I honestly have no idea. If he follows up with anything I'll post it.ag94whoop said:
What does that margin call mean to them
Houston..we have a problem....
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Last: 4 hrs ago by MavsAg
Heine, for the less educated among us (raises hand), can you explain the bolded terminology? TIAHeineken-Ashi said:
From another forum. An oil trader of 30 years. Anyone have any insight or can corroborate?Quote:
BIG reversal from my 55 handle I have been looking for since Q4-2024. Now what?
Ok, first let's look at what happened:. Today we had a monumental move on crude structure that I can only describe as the equivalent of the financial calamity of 2008. most don't understand that crude oil is a fungible commodity so they treat it as they would equities, which is a major mistake. China, who is naturally short energy was massively long deferred oil structure because ..... it was a hedge for what they thought they needed.
Today, they got a margin call. YEP! A country got a margin call.. NEVER in the history of the world has a country gotten a margin call. And it happened today.
I have no idea, but if they had a bunch of long term contracts that they refuse to take delivery on (assume $80/bbl) and instead try to get current contracts at $60/bbl, could they try to swap or do something?
Or am I just making this worse in my head?
~egon
Or am I just making this worse in my head?
~egon
They need a lot. They produce a little. They bought a lot of future supply at a fixed price on leverage.Quote:
China, who is naturally short energy was massively long deferred oil structure because ..... it was a hedge for what they thought they needed.
Thanks! Makes sense.Sims said:They need a lot. They produce a little. They bought a lot of future supply at a fixed price on leverage.Quote:
China, who is naturally short energy was massively long deferred oil structure because ..... it was a hedge for what they thought they needed.
The lingo is new to me. I'm not an oil trader. No experience in the field. Just a general trader watching. He made these post much earlier that night.Swollen Thumb said:Heine, for the less educated among us (raises hand), can you explain the bolded terminology? TIAHeineken-Ashi said:
From another forum. An oil trader of 30 years. Anyone have any insight or can corroborate?Quote:
BIG reversal from my 55 handle I have been looking for since Q4-2024. Now what?
Ok, first let's look at what happened:. Today we had a monumental move on crude structure that I can only describe as the equivalent of the financial calamity of 2008. most don't understand that crude oil is a fungible commodity so they treat it as they would equities, which is a major mistake. China, who is naturally short energy was massively long deferred oil structure because ..... it was a hedge for what they thought they needed.
Today, they got a margin call. YEP! A country got a margin call.. NEVER in the history of the world has a country gotten a margin call. And it happened today.
Quote:
Crazy close there just a few minutes ago. With all the volatility throughout the day, market structure in the front got absolutely smacked and is close to joining the back of the curve in Contango. We now have Deferred structure in contango in both the medium term (Dec Red Dec) and in the Longer terms (Dec Blue Dec and Dec 26/Dec 27). Under the hood, the market took a bigger smack than what the front month move would indicate. The only thing holding this market by the skin of its teeth is the front structure (ie firs 3-6 months). Otherwise, the market is expecting a lot more pain to come. Bounces are inevitable, especially with the carnage we have had the last 3 sessions. But right now, the market is telling us that if those bounces are seen, they are to be used as opportunities to either cut losses (if long), or press (add to shorts).
A couple of things to be aware of.... European Majors like Total, Shell and BP tie up huge sums of capital into their Trading business and I suspect they all got massive margin calls over the last 2 days including today. They don't rely on revolving credit lines like the private Trading Shops do, but they do still have MASSIVE physical positions that have them de-facto long exchange traded instruments. Other than highly leveraged oil producers (ie APA and DVN), I would also be very careful about trying to catch knives with those 3.
Quote:
After-hours market is now making deferred storage profitable. Meaning, the market is pricing a meaningful recession in the energy market incentivizing storing crude oil is more profitable than refining it. A VERY BIG DEAL! We are going MUCH MUCH MUCH lower.
Quote:
This entire move on structure reminds me of Mother Rock Vs. Centaurus. Classic Poker table move on the Crude Oil sector. This is so classic but at an ENORMOUS scale (talking about deferred spreads - Dec R Dec and Dec B Dec). Looks like a country(ies) got CRUSHED! This is not a single or multiple trading house failure. THIS IS A COUNTRY WIDE deal.
Quote:
I can tell you without a shadow of a doubt..... I would hate to be at a poker table across from Scott and Howard. That is not a good table to be at. And I suspect today's move on Crude Oil structure was Scott and Howard going ALL IN with a Royal Flush in hand. IT was the MotherRock Vs Centaurus moment of the natural gas era on STEROIDS
Bryan Sheffield says operators should stop drilling right now.
