of course, and there’s nothing to say HSBC’s analysis is correct, but what I do think is that if the Iran’s sanctions do bite hard, OPEC will have the opportunity to flex their production to ensure oil stays within a band. From the noises they make when oil starts getting towards $70 I would imagine that’s their low point, but at the same time I don’t think they’ll want oil over $80 for various different reasons. Anyways, back to PMO. My fair valuation now is not what fair value might be in 6, 12, 18 months time. With your ‘never decreasing debt pile’ comment you’re obviously sceptical of the debt reduction process. Rightly so to be fair, it has been hugely frustrating, but in my very humble opinion I believe PMO have turned the corner. With oil at $70+ and Catcher hitting its targets debt should fall as guided by year-end and pick up pace within 2019. Q4 this year will be interesting, if the Q3 trading update shows a decent dent in the debt and the Iran sanctions are fully applied, then with the usual year-end mark up, I’m going for a 150p 31st December 2018 closing price. That’s my first prediction for a while, hopefully it won’t come back to haunt me. ATB

Cockadoodledo 11 Aug 2018

Premier Oil trading and operations update due next Thursday (12th July) You are 100% right GK10 (aka Andy Pee from LSE) when you say you are part of the ‘no idea group’. An accurate summation. I’ve watched you deramp PMO for the past 12 months both on LSE prior to your ban and on here in your new guise of GK10. You post all sorts of rubbish at odd times of the day so just answer one simple question for me if you would. What has been the SP trend of PMO during that 12 month period? I bet you can’t even answer that simple question fairly without dodging it. Unlike you, I rarely offer advice but I will offer you some Andy: don’t take your own advice. That is a shortcut to the poor house. You missed out big time here.

gk10 10 Aug 2018

Premier Oil trading and operations update due next Thursday (12th July) World quant have started to close, as I said notorious shorters and most probably not linked to the convertible bonds. [link] Tiptoeing, Any views??? Back in @ £1.245p. I think the drop in price of crude is very overdone Gor every gk10 there is a dustbin, which to be fair is where you and your incorrect predicitions belong. tiptornado178065: PS: When oil returns to the $75 - $80 level next week the effect on PMO will be to drag it into the £1.50 level. And I didnt need any historical lines to tell me that. No you didn’t, did you?

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