DarterBlue Posted April 20, 2020 Report Share Posted April 20, 2020 The price of oil, as I type this is at decades old lows, having crashed about 29% overnight. On the other side of the ledger, stocks have now retraced over 50% of their bear market lows, even despite trading down over a percent and a half in pre-market trade. Oil seems to be forecasting a depression; stocks seem to be forecasting a speedy end to Covid-19 and a return to something approaching normality. Clearly, at least to me, both can't be right. It takes a better mind than mine to comprehend this divergence. For one of the two must be a screaming buy while the other must be a compelling short. Thoughts? 1 Quote Link to comment Share on other sites More sharing options...
Troll Posted April 20, 2020 Report Share Posted April 20, 2020 8 minutes ago, DarterBlue said: The price of oil, as I type this is at decades old lows, having crashed about 29% overnight. On the other side of the ledger, stocks have now retraced over 50% of their bear market lows, even despite trading down over a percent and a half in pre-market trade. Oil seems to be forecasting a depression; stocks seem to be forecasting a speedy end to Covid-19 and a return to something approaching normality. Clearly, at least to me, both can't be right. It takes a better mind than mine to comprehend this divergence. For one of the two must be a screaming buy while the other must be a compelling short. Thoughts? Maybe it's just the 'petro-dollar' in jeopardy.... 🤔 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 1 minute ago, Troll said: Maybe it's just the 'petro-dollar' in jeopardy.... 🤔 Maybe, but if that's the case, there are other implications many of which directly affect us. Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 17 minutes ago, Troll said: Maybe it's just the 'petro-dollar' in jeopardy.... 🤔 Also shocking is the divergence between North Sea oil and the Merc. Clearly, this is not normal activity. Quote Link to comment Share on other sites More sharing options...
Troll Posted April 20, 2020 Report Share Posted April 20, 2020 1 hour ago, DarterBlue said: Maybe, but if that's the case, there are other implications many of which directly affect us. true... Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 4 hours ago, Troll said: Maybe it's just the 'petro-dollar' in jeopardy.... 🤔 What I find troubling, but not particularly surprising, is the fact that aside from your response, not a single other person on this board has a comment, (perhaps lack of thought), on the move made by oil today. To me it reflects the general ignorance of the American public of things that should be at the forefront of their thought. It is not surprising given the type of media landscape that exists here, but on some level it is profoundly disturbing. It is also, perhaps, why the country can be conned, time and time again, to support foreign conflicts without as much as a peep, as few have even an inkling as to why we choose that path in the first place. Quote Link to comment Share on other sites More sharing options...
15yds4gibberish Posted April 20, 2020 Report Share Posted April 20, 2020 2 hours ago, DarterBlue said: What I find troubling, but not particularly surprising, is the fact that aside from your response, not a single other person on this board has a comment, (perhaps lack of thought), on the move made by oil today. To me it reflects the general ignorance of the American public of things that should be at the forefront of their thought. It is not surprising given the type of media landscape that exists here, but on some level it is profoundly disturbing. It is also, perhaps, why the country can be conned, time and time again, to support foreign conflicts without as much as a peep, as few have even an inkling as to why we choose that path in the first place. I gotta be honest with you Blue, this story confuses me. I wanted to post about it last week because I thought it was deeply strange that IMPOTUS would brag about making a deal that would basically raise gas prices when ~17M Americans had just filed for unemployment.... Link to story last week: https://www.nytimes.com/2020/04/12/business/energy-environment/opec-russia-saudi-arabia-oil-coronavirus.html So clearly, whatever President Deals thought he accomplished and was bragging about last week isn't working at the moment. Even so, I still don't get it. Apparently it has something to do with storage space and futures contracts that are up tomorrow, but today's plummet still seems way out sized...this one is definitely a stay tuned ... todays article: https://www.nytimes.com/2020/04/20/business/stock-market-live-trading-coronavirus.html#link-a677d6a Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 12 minutes ago, 15yds4gibberish said: I gotta be honest with you Blue, this story confuses me. I wanted to post about it last week because I thought it was deeply strange that IMPOTUS would brag about making a deal that would basically raise gas prices when ~17M Americans had just filed for unemployment.... Link to story last week: https://www.nytimes.com/2020/04/12/business/energy-environment/opec-russia-saudi-arabia-oil-coronavirus.html So clearly, whatever President Deals thought he accomplished and was bragging about last week isn't working at the moment. Even so, I still don't get it. Apparently it has something to do with storage space and futures contracts that are up tomorrow, but today's plummet still seems way out sized...this one is definitely a stay tuned ... todays article: https://www.nytimes.com/2020/04/20/business/stock-market-live-trading-coronavirus.html#link-a677d6a POTUS (IMPOTUS), was trying to save the US oil patch from a catastrophic loss of jobs. As you may be aware, with the advent of fracking, the USA has gone from being a net oil importer on a large basis, to being a net oil exporter. Unfortunately, most of our oil, even with fracking, which is more cost effective, is still relatively expensive. If oil stays below $20 per barrel for any extended period, that's the end of our oil industry. 1 Quote Link to comment Share on other sites More sharing options...
