RE:RE:brexit and oil price dropping like a rockCDNAirforce wrote: Oil is dropping because $50 is a resistance. Oil companies (like BTE) are beginning to resume drilling, BREXIT, Rig count tomorrow and the realisation that disruptions such as Nigeria and Venezuala are temporary. A recession could most certainly happen especially in the EU if a vote were positive. The UK would have to seek out new trading partners and the sterling would suffer. If a recession occurs there is fear that oil won't be in as high demand. Everybody is worried about their positions in a time like this. Take a look at German bonds, in the negative now. IMO, ride out BTE for when the oil market balances in the near future. This company has the bankroll to make it through these times (depending how long of course) The downside to this company is that when it does recover they may not have the money to maintain their aging equipment. Other companies, such as Pengrowth, are in much worse financial shape. If you have the intestinal fortitude to invest in energy right now ride BTE, go longs!!!!
I agree with most of what you said maybe with the exception of the outages in Nigeria being temporary. It will be resolved at some point but I don't believe it will be anytime soon. The Niger Delta Avengers vow to bring Nigeria's oil production to 0. They are planning an executing attacks steadily and they are intensifying saying that they could take human lives in the future. This isn't going away short term. Regarding global oil outages, I think people are assuming that everything is back in full swing in the oil sands. Syncrude's Mildred Lake facility, Canada's largest oil producing site, who are capable of producing up to 15% of Canada's oil, are pumping NOTHING right now. Next door at Suncor's base plant(Canada's 2nd largest oil producing site, they are producing a small amount. I estimate these outages at approximately 600k bpd. That is a significant amount of oil that the market is overlooking right now and seems to have forgotten about. We will still see inventory draws in the coming weeks which will support oil price. The main reason we are seeing this pullback is Brexit.