Thank God we have the Sheffield boys to tell us how to act.
Furlock Bones said:
Bryan Sheffield says operators should stop drilling right now.
Rules for thee…
Where did he say that?
That seems crazy.
That seems crazy.
Tell him to cover the take or pay contracts, CDC's or MVC's of who he's referring to.
Anyone know who US Energy Development bought 20k acres in Reeves and Ward County from?
https://www.prnewswire.com/news-releases/us-energy-development-corporation-expands-permian-footprint-acquiring-390-million-asset-and-announces-upsized-credit-facility-302428356.html
https://www.prnewswire.com/news-releases/us-energy-development-corporation-expands-permian-footprint-acquiring-390-million-asset-and-announces-upsized-credit-facility-302428356.html
ConocoPhillips
I assume that gets waived and whoever from there side agreed to that threshold gets terminated.Heineken-Ashi said:
From another forum. An oil trader of 30 years. Anyone have any insight or can corroborate?Quote:
BIG reversal from my 55 handle I have been looking for since Q4-2024. Now what?
Ok, first let's look at what happened:. Today we had a monumental move on crude structure that I can only describe as the equivalent of the financial calamity of 2008. most don't understand that crude oil is a fungible commodity so they treat it as they would equities, which is a major mistake. China, who is naturally short energy was massively long deferred oil structure because ..... it was a hedge for what they thought they needed.
Today, they got a margin call. YEP! A country got a margin call.. NEVER in the history of the world has a country gotten a margin call. And it happened today.
Welcome to the China Club
"Here's the pitch...POPPED it up! Oh man, that wouldn't be a home run in a phone booth."
-Harry Carey
"Here's the pitch...POPPED it up! Oh man, that wouldn't be a home run in a phone booth."
-Harry Carey
Valero announcing intent to close a refinery in California and taking a $1.1B hit....
California is just wrecking itself....
California is just wrecking itself....
China Halts Liquefied Gas Imports from the US Key Reasons & Impact
Sure this will help the NG market in the US. Also realize China was not a 'major' importer of US LNG, but probably helped the spot market trades.
~egon
Sure this will help the NG market in the US. Also realize China was not a 'major' importer of US LNG, but probably helped the spot market trades.
~egon
Anyone know who got this asset from Crescent?
https://www.hartenergy.com/exclusives/crescent-energy-sells-83mm-permian-assets-reduce-debt-212680
divestment of non-operated Permian Basin assets for $83 million as part of the company's plans to sell $250 million of non-core divestures, Crescent CEO David Rockecharlie said April 22.
The assets, going to an undisclosed private buyer, are in Reeves County, Texas, with 3,000 boe/d (~35% oil) in expected production in 2025.
The transaction has an effective date of December 31, 2024.
https://www.hartenergy.com/exclusives/crescent-energy-sells-83mm-permian-assets-reduce-debt-212680
divestment of non-operated Permian Basin assets for $83 million as part of the company's plans to sell $250 million of non-core divestures, Crescent CEO David Rockecharlie said April 22.
The assets, going to an undisclosed private buyer, are in Reeves County, Texas, with 3,000 boe/d (~35% oil) in expected production in 2025.
The transaction has an effective date of December 31, 2024.
OPEC trying to kneecap the crude market. Members report they will ask to the group to increase production quotas at June meeting. Crude market puked.
Meanwhile, EU has cut rates 7 times in 12 months as they head into recession, flooding the market with oil is a great move as the world turns recessionary...maybe we could get negative prices again.
Furlock Bones said:
OPEC trying to kneecap the crude market. Members report they will ask to the group to increase production quotas at June meeting. Crude market puked.
Cheap does help the overall economy. That's one good thing at least.
The left cannot kill the Spirit of Charlie Kirk.
Apparently the argument Trump is putting forward is that $30 oil will stop Russia's ability to wage war. So I don't think this is just OPEC trying to crush US output. (Just another data point)
That said.
Please no.
That said.
Please no.
Snap in your chinstraps boys, here we go.
O&G goes down too much ,the entire economy will fall.
So much of our economy is geared to it.
We need $75 oil ans $4 nat gas for Texas to flourish
So much of our economy is geared to it.
We need $75 oil ans $4 nat gas for Texas to flourish
Who did EOG buy in the Eagle Ford? $275MM
nosoupforyou said:
Anyone know who got this asset from Crescent?
https://www.hartenergy.com/exclusives/crescent-energy-sells-83mm-permian-assets-reduce-debt-212680
divestment of non-operated Permian Basin assets for $83 million as part of the company's plans to sell $250 million of non-core divestures, Crescent CEO David Rockecharlie said April 22.
