An Interesting Play Off Cheap Brent and The Destruction of US Oil Production

2,699 views

Here is an article on VLCC rates from late November.

But with the Brent oil price now 40 percent lower than July, there could be more VLCC fixtures as refiners bought oil for storage, the Singapore broker said.

VLCC rates for the benchmark route from the Middle East to Japan climbed to almost W64.50 on Thursday, up from just under W51 a week ago, the highest since Feb. 18. Rates are the equivalent of nearly $60,500 per day.

Day rates were about $60,000 then.

Now they’re at 5 year highs, over $81,500 per day.

Why is this happening?

Supply is tight, real tight, as is always the case in December. As the Dry Bulk Index implodes, the oil tanker rates explode. Perhaps it has something to do with plunging Brent prices are producers storing crude in these tankers. Longer term, if US production is coming down, due to high cost producers in the shale, it makes 100% perfect sense to believe that we will, once again, begin to import crude from overseas.

Saudi Arabia wins. Yes?

Here are 3 mo charts of the Dirty Tanker Index (unrefined crude) and the Clean Tanker Index (refined product)
CrudeRefined

The reason why FRO has struggled in recent years is two fold.

1. Debt burden.
2. Lack of volume due to the surge in US oil production.

Well, they just restructured more than $20 million in debt and I don’t think we need to worry about domestic oil production any longer. With oil coming in again, I sold out of BALT for a staggering 27% loss and rolled half the proceeds into FRO. I will deploy the rest of those proceeds on a dip.

In other words, for the New Year to come, I am discarding the losers and starting with fresh ideas.

Closing a Chapter, Opening an Old One Again

1,597 views

I closed out of the rest of my GPRO position, squandering a 25% gain and turning it into a 15% loss–a cardinal sin in trading.

In light of the Sony scandal and my desire for revenge trading, I moved those assets over to FEYE. This is the same stock that fucking destroyed me and left me in a tub filled with ice with a kidney missing, back in May. I had sold in the high $40’s and now I am back in, as the p/s ratio is now a reasonable 12x.

MAKING LATERAL MOVES

1,100 views

For tax purposes, I did a bunch of reshuffling today. After these sales, I am done locking in losses.

Some partial sales include YELP, TRIP, SLCA.

Full sales COP, CHK, T and OZM.

I replaced those stocks with BABA, OXY, MS, FMSA, ACAT and ETR.

I RAISED SOME CASH

1,749 views

LOL.

This is outrageous. I sold COH for an 8% loss. What was I thinking anyhow? Normally, I’d be out there, chest puffed up, adding to some of my winning positions, like HGG or maybe some HABT. But I have no business investing money right now. Post BALT, GPRO let down, LITB post spectacular earnings demise, YELP, I’ve concluded that I’d be better served doing nothing at all.

I’ll simply wait here for some things to pan out, become a monk, climb mountains with a bearded face and become in tune with nature.

Thesis Change

922 views

I sold out of TRN for a 5.5% loss. It was my second largest position. I am no longer interested in playing the oil reflation trade.

Fly Sell: $TNA

810 views

I bought this on 10/2 during The PPT oversold period at $62.21. It ended up being correct, as always.

UPDATE: I sold out of MBLY too.

Making a Few Choice Moves

749 views

I sold out of ETR, my largest position, for a small gain. With some of the proceeds, I bought FMSA and added to CYBR. Although tempted to buy other stuff, with the rest of the proceeds I will leave in cash–due to the insane nature of this market.

Cash is now 10%.

Took Profits on a $100 Roll

706 views

I sold off 75% of my PANW position, post roll. I will keep the remainder. With the proceeds, I have a hot pick, forthcoming.

An Interesting Play Off Cheap Brent and The Destruction of US Oil Production

2,699 views

Here is an article on VLCC rates from late November.

But with the Brent oil price now 40 percent lower than July, there could be more VLCC fixtures as refiners bought oil for storage, the Singapore broker said.

VLCC rates for the benchmark route from the Middle East to Japan climbed to almost W64.50 on Thursday, up from just under W51 a week ago, the highest since Feb. 18. Rates are the equivalent of nearly $60,500 per day.

Day rates were about $60,000 then.

Now they’re at 5 year highs, over $81,500 per day.

Why is this happening?

Supply is tight, real tight, as is always the case in December. As the Dry Bulk Index implodes, the oil tanker rates explode. Perhaps it has something to do with plunging Brent prices are producers storing crude in these tankers. Longer term, if US production is coming down, due to high cost producers in the shale, it makes 100% perfect sense to believe that we will, once again, begin to import crude from overseas.

Saudi Arabia wins. Yes?

Here are 3 mo charts of the Dirty Tanker Index (unrefined crude) and the Clean Tanker Index (refined product)
CrudeRefined

The reason why FRO has struggled in recent years is two fold.

1. Debt burden.
2. Lack of volume due to the surge in US oil production.

Well, they just restructured more than $20 million in debt and I don’t think we need to worry about domestic oil production any longer. With oil coming in again, I sold out of BALT for a staggering 27% loss and rolled half the proceeds into FRO. I will deploy the rest of those proceeds on a dip.

In other words, for the New Year to come, I am discarding the losers and starting with fresh ideas.

Closing a Chapter, Opening an Old One Again

1,597 views

I closed out of the rest of my GPRO position, squandering a 25% gain and turning it into a 15% loss–a cardinal sin in trading.

In light of the Sony scandal and my desire for revenge trading, I moved those assets over to FEYE. This is the same stock that fucking destroyed me and left me in a tub filled with ice with a kidney missing, back in May. I had sold in the high $40’s and now I am back in, as the p/s ratio is now a reasonable 12x.

MAKING LATERAL MOVES

1,100 views

For tax purposes, I did a bunch of reshuffling today. After these sales, I am done locking in losses.

Some partial sales include YELP, TRIP, SLCA.

Full sales COP, CHK, T and OZM.

I replaced those stocks with BABA, OXY, MS, FMSA, ACAT and ETR.

I RAISED SOME CASH

1,749 views

LOL.

This is outrageous. I sold COH for an 8% loss. What was I thinking anyhow? Normally, I’d be out there, chest puffed up, adding to some of my winning positions, like HGG or maybe some HABT. But I have no business investing money right now. Post BALT, GPRO let down, LITB post spectacular earnings demise, YELP, I’ve concluded that I’d be better served doing nothing at all.

I’ll simply wait here for some things to pan out, become a monk, climb mountains with a bearded face and become in tune with nature.

Thesis Change

922 views

I sold out of TRN for a 5.5% loss. It was my second largest position. I am no longer interested in playing the oil reflation trade.

Fly Sell: $TNA

810 views

I bought this on 10/2 during The PPT oversold period at $62.21. It ended up being correct, as always.

UPDATE: I sold out of MBLY too.

Making a Few Choice Moves

749 views

I sold out of ETR, my largest position, for a small gain. With some of the proceeds, I bought FMSA and added to CYBR. Although tempted to buy other stuff, with the rest of the proceeds I will leave in cash–due to the insane nature of this market.

Cash is now 10%.

Took Profits on a $100 Roll

706 views

I sold off 75% of my PANW position, post roll. I will keep the remainder. With the proceeds, I have a hot pick, forthcoming.

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