Hey Oil Barons.......

[LonghornJones 837]

Lot of sexual tension between you two.

[Dr Fear 1268]

Lot of sexual tension between you two.

I've been trying to think of the right words to describe what has been happening on this thread and you nailed it.

[Dr Fear 1268]

Deleted

[StassneyHorn 6643]

7 hours ago, Storm the Field said:

$3.05 this morning. 93% gain over the past 10 weeks.

Let’s check 9 weeks ago on our banker’s thoughts below. The only thing Rex does is hedge by giving vague, undefined length short and mid term guesses, then follows up with multi year guesses.

On 4/11/2024 at 9:12 AM, Rex Kramer said:

 

On 5/20/2024 at 7:02 PM, Rex Kramer said:

Should I hedge NG right now?  6 month trade, either buying a put or collar with like a $2.25 floor. 

Well, show us.

Changing your commentary only 6 days ago to beat your chest over 5%, when it’s had a 93% gain over 10 weeks is zoo animal behavior.

[StassneyHorn 6643]

4 hours ago, Rex Kramer said:

Gas may not play out like this right away between between now and end of ‘25, we will at least double from where we are now, and oil will top $100 again. Gas could triple. 

This is the perfect example of my timelines comment.

we’ve got an immediate hedge, followed by an 18 month qualifier, a 2x guess with a possibility of 3x, and then more addiction to $100 oil

[Rex Kramer 1371]

19 minutes ago, StassneyHorn said:

Let’s check 9 weeks ago on our banker’s thoughts below. The only thing Rex does is hedge by giving vague, undefined length short and mid term guesses, then follows up with multi year guesses.

 

Well, show us.

Changing your commentary only 6 days ago to beat your chest over 5%, when it’s had a 93% gain over 10 weeks is zoo animal behavior.

Huh?  I didn’t hedge, thankfully. Have I not made it clear my mind was totally changed by data I gathered and reviewed 5 days ago?  I think I have. 

The above highlights why I was unsure and wasn’t really bullish on gas until very recently @MadTrapper

[Rex Kramer 1371]

2 minutes ago, StassneyHorn said:

This is the perfect example of my timelines comment.

we’ve got an immediate hedge, followed by an 18 month qualifier, a 2x guess with a possibility of 3x, and then more addiction to $100 oil

First, I can’t guess when these moves will happen. But gas has already reverted to the mean, or close to $4 which is probably more mean. Second, oil is already at its mean which Id say is $70-$75. Guessing $100 isn’t a stretch. Both commodities are going higher. Gas much more so because of its current level. Hard to say exactly when.  I’m not a trader or a prognosticator. I’m an investor and I’m sharing my views. Feel free to ignore them or just laugh at them. I’m sure I will be wrong many times in the interim but not directionally over the midterm. 

[StassneyHorn 6643]

You are absolutely a commodities trader and some junior associate needs you to sign off on trade allocations

[Rex Kramer 1371]

Just now, StassneyHorn said:

You are absolutely a commodities trader and some junior associate needs you to sign off on trade allocations

No, I’m a banker and I own working and royalty interests. I don’t follow technicals like a trader. My sentiments are driven by fundamentals and paying attention. 

[StassneyHorn 6643]

And hedging everything you ever type

[Rex Kramer 1371]

1 minute ago, StassneyHorn said:

And hedging everything you ever type

How so

[StassneyHorn 6643]

8 minutes ago, Rex Kramer said:

How so, I guess I could be wrong, sometimes, but probably over 18 months it might happen

 

[Rex Kramer 1371]

3 minutes ago, StassneyHorn said:

 

You’re a waste of time. Goodbye. 

[StassneyHorn 6643]

Please show me the obvious examples of the things I do, that I say I don’t, said the serious poster.

[MadTrapper 153]

@StassneyHorn, man, deep breaths. 

 

[StassneyHorn 6643]

I’m 100% right. Take that deep

[Horn Under a Bad Sign 20508]

Leaking, exploding orphan wells wreaking havoc in West Texas

"In recent years, Schuyler Wight has noticed a growing number of abandoned oil wells coming back to life, gurgling fluids on the surface of his West Texas ranch. Last week he found the biggest one yet.

Gassy water was gushing from the ground and down a quarter mile of roadway before it drained into a pasture on a remote corner of his land.

