SMCJB 

Baker Hughes Rig Count (day early because of Good Friday) Down 58. That's 179 in 4 weeks!!! (19, 40, 62 & 58)

we are still far from 2016's rig count low.

haden 

we are still far from 2016's rig count low. Attachment 294567

Oh yes I agree. But I'm pretty sure it's going to be dropping for several more weeks.

A couple of years ago "they" pointed out the drilled uncompleted wells as an indicator of future production. At the time fracking was a lot more money than drilling so the thought was spending the money to frack and connect the wells was a better indicator of short term production. I haven't been following for a while so I do not know if that is still the case.

SMCJB 

Did some work on this a few weeks ago. For the oil storage play your only interested in ULCCs/VLCCs, so your looking for companies that have the highest concentration of VLCCs in the their fleets that were not already booked out on time charters. DHT and EURN are good candidates followed by FRO and STNG. They all had big run ups when CL went to $20 but in the last week have given up all their gains and are surprisingly trading near long term lows again. I know crude has rallied but May/Jul is still trading $8. If your bold they all have options as well which all have implied volatilities over 100% Disclosure: I have long delta positions in all 4 names mentioned.

Thanks for your input. I was involved in tanker stocks many years ago. I greatly admire the way "the pirate" John Fredriksen, also know as "The Viking King" treated his shareholders. Assuming his twin daughters must be into their 30's by now and firmly in control of the empire. FRO has been good to me in the past and it sure looks like a great opportunity is building here. World fleet is old, everybody was just hanging on for a couple of years with poor profits and minimal dividend. Then the US forces 20 tankers out of the pool and bang up go rates. Now it is a price war so the trading houses are reducing the fleet by taking on floating storage.

You know the only two big issues are first and foremost can OPEC + cut fast enough to match production to demand and of course how attractive will the Chinese yards make their pricing to jump start their economy (i.e. will the owners once again flood the market with new builds 2 years from now).

Was going to nibble on FRO and NAT but decided it would be best to wait for the dust to settle on the big meeting this week. Now we have the question of the retest for the market lows (equity and CL) which will jerk prices around. I learned the hard way that the market has a hard time separating tanker values from oil prices. Also I read that a lot of charters had put bookings on hold waiting for the OPEC outcome which was supposed to account for the big drop in rates last week. So I am being patient, just don't want to wait too long as the next round of quarterly earnings and dividend announcements could launch things straight up.

My perspective was purely that with VLCC rates double medium term averages the pure VLCC plays should have much better earnings in the next 3-6 months. I agree once the surplus has gone theres nothing to support high rates.

Severe contango especially in the 3 and 6 month spreads when front leg is front or close to front month.. never really analyzed rollovers.. is there a trade there with edge?
I dont think just selling the next month on day of rollover will give us anything (not like June will fall 4 bucks day after rollover)
Asking to see if someone had any feedback

jokertrader 

Severe contango especially in the 3 and 6 month spreads when front leg is front or close to front month.. never really analyzed rollovers.. is there a trade there with edge? I dont think just selling the next month on day of rollover will give us anything (not like June will fall 4 bucks day after rollover) Asking to see if someone had any feedback

20+ years ago (yes I'm that old) crude was range bound between 18 and mid 20s I believe. But if you were always long you generally made money. Why? Because the front month spread was always 20c-30c. So the market never went anywhere but you collect about $3/year in roll yield, rolling down to a cheaper month.

Ron


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SMCJB 

CRUDE OIL MARGINS UP 5.5% EFFECTIVE TUESDAY 7TH MARCH Maintenance margin as follows (Initial Margins, ie non-member rates will be 110% of these) Tier 1 (May) increasing from 6350 to 6700, +350 or 5.5% Tier 2 (Jun) increasing from 6200 to 6400, +200 or 3.2% Tier 3 (Jul) increasing from 5800 to 5950, +150 or 2.5% Others unchanged. For Reference/Comparison Tier 8 (Dec20) is 4700 Tier 20 (Dec21) is 3575 https://www.cmegroup.com/notices/clearing/2020/04/Chadv20-148.html#pageNumber=1

MAY20 CRUDE OIL MARGINS UP 12% EFFECTIVE TUESDAY 17TH APRIL

Maintenance margin as follows (Initial Margins, ie non-member rates will be 110% of these)
Tier 1 (June) increasing from 6700 to 7500, +800 or 11.9%
Others unchanged.

*NOTE* If your already trading June, unless NYMEX lowers margins, when June becomes prompt on April 22nd Margins will increase 17% from 6400 (Tier 2) to 7500 (Tier1). Again those are member rates.


https://www.cmegroup.com/notices/clearing/2020/04/Chadv20-163.html#pageNumber=1