The House of Said recently cancelled the London leg of the Saudi Aramco IPO roadshow. If they come public, without question, it will gobble up all available investable dollars and cast away all of the ancillary names to hell. We’ve seen this occur in the tech space over and over again — from FB to SNAP and many others. It should be noted, this is the ebb portion of the oil sector, based upon seasonal trends. In other words, historically speaking, this is a terrible time to buy oil stocks.
Does this mean your oil stocks will trade lower?
Yes, that is precisely what it means, if using historical norms. If you make money in oil stocks over the next month, consider yourself to be fortunate. The sector is now under fire, off by 13% the past two weeks, all the while stocks are hitting record highs. The rationale is scattered brained, so why bother?
The emphasis is on SAAS and biotech today, perhaps something else tomorrow.
But one thing is clear to me, stocks are strong at the same time bond yields are weakening — a relationship oddity. My shotgun to the head guess is for lower stock prices in the interim, followed by a spike in bonds and rally in gold, REITs and Utes.
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My shotgun to the head guess is the same, but I pulled the trigger early resulting in one heck of a headache.
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What’s really noteworthy about the Aramco offering, is that their released numbers in the Saudi Exchange prospectus (600+ pages) are still MUCH lower than past claims
Official OPEC 2019 Annual Statistical Bulletin: 267 billion bbl
https://www.opec.org/opec_web/en/publications/202.htm
“Independant” audit by Dallas-based DeGolyer and MacNaughton: 268.5 bill bbl
https://www.cnbc.com/2019/01/09/saudi-arabias-massive-oil-reserves-grow-by-2point2-billion-barrels.html
Prospectus: ____ bbl (Check for yourself motherfuckers)
https://www.saudiaramco.com/en/news-media/news/2019/saudi-aramco-announces-the-publication-of-prospectus
Now if the prospectus number are that low but STILL not up to Western standards for disclosure, then we can rejoice becuase Saudi Arabia and MBS will significantly less inlfuential in the very near future.
They want to sell except Audrey 2 is likely to be the reserves.