“It’s by far flowing more than any other,” Wight said. “It’s getting worse, there's no question about that.”

It’s the latest in a string of mysterious water features in the arid Permian Basin, the nation’s top producing oil field, that regulators have been unable to explain.

Last year, an eruption of salty water swamped several acres on Wight’s cousin’s ranch, triggering a multi-million-dollar cleanup. In 2022, a geyser shot up from a well in Crane County, then another on the Antina Cattle Ranch. Nearby, a large pond of gassy groundwater has become a permanent feature called Boehmer Lake.

Texas’ oilfield regulator, the Texas Railroad Commission, has yet to offer an explanation for what is driving so much water to the surface. After the massive cleanup effort in January, an agency press release said it was “continuing to investigate” the cause

https://www.texastribune.org/2024/06/11/west-texas-orphan-wells-water-bursts/?mc_cid=82ec508d3d&mc_eid=de6141672b

[LonghornJones 837]

Rex Kramer IS StassneyHorn! StassneyHorn IS Rex Kramer!

[Hate 20146]

Jesus Christ. Are you using Rex’s guesses to invest? If not, who the fuck cares?

[StassneyHorn 6643]

You decided to post that after 24 hours of silence. Seems you read the change in fundamentals as fast as Rex does

[Hate 20146]

I posted it when I read it. Why do you fucking care? Are you paying Rex? Are you using his “guesses” as some sort of strategy for your portfolio? If not, why do fucking care?

[StassneyHorn 6643]

I don’t care, I was tagged. Rex chest thumping after he saw a 5% opening number after he missed out on 75% is weird.

I’ve got an obnoxious natural gas trader like him in my family that I’ve had to hear shit like this for at least 20 years. The guy that’s never wrong because he puts 10 guesses out there, only acts on 3 of them, and never remembers his shit picks.

[billfromlaketravis 11536]

23 hours ago, Horn Under a Bad Sign said:

Leaking, exploding orphan wells wreaking havoc in West Texas

"In recent years, Schuyler Wight has noticed a growing number of abandoned oil wells coming back to life, gurgling fluids on the surface of his West Texas ranch. Last week he found the biggest one yet.

Gassy water was gushing from the ground and down a quarter mile of roadway before it drained into a pasture on a remote corner of his land.

“It’s by far flowing more than any other,” Wight said. “It’s getting worse, there's no question about that.”

It’s the latest in a string of mysterious water features in the arid Permian Basin, the nation’s top producing oil field, that regulators have been unable to explain.

Last year, an eruption of salty water swamped several acres on Wight’s cousin’s ranch, triggering a multi-million-dollar cleanup. In 2022, a geyser shot up from a well in Crane County, then another on the Antina Cattle Ranch. Nearby, a large pond of gassy groundwater has become a permanent feature called Boehmer Lake.

Texas’ oilfield regulator, the Texas Railroad Commission, has yet to offer an explanation for what is driving so much water to the surface. After the massive cleanup effort in January, an agency press release said it was “continuing to investigate” the cause

https://www.texastribune.org/2024/06/11/west-texas-orphan-wells-water-bursts/?mc_cid=82ec508d3d&mc_eid=de6141672b

I’d love for the Permian majors to come together and fund an abandoned well cleanup. It’s not their problem right now, but Michael Moore is still alive. 

[Rex Kramer 1371]

6 hours ago, StassneyHorn said:

I don’t care, I was tagged. Rex chest thumping after he saw a 5% opening number after he missed out on 75% is weird.

I’ve got an obnoxious natural gas trader like him in my family that I’ve had to hear shit like this for at least 20 years. The guy that’s never wrong because he puts 10 guesses out there, only acts on 3 of them, and never remembers his shit picks.

5%?  75%?  What are you talking about?  Explain it to me like I’m a child. You’re throwing numbers out there that have zero relevance to what I do for a living or as an investor. I didn’t miss out on anything. By hedging earlier at lower levels, I would’ve paid for insurance of my cash flow. I didn’t hedge and probably won’t now. I have no idea where you’re coming from man. I tagged you because you were making fun of my timing, I guess, and what I have guessed here is coming to fruition. Your entire critique is way off base. 

