Just saw this on the internets and the timing is apt. With some grades of oil selling for nothing or in fact less than zero, energy high yield ready for reorganization and with macro-calls for the end of petrodollar – the empires of oil muse and consider a cut-back in production. Now, it’s JUST in the RUMOR stage and may fall apart further down the line, but in point in fact this may be the rescue package American energy needs. Well, not all would survive. Even assuming a production cut follows anytime soon, many operators are going to be pressed into bankruptcy and assets will be auctioned off. In fact there have been cutbacks and layoffs – there is tragedy going on at a personal level for rank and file. Strength begets strength and Icahnites may yet have their day.
I am currently reminded about hedgies Kyle Bass and Pierre Andurand – they are well aware that nothing cures low prices like low prices. I lump in Zachary Schreiber, Druckenmiller’s protege in this camp, another hedgie who shorted oil and is probably now on the other side of this hunting for bargains. It could be in three to five years, assuming we haven’t imploded for one reason or another, they could become some serious oil bulls. By then Gartman will declare $100+ oil and the move will have ended. By then iBC and other affiliates will be on orbital laser cannons, picking targets between sips of overpriced drinks.
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The rumour was out at the right place at the right time to trigger a change in sentiment. At the end of the day, sentiment and consensus is what matters. Time will tell whether this was enough to change sentiment.
it was ripe like a tinderbox for even a rumor but real change is messy and takes time.