Thanks for viewing,
After record (and very profitable) drops in Crude in the last few days, Chevron will be put under significant profitability pressure. Well, now we have dipped well below that due to:
- as yet unknown, but likely double digit reductions in global demand for crude oil,
- Russia not going along with the OPEC plan, which resulted in,
- Saudi Arabia (for some reason) discounting up to $6 per barrel and markedly INCREASING production,
- The stated aim of all this is to put higher US shale producers underwater - which may already be working.
It looks like there will be major pressure on all high cost oil producers (Saudi Arabia has an all in cost basis around $10 per barrel) for some time. I am not picking on Chevron especially - but considering their situation in light of their (and recently) likely break-even price above $40.
Where to from here? Probably a gap down when the markets open targeting below $72 in the short term, potentially much lower ($30 / share) if the price hangs around present (sub $30 per barrel) levels for any length of time. If Chevron gets that low, they make a lot of sense to pick up.
Any catalysts for a major price increase? Not while Iran is busy fighting their COVID-19 outbreak - they are likely too busy at the moment to continue their work destabilising oil refining and shipping in the middle east with drones and cruise missiles.
After record (and very profitable) drops in Crude in the last few days, Chevron will be put under significant profitability pressure. Well, now we have dipped well below that due to:
- as yet unknown, but likely double digit reductions in global demand for crude oil,
- Russia not going along with the OPEC plan, which resulted in,
- Saudi Arabia (for some reason) discounting up to $6 per barrel and markedly INCREASING production,
- The stated aim of all this is to put higher US shale producers underwater - which may already be working.
It looks like there will be major pressure on all high cost oil producers (Saudi Arabia has an all in cost basis around $10 per barrel) for some time. I am not picking on Chevron especially - but considering their situation in light of their (and recently) likely break-even price above $40.
Where to from here? Probably a gap down when the markets open targeting below $72 in the short term, potentially much lower ($30 / share) if the price hangs around present (sub $30 per barrel) levels for any length of time. If Chevron gets that low, they make a lot of sense to pick up.
Any catalysts for a major price increase? Not while Iran is busy fighting their COVID-19 outbreak - they are likely too busy at the moment to continue their work destabilising oil refining and shipping in the middle east with drones and cruise missiles.
Trade active:
Looks like we are heading for $30...
Comment:
Tentative target; $38