[MonkeyDoughnut 10357]

Can you guys get a room? Your personal slap fights has cluttered up this thread long enough. Just quit responding to each other or do it privately as no one else cares.

 

[Hate 20146]

This is badass! Biden needs to start approving more facilities if he really wants to help Eastern Europe, and really the rest of the world. Fuck Russia.

https://www.ft.com/content/443721ab-2631-4348-8ded-7788d25ba278

[StassneyHorn 6643]

9 hours ago, Rex Kramer said:

5%?  75%?  What are you talking about?  Explain it to me like I’m a child. You’re throwing numbers out there that have zero relevance to what I do for a living or as an investor. I didn’t miss out on anything. By hedging earlier at lower levels, I would’ve paid for insurance of my cash flow. I didn’t hedge and probably won’t now. I have no idea where you’re coming from man. I tagged you because you were making fun of my timing, I guess, and what I have guessed here is coming to fruition. Your entire critique is way off base. 

[Rex Kramer 1371]

5 hours ago, MonkeyDoughnut said:

Can you guys get a room? Your personal slap fights has cluttered up this thread long enough. Just quit responding to each other or do it privately as no one else cares.

 

I put his confusing nonsensical ass on ignore. You’re right, and I’m sorry to have engaged. 

[StassneyHorn 6643]

There’s nothing confusing about you getting on late and celebrating a very modest gain.

[Rex Kramer 1371]

On 6/11/2024 at 2:19 PM, Rex Kramer said:

I own working and royalty interests

On 6/11/2024 at 2:11 PM, Rex Kramer said:

I didn’t hedge, thankfully

Someone else can explain how the world works. 

[billfromlaketravis 11536]

IEA predicting Peak Oil… again. They’ve been saying the same thing since the 90s and here we are. It’s almost as if they have an agenda or something. I guess all those Indians entering the middle class are going to drive cars powered by rainbows and unicorn tears. 
 

https://www.iea.org/news/slowing-demand-growth-and-surging-supply-put-global-oil-markets-on-course-for-major-surplus-this-decade

[Rex Kramer 1371]

1 hour ago, billfromlaketravis said:

IEA predicting Peak Oil… again. They’ve been saying the same thing since the 90s and here we are. It’s almost as if they have an agenda or something. I guess all those Indians entering the middle class are going to drive cars powered by rainbows and unicorn tears. 
 

https://www.iea.org/news/slowing-demand-growth-and-surging-supply-put-global-oil-markets-on-course-for-major-surplus-this-decade

IEA is the worst. Everything about that is wrong. 

[MonkeyDoughnut 10357]

On 6/14/2024 at 8:40 PM, billfromlaketravis said:

IEA predicting Peak Oil… again. They’ve been saying the same thing since the 90s and here we are. It’s almost as if they have an agenda or something. I guess all those Indians entering the middle class are going to drive cars powered by rainbows and unicorn tears. 
 

https://www.iea.org/news/slowing-demand-growth-and-surging-supply-put-global-oil-markets-on-course-for-major-surplus-this-decade

Yeah, it's one thing to differ in opinion and be wrong, but IEA has no basis for their numbers. There is no conceivable way they will be anywhere near correct here given everything that is currently known and happening.

[Storm the Field 5302]

On 6/4/2024 at 11:17 AM, Storm the Field said:

Got my luck charm on display in my office again.

It's working!

[52-80 19264]

Interest spotlight on a trading episode in 2017, and example of difference between the physica/real l oil market and the financialized/"paper oil" market.

From a column this week at Bloomberg

 

Quote

Trafigura Group is a global commodity trading firm. It is essentially in the business of noticing that oil is cheap in one part of the world and expensive in another part of the world, buying the oil where it is cheap, loading it on ships, and moving it to where it is expensive. In January 2017, Trafigura noticed that oil was cheap on the US Gulf Coast and expensive in Singapore. So, between January and March, it “developed and deployed a large fuel oil export program designed to export fuel oil from the U.S. Gulf Coast to Singapore in order to profit from the open arbitrage.” That is: It made a plan to buy a lot of oil on the Gulf Coast, put it on ships, move it to Singapore and sell it there. Specifically the plan was to deliver “approximately 3.5 million barrels of physical high-sulfur fuel oil … for delivery in Singapore in February, March, and
April 2017.” [1]  

