NEWS AND MEDIA
IT IS THE SEASON TO HIT THE ROAD
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This is the season to hit the road. Destinations are not unknown, promotions cause opportunities and that is what we have here!! Oil rigs are opening and refreshing. Feel free to share the stock rig spares and component to the oil market.
The relationship between supply and demand has a funny habit of holding true to form. Though a matter of pure coincidence, it is telling that the Wolfchamp news roughly coincided with oil price’s most recent peak. Since then, its per-barrel price has fallen by about a fifth to $44-ish despite the Saudi’s best efforts to push the price back towards $60, which is still down 60 percent from 2014 highs. Is it fair to ask if $60 is an arbitrary target? Think of it as the least sweet, sweet spot that enables the planned initial public offering of state-owned Saudi Arabian Oil (Aramco) to well, work, mathematically-speaking. You can bet your bottom petrodollar the very idea of taking the crown jewel public stirred a bit of controversy.
For the time being, the hope is US oil supplies will stabilize, relieving the downward pressure on prices. A pause would certainly mark a shift after a frenetic year at the drill bit: Total rig count in North America – the US and Canada – ended the week of June 23rd at 1,111, more than double the count from a year ago of 487. The rig count has risen for a remarkable 23 consecutive weeks.
It could be a novel approach is what’s needed to stabilize prices at a level that allows bond investors and so many other interested parties to sleep at night. Maybe the solution is moving up Shrove Tuesday. As of now the calendar calls for the day, also known as Pancake Day, to arrive on February 13, 2018, the day before Ash Wednesday. Why not hit the confessional early, deplete all those fattening ingredients from the cupboard as was customary among the old English, and call a moratorium on drilling? Think of it as the oil market’s answer to Lent, That is unless you’d prefer oil prices continue to fall. It all depends on the position you’ve assumed and whose side you’re on.