RE:RE:RE:RE:3 possible scenarios coming out of OPEC+@Iluvyellowsnow: If there is no agreement as to bringing on additional barrels starting August, the default is returning to the DOC, which involves no additional barrels.
As for your claim that OPEC+ members can bring upon spare capacity at will, this is simply inaccurate. Of the 23 OPEC+ countries only a small handful (six) countries that have any spare capacity available to them (Saudi Arabia, Russia, UAE, Kuwait, Iraq, Kazakhstan). There rest of the 23 countries are unable to produce more oil even if they wanted or were permitted to. In fact, based on the most recent OPEC report, at 114% OPEC had overachieved its compliance targets of the DOC. That means OPEC produced 14% less oil than it was permitted to? Why? Because many countries within OPEC cannot even extract the number of barrels they have been allocated due to chronic underinvestment.
As for Friday's trading action, of course it made sense for oil prices to remain flat. Traders were observing the outcome of the OPEC+ meeting. It was during the trading session when it was announced that no agreement had yet been reached and the meeting would continue on Monday. That's why oil prices neither spiked nor cratered.
While anything can happen on Monday, it is hard for me to believe that OPEC+ will let the whole DOC collapse after they have sacraficed so much to support it.
The anomoly we saw last April when WTI went negative for a few hours, were wholly based on derivatives trading in the WTI futures contracts (did you notice the same thing didin't happen to Brent?).
None of us are perfect investors. I have done incredibly well over the past year, but I sold my MEG, ARX and others to buy more CPG a bit too soon. I think that the market will eventually recognize the intrinsic value of this company.
I have no idea of what the oil market (or oil equities) will do come Monday morning. The OPEC+ meeting commences 30 minutes before the TSX opens. Between that and the US markets being closed, it's sure to be an interesting day. I bought additional shares of CPG on Friday at C$5.50. I hope to unload those additional shares Monday (but could wait till Wednesday). I really hope your WCP to CPG trade works out. Personally (and I am not putting down WCP here), I think CPG will trade at a higher share price than WCP.
Iluvyellowsnow wrote: I guess we'll have to agree to disagree on all members abiding by the DOC. If there is no agreement I think they will eventually start to put more barrels on the market instead of keeping the status quo. Russia wanted to increase capacity and they're not going stay on the sidelines for too long while the world demands more oil. Once any member of the alliance starts to increase capacity on their own others will follow. If the market viewed the failure to come to an agreement as a positive catalyst for higher oil prices why did oil go down Friday and not spike like you said. I understand that WTI closed only 7 cents lower but if they thought no more barrels would be added in the market why didn't oil spike?
The markets are not logical as was seen last year when oil went negative. I really realy hope that you're wright and that I'm wrong. I sold my WCP holdings Thursday and bought CPG that same day. Buying CPG and dumping WCP reminds me of the line in the movie Airplane "I guess I took the wrong day to quit amphetamines"
We'll see Monday. too bad U.S. markets are closed.