This all takes time, and there was a risk that by the time Trafigura got the ships to Louisiana, etc., the oil there would be more expensive and the arbitrage wouldn’t work. So first things first: Before moving ships, buying physical oil, etc., Trafigura bought oil futures as a hedge. [2]  “Trafigura established a long derivative position in U.S. Gulf Coast high-sulfur fuel oil, in part as an economic hedge for its anticipated purchases of physical fuel oil to export to Singapore.” You buy 3.5 million barrels of oil futures at today’s price, and then you go out and buy actual oil over time to load on your ships. [3]  If the price of oil goes up while you are buying it, you don’t care: You pay more for the oil you’re buying, but you make more money on your futures. You’re hedged.

Effectively, Trafigura saw a price signal — “oil is cheap in the Gulf and expensive in Singapore” — and responded in two ways. First financially (it bought futures to lock in the cheap Gulf price), and then physically (it went and actually moved the oil from Texas to Singapore).

But it went overboard on its hedging: It bought more than 3.5 million barrels of futures. “The long derivative position entered into by Trafigura was in excess of its short physical position that resulted from plan to purchase fuel oil in the U.S. Gulf Coast for arbitrage—the excess
essentially constituting a speculative position.” Instead of just hedging the price risk of its plan to buy 3.5 million barrels of oil in the Gulf, it made a financial bet on Gulf oil prices going up.

But it still had to buy 3.5 million barrels of actual oil in the Gulf to put on ships to send to Singapore. I said above that, because of its hedging, Trafigura should have been indifferent to the price it paid for that oil: If the price went up by $1 per barrel, it would pay $3.5 million more for the oil, but it would make $3.5 million on its futures, and those trades would offset. But of course with a long speculative position — with more than 3.5 million barrels of futures — that’s not quite true. Instead, Trafigura wanted to pay a higher price for the oil: If the price of Gulf oil went up by $1 per barrel, it would pay $3.5 million more for the oil, but it would make more than $3.5 million on its futures.

Specifically, the way the market structure worked is that the futures settled against a benchmark oil price set in the Platts window:

    The Platts U.S. Gulf Coast High Sulfur Fuel Oil benchmark (the “USGC HSFO Benchmark”) is assessed from Platts’s offices in Houston, Texas. The benchmark is assessed by Platts using a “market-on-close” (MOC) methodology. ...

    Platts generally determines the USGC HSFO Benchmark for a given day based primarily on bids to purchase, offers to sell, and trades in U.S. Gulf Coast high-sulfur fuel oil during a defined period of time called the “window” that Platts authorized. …

    The settlement value of Trafigura’s long derivative position was based on the average of the daily Platts USGC HSFO Benchmark value for the 19 trading days during the month of February 2017.

If you are an oil trader, and you have to buy a lot of physical oil, you have to make decisions about when and how you do it. Normally, you will want to buy oil as cheaply as possible. So you might do your buying quietly, without affecting the price much. You’d buy a little bit at a time, spread out over a long period. You might avoid buying too much during the Platts window, because your purchases during that window would very directly push up the benchmark price.

On the other hand, if you want the price to go up, you should just buy as sloppily as possible during the Platts window. Trafigura did:

    Beginning on February 1, 2017, and continuing through the end of the month, Trafigura bid heavily for and bought 80 cargoes (3.6 million barrels in total) of fuel oil in the Platts MOC trading window against its short physical position, an amount much larger than it had ever previously purchased in the window in a single month. Trafigura’s heavy bidding and buying activity in that short period tended to increase prices paid in the MOC window, and ultimately contributed to an increase in the daily Platts USGC HSFO Benchmark value, which benefitted Trafigura’s long derivatives position. Trafigura’s near exclusive use of the Platts window to source large quantities of fuel oil in one month departed from its past conduct, and the large volume created artificially high USGC HSFO Benchmark values throughout February 2017 that were not reflective of ordinary forces of supply and demand. This impact on the USGC HSFO Benchmark was to the detriment of market participants who looked to rely on the benchmark as a fair price reference of physical or derivatives trades.

The more it paid for its oil while Platts was setting the benchmark price, the higher that price would be, and the more money it would make on its futures position.