The assets, going to an undisclosed private buyer, are in Reeves County, Texas, with 3,000 boe/d (~35% oil) in expected production in 2025.
The transaction has an effective date of December 31, 2024.
Anyone?
Where are you seeing that? Or just hearing whispers?Comeby! said:
Who did EOG buy in the Eagle Ford? $275MM
gougler08 said:Where are you seeing that? Or just hearing whispers?Comeby! said:
Who did EOG buy in the Eagle Ford? $275MM
Earnings call. Check their slide deck.
gougler08 said:Where are you seeing that? Or just hearing whispers?Comeby! said:
Who did EOG buy in the Eagle Ford? $275MM
https://www.hartenergy.com/exclusives/eog-resources-bolts-30000-acres-eagle-ford-275mm-212797
EOG Resources Bolts-On 30,000 Acres in Eagle Ford for $275MM
EOG Resources said it bolted on undeveloped core Eagle Ford Shale acreage in Atascosa County, Texas, and made a discovery offshore Trinidad.
Well, OPEC+ marches onward with the planned production hike. Lots of wailing and teeth gnashing elsewhere on the interwebs over the decision.
I think the hike was priced in mostly, but any excuse to pummel the price of oil seems to be the norm, so could be red as hell on Sunday night for all I know.
I think the hike was priced in mostly, but any excuse to pummel the price of oil seems to be the norm, so could be red as hell on Sunday night for all I know.
https://finance.yahoo.com/news/unicorn-eog-ropes-last-large-171200579.htmlnosoupforyou said:gougler08 said:Where are you seeing that? Or just hearing whispers?Comeby! said:
Who did EOG buy in the Eagle Ford? $275MM
https://www.hartenergy.com/exclusives/eog-resources-bolts-30000-acres-eagle-ford-275mm-212797
EOG Resources Bolts-On 30,000 Acres in Eagle Ford for $275MM
EOG Resources said it bolted on undeveloped core Eagle Ford Shale acreage in Atascosa County, Texas, and made a discovery offshore Trinidad.
It was Arrow S. Highly undeveloped because it's highly sour and not many takeaway options. They shopped it a few times.
30,000ppm is my understanding. Sounds like the operating family didn't know what they were doing at all.
Diamondback just announced they are laying 3 rigs down. I'm sure we will continue to see much more of that
was just coming to post that. Yep, the current environment should result in pullback from most everyone.
From the press release:
We are dropping three rigs and one full time completion crew in the second quarter and we expect to be at these levels through the majority of the third quarter. To use a driving analogy, we are taking our foot off the accelerator as we approach a red light. If the light turns green before we get to the stoplight, we will hit the gas again, but we are also prepared to brake if needed.
Should oil prices remain weak or further deteriorate, we will maintain this level of activity, with potential to reduce further if needed. Should the market stabilize and we see consistent oil prices above $65, we have the ability to ramp activity back to previous levels and potentially grow production volumes. Traditionally, we would use this lower service cost environment to build more DUCs ("Drilled but Uncompleted Wells"), but the cost of our largest drilling input cost, casing, has increased over 10% in the last quarter due to steel tariffs.
From the press release:
We are dropping three rigs and one full time completion crew in the second quarter and we expect to be at these levels through the majority of the third quarter. To use a driving analogy, we are taking our foot off the accelerator as we approach a red light. If the light turns green before we get to the stoplight, we will hit the gas again, but we are also prepared to brake if needed.
Should oil prices remain weak or further deteriorate, we will maintain this level of activity, with potential to reduce further if needed. Should the market stabilize and we see consistent oil prices above $65, we have the ability to ramp activity back to previous levels and potentially grow production volumes. Traditionally, we would use this lower service cost environment to build more DUCs ("Drilled but Uncompleted Wells"), but the cost of our largest drilling input cost, casing, has increased over 10% in the last quarter due to steel tariffs.
What do you boys want for breakfast BBQ ?.....OK Chili.
Cartographer said:
Apparently the argument Trump is putting forward is that $30 oil will stop Russia's ability to wage war. So I don't think this is just OPEC trying to crush US output. (Just another data point)
That said.
Please no.
I read an industry note this morning that Saudi Arabia is doing this at Trump's direction. Something to the effect of "Increase production or U.S. military will cease stabilizing efforts in Middle East."
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