Here is an initial take on bunch of companies that are supposedly struggling to make payments to either investors or lenders. The comments below are based on 10 minute research time in each. The deep-dive work is pretty extensive and requires some domain knowledge and some almost “insider” hints.
It was just reported that OPEC + Russia have reached a deal to “restrict supply”, by CNN (https://www.cnn.com/2019/07/02/investing/premarket-stocks-trading/index.html) which is becoming the fake news king. There was no agreement on any production restriction or cuts and the reasons were given in the article in regard to this issue and others are just pathetic.
I was thinking for shorting DVN, based on market direction (sell off) and the fact that oil prices were pretty much stagnant despite potential war with Iran and also economic war with China and the rest of the world. It seems that the company is loosing money based on Yahoo Finance Stats.Here the biggest difference… Read More »
Oil pricing did not escape the complexity of the world economic system. In addition to supply and demand, there is the speculation, policies (country dependent from taxation to limitation on imports or exports), geo-political pressure, seasonality, weather and the tweets of the orange monster. The latter can move “the strongest economy in the world ever”… Read More »
It is hard to figure out who are the largest players in shale oil, where they invest and what they do. Some have different investment and rolls in different locations. But for the sake of making this money making idea, I will try.
OPEC — For example, having paid $29 billion for its foundational-stage development, Chevron now manages the Gorgon Gas Project in Australia. The site extracts liquefied natural gas (LNG) from the Greater Gorgon gas fields at the rate of 3 million barrels per day. Refs: Fracking Companies on the Verge of Prosperity
Great reports Where are the largest shale oil fields? https://www.fool.com/investing/2016/07/16/which-companies-are-the-biggest-shale-players-in-t.aspx
The geopolitics of oil is not that complicated as some people would like you to think. For the US, prices are impacted by supply coming from overseas.
If oil prices keep on sliding or if it stays low, then the largest hit will be those who need higher prices to survive. Shale oil, deep water driller, etc. And most of these are highly leveraged, so as the interest rate rise, then they will be also hit by debt service cost.
Next to shale oil, the deep drillers are probably the most impacted by oil prices. Although the deep drillers work off preset price, but investment in deep water is impacted by the projection of oil prices.