I have been quoting, of course, from the order in a US Commodity Futures Trading Commission enforcement action against Trafigura for market manipulation. Apparently buying all that oil at once is bad, and Trafigura agreed to pay $55 million to settle the case.

It’s a funny sort of manipulation. Trafigura was buying physical oil, in the quantities it needed, for a real economic purpose (to export it to Singapore). The buying was not itself manipulative. And it had those futures positions, in part, to hedge its price risk when it bought the oil. Given that, it made sense for Trafigura to buy during the Platts window: Its hedge was settled against the Platts window, so it should do its buying in the Platts window, to avoid any slippage between the hedge price and its actual buying price. So buying in the Platts window, to close out your Platts-based hedge, makes sense. It was just a bit too much: “The large volume created artificially high USGC HSFO Benchmark values throughout February 2017 that were not reflective of ordinary forces of supply and demand.” But you can see how a Trafigura trader could have thought “ah this is fine, we’re just buying to close out our hedge,” and then had the further thought “hmm that will push up the price, let’s put on some extra futures trades to profit from that.”

Anyway that CFTC enforcement action has two more interesting bits. Besides the market manipulation, there is an insider trading charge:

    Trafigura improperly obtained nonpublic information material to the gasoline market from [an employee of an unnamed “Mexican trading entity” (MTE)] in breach of the employer’s rules. Among other things, Trafigura received MTE’s pricing formulas used to sell its physical gasoline to another trading entity in Mexico, as well as the MTE’s monthly import “program,” meaning the volumes, types, and destination ports for gasoline the MTE planned to import in the next month. Trafigura also sometimes received competitor pricing information in the context of bilateral negotiations. The MTE considered this information confidential and material to its own business, while the information was material to Trafigura’s trading and business decisions, such as its negotiation and pricing strategies for gasoline products. Trafigura traders in Houston, Texas entered into physical and derivative gasoline transactions while knowing this confidential information.

Historically it was sort of lore that “insider trading in commodity markets is legal”: Traders in commodity markets tend to be producers or users of the commodity, and they will always have some sort of privileged information (about their own production, their discoveries, their needs, etc.) that others don’t have. But using other market participants’ inside information without their permission — getting the Mexican firm’s inside information and then trading based on that — is not allowed. “Trading commodities in interstate commerce or derivatives in knowing possession of material, nonpublic information disclosed in breach of a pre-existing duty violates” the rules, says the CFTC.

And then there is a bad nondisclosure agreement. We have talked a few times before about the US Securities and Exchange Commission’s war on NDAs. The way it works is:

    The SEC has a “whistleblower protection” rule saying that companies can’t threaten or retaliate against their employees for reporting misconduct to the SEC.
    Many firms have employees sign nondisclosure agreements that say something like “you won’t tell anyone any confidential information you get at our firm, and if you do we can sue you.”
    The SEC interprets that as a threat against whistleblowers: Theoretically, you can read it to mean “you won’t tell anyone (including the SEC) any confidential information you get at our firm (including about our crimes), and if you do we can sue you (to retaliate for your whistleblowing).”
    Therefore, those NDAs are illegal, and the SEC can extract fines from firms that have them, even if those firms would never dream of enforcing those NDAs against whistleblowers.

This is a good enough racket for the SEC that the CFTC is getting into it:

    Trafigura required its employees to sign employment agreements, and requested that former employees sign separation agreements, with broad non-disclosure provisions that prohibited the sharing of Trafigura’s confidential information with third parties. These non-disclosure provisions did not contain carve-out language expressly permitting communications with law enforcement or regulators such as the CFTC. The provisions caused confusion that resulted in an impediment to voluntary and direct communications with the CFTC about possible violations of the [Commodity Exchange Act] and CFTC regulations in violation of the CEA’s prohibitions against impeding direct communications with the CFTC.

Two CFTC commissioners put out separate statements objecting to this conclusion, saying that it “empower the Commission to line-item edit non-disclosure agreements” and “essentially wordsmiths job offer letters and other employment-related agreements with boilerplate confidentiality provisions.”

 

[Armybrat 40920]

I guess some honchos at Boeing are sweating bullets recently.

