I am off to a late start, so I need to catch up quick and make this post quick.
BOE did an emerge rate cut of 50bps to 0.25% and offered some funding shenanigans. More central bank intervention. It might not look like much now, but it will later.
The Saudis ordered Saudi Armamco to produce a million more barrels per day to 13m. The result, sharply lower crude, off by 4%. Also, you can track VLCC rates and read reports about Saudi securing all of these ships for extreme day rates, now fetching $200,000 per day. They were fetching $20 on Friday. This explosion is a major boon for FRO, STNG and many other tankers.
Dow futures are off 1,000. Whoever bought the close is fucked. If you bought early yesterday, you might want to consider selling today. This sordid action will not conclude right away. I suspect lower prices are coming and I’ll need to re-shuffle things to prepare for this reality.
If you enjoy the content at iBankCoin, please follow us on Twitter
I got stopped out of my buy yesterday. This tape is merciless, Mr. Fly.
As far as timing goes, I really think 3 weeks over VIX 30 is probable. It seems like everyone here is at least doing somewhat better than the market in general. Don’t get whiplash.
100% cash. Looking for trades. Likely everything will be sold at the close.
Buying GRUB here at 44.30. Loads of people working from home and nobody going out to restaurants. People are ordering food in. looks like their traffic has been going up since the start of this in February.
https://www.alexa.com/siteinfo/grubhub.com#section_traffic
this is COVID19 market with oil shock overlay. Te oil part can be mitigated easily if parties agree to cuts.
the COVID19, until we get more clarity on infections in the US this will be a shit show. we need to know how it looks like on a national level and not regional. delay of kits adds to the problem.
once we see the COVID spread then you make start making educated decision and the CB cuts will be jet fuel.
right now, very hard. this is not a banking crisis like 2008, although it can spread into credit via oil patch.
Get ready for faggot Trump to keep teasing the market with tweets about “bigly stuff” happening…much like he did for months repeatedly about the China Trade Deal. We’ll see if the market is dumb enough to bite.
Not this time. He is obviously incompetent.
From boots on the ground in the oil patch…
So, we operate in the permian. I’ll say this, break even for tier 1 shale is ~50 posted WTI. Now, that is wellhead cost, not full cycle, so no G&A. throw that in, and everything needs $60+.
At these prices, bakken is done, eagleford is done. Every call I had yesterday, was on how quick everyone could lay down rigs. Shale didn’t make money before, and thus why investors were screaming to get FCF positive. 2020 was the year for that, and we entered Q1 at $60+. Everyone is drilling their absolute best rock right now, and we are going to absolutely give it away.
2015-16 was rescued by the credit markets, which don’t exist today. Everyone’s hedges are worthless, since they are all 3 ways, and no one forecast a drop this big, so everyone is essentially unhedged going into 2020. I think you’re safe shorting every oil player there is for now. I am bullish gas guys, as we lay down more rigs, all the associated gas in the delaware will start to decline and the pure play gas guys will see a uptick in commodity pricing. Stick to the safe marcelus/utica names. Haynesville does’nt work except for PDP buys. XOM is not safe, too much debt. I repeat, XOM is NOT safe. Chevron is significantly safer based on their fee mineral position which no one else has. PXD is safe too.
This is 1986 on steroids. Midland has 2x the number of homes on the market we usually do, and it hasn’t even gotten bad yet. Apache announced the end of alpine high, and is closing midland office which essentially signals end of onshore NA exploration. I came to work today, and the parking garage is full of all the execs in the tower we share with some of the public cos. On a sunday, of spring break.
E&P makes up about ~4% of GDP, and the ripple effect of this will be big in the debt markets.