stanscript Posted April 20, 2020 Report Share Posted April 20, 2020 A lot of small oil companies and frackers will go out of business at these prices. Consolidation will be rampant as energy companies fight to avoid bankruptcy. States like Texas, Oklahoma, Louisiana and North Dakota are going to be severely hurt if these oil prices remain low for a moderate to long period of time. While generally low oil prices help the overall economy, the economies in the above stated states will be significantly hurt. Trump needs at least a moderate oil price in these states to keep his base. If the Texas economy starts to dip or falter, it could be really bad news for Donald. 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 2 minutes ago, stanscript said: A lot of small oil companies and frackers will go out of business at these prices. Consolidation will be rampant as energy companies fight to avoid bankruptcy. States like Texas, Oklahoma, Louisiana and North Dakota are going to be severely hurt if these oil prices remain low for a moderate to long period of time. While generally low oil prices help the overall economy, the economies in the above stated states will be significantly hurt. Trump needs at least a moderate oil price in these states to keep his base. If the Texas economy starts to dip or falter, it could be really bad news for Donald. I agree with all you said except the last sentence. I genuinely believe that Trump's base is rock solid and that the only way to beat him is to expand turnout, particularly in five or six swing states. He was not kidding when he said he could shoot someone in the middle of 5th Avenue and it would have no effect on his base. The man is a genius when it comes to understanding his supporters. 1 Quote Link to comment Share on other sites More sharing options...
15yds4gibberish Posted April 20, 2020 Report Share Posted April 20, 2020 24 minutes ago, DarterBlue said: POTUS (IMPOTUS), was trying to save the US oil patch from a catastrophic loss of jobs. As you may be aware, with the advent of fracking, the USA has gone from being a net oil importer on a large basis, to being a net oil exporter. Unfortunately, most of our oil, even with fracking, which is more cost effective, is still relatively expensive. If oil stays below $20 per barrel for any extended period, that's the end of our oil industry. Blue, I defer to you, but I still don't get it. Oil and Gas extraction in this country only employs about 150,000 people. That's a pittance compared to ~22M jobs lost (now). It really looks more like protecting investor class capital rather than saving American jobs. Quote Link to comment Share on other sites More sharing options...
stanscript Posted April 20, 2020 Report Share Posted April 20, 2020 26 minutes ago, DarterBlue said: I agree with all you said except the last sentence. I genuinely believe that Trump's base is rock solid and that the only way to beat him is to expand turnout, particularly in five or six swing states. He was not kidding when he said he could shoot someone in the middle of 5th Avenue and it would have no effect on his base. The man is a genius when it comes to understanding his supporters. Well, you may be right. However, a decline in the Texas economy might prompt independents who might have voted for Trump in 2016 to change their vote in 2020. It might also prompt Democrats that weren't crazy about Hillary and didn't vote for her to make sure their vote counts this time. It will be interesting to see how this all plays out in November. We aren't even in October and it seems like we get the "October surprise" almost on a daily basis. Who would have predicted millions unemployed, practically every restaurant in America being shut down, a bear market, massive more federal debt, oil around or under $10 a barrel, 41,000 deaths and more 3 months ago? 2 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 18 minutes ago, 15yds4gibberish said: Blue, I defer to you, but I still don't get it. Oil and Gas extraction in this country only employs about 150,000 people. That's a pittance compared to ~22M jobs lost (now). It really looks more like protecting investor class capital rather than saving American jobs. It's both. Oklahoma, Texas, Louisiana, etc., are bright red states he needs to win. In these states, there are a lot of good to decent paying jobs in the industry. But, yes, first and foremost, he is protecting business interests, of which he has a lot of support in the oil (and coal) industries. 1 Quote Link to comment Share on other sites More sharing options...
DarterBlue Posted April 20, 2020 Author Report Share Posted April 20, 2020 8 minutes ago, stanscript said: Well, you may be right. However, a decline in the Texas economy might prompt independents who might have voted for Trump in 2016 to change their vote in 2020. It might also prompt Democrats that weren't crazy about Hillary and didn't vote for her to make sure their vote counts this time. It will be interesting to see how this all plays out in November. We aren't even in October and it seems like we get the "October surprise" almost on a daily basis. Who would have predicted millions unemployed, practically every restaurant in America being shut down, a bear market, massive more federal debt, oil around or under $10 a barrel, 50,000 deaths and more 3 months ago? It is a grim picture. If he gets reelected, it would be one for the record books. But while I hate to admit it, I think he has at least a 50/50 shot. Quote Link to comment Share on other sites More sharing options...
stanscript Posted April 21, 2020 Report Share Posted April 21, 2020 5 hours ago, DarterBlue said: It is a grim picture. If he gets reelected, it would be one for the record books. But while I hate to admit it, I think he has at least a 50/50 shot. Yes, I'm not saying that it will defeat Trump by any means but it does tend to make it a closer race. You can imagine how much worry there is in the smoke filled rooms of the right wing. If the public blames the Republicans for this mess as they should, there could be a super huge 2020 Blue Wave that makes the 2018 Blue Wave look like it started in a tea cup. This country is in for an unprecedented roller coaster ride in the next 6 months, at least. 1 Quote Link to comment Share on other sites More sharing options...
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