[tx 3 putt 77536]

 

[Rex Kramer 1371]

5 hours ago, tx 3 putt said:

 

Take it to CR

[tx 3 putt 77536]

2 hours ago, Rex Kramer said:

Take it to CR

carbon projects are only growing

shes and an interesting run as ceo 

[Rex Kramer 1371]

46 minutes ago, tx 3 putt said:

carbon projects are only growing

shes and an interesting run as ceo 

Unintelligible response. 

I’ll expand. That nonsense interview was outdone, but just barely, but the idiotic political tweet. Go be a stooge somewhere else. 

[billfromlaketravis 11536]

This interview aired in April 2023. Respectfully, how is it relevant to current thread discussions?

I’ll tread lightly here. Most of the money on Wall Street cares about DEI, and they want to invest in companies that have DEI initiatives. If Oxy or XOM didn’t try, they’d run a real risk of getting kicked out of hedge and pension fund portfolios. 
 

United Airlines and Amazon have purchased millions of dollars of carbon credits from Oxy. The science, well it has a lot to prove, but it’s currently a real business. 

[Rex Kramer 1371]

19 hours ago, billfromlaketravis said:

This interview aired in April 2023. Respectfully, how is it relevant to current thread discussions?

It’s not at all relevant. It’s 3 putt CR bullshit. 

[billfromlaketravis 11536]

Does the thread think the Saudis are maxed out on production or can they ramp if there’s a change at the top in the US?

[MadTrapper 153]

Hadn't seen that clip even if a year old.  But when the narrator says "that's something that is hard to wrap our head around", in reference to net zero oil, that kind of sums up the PR challenge.  Anthropogenic CO2 for both permanent sequestration and enhanced oil recovery is, in theory, a very practical way for an oil company to approach this era of net zero emission goals.  Whether they be pie-in-the-sky or not is another topic IMHO.

But why many lay persons with the loudest and most ardent followers are still so negative on net zero oil, assuming it can truly be done economically, is baffling to me. It's simple mass balance. We will see how successful or not Oxy will be at it but if it works, it could unlock massive reserves in areas where current secondary recovery is just not practical because there's no CO2 source. It just needs to not be a money drain, obviously.

Maybe people don't understand that CO2 EOR projects are a thing and that we have to actually drill for and pipe the CO2 long distances. IDK...it's not a silver bullet but it's one good piece of the puzzle.

[Rex Kramer 1371]

4 hours ago, billfromlaketravis said:

Does the thread think the Saudis are maxed out on production or can they ramp if there’s a change at the top in the US?

What do you mean a change at the top in the US?  Meaning, we lose our status as top producer?

[billfromlaketravis 11536]

9 hours ago, Rex Kramer said:

What do you mean a change at the top in the US?  Meaning, we lose our status as top producer?

A change in leadership. 

[fattyflattie 4638]

On 6/27/2024 at 5:40 PM, billfromlaketravis said:

Most of the money on Wall Street cares about DEI, and they want to invest in companies that have DEI initiatives. If Oxy or XOM didn’t try, they’d run a real risk of getting kicked out of hedge and pension fund portfolios. 

I was assured in a CR thread that this is absolutely, unequivocally not true.  I figured having lived it, I would have an idea, but nope - not true. 

[Rex Kramer 1371]

3 hours ago, billfromlaketravis said:

A change in leadership. 

And what would be the purpose?  Just market share increase?  I’m not questioning you; I just had not heard this and am thinking through the logic. Trump would actively release SPR to manipulate price. 

Saudis can do a lot in the short term I imagine. I doubt their ability to do it long term. 

[Fudge Nuggets 19227]

6 hours ago, Rex Kramer said:

And what would be the purpose?  Just market share increase?  I’m not questioning you; I just had not heard this and am thinking through the logic. Trump would actively release SPR to manipulate price. 

Saudis can do a lot in the short term I imagine. I doubt their ability to do it long term. 

Take it to CR.

[Rex Kramer 1371]

1 hour ago, Fudge Nuggets said:

Take it to CR.

Big difference between criticizing presidents for SPR transactions and posting a year-old tweet criticizing “republicans” when linking an oil executive in a non-political video. So, no, I won’t. 

FWIW, I was more critical of Trump’s SPR moves than Biden’s. Both were largely unwise. Biden at least made a small bit of financial sense. Both were populist political-only moves.