Another rough day tomorrow?Like we need it!!!
Could be with the Chinese apparently walking out early from trade talks. Oil is down around 1% or at least not as bad as when first reported.
Today there was hope as they were apparently looking for a partial deal despite recent sanctions and the market rallied. Obviously Canadian E&P didn't participate. U.S. energy did much better.
The concern for us right now seems to be that widening of WCS differential. What is interesting is that it is now at around $16 U.S. or exactly what they were mentioning as necessary to encourage crude by rail or offset its cost vs pipelines. Also right in line with pretty much every analyst forecast. True, WTI is now lower at around $52 but, FX is a big plus at just under 75 cents and the spread on light is still at around $5 U.S.
I am wondering when this will ever end? Seems like the Chinese and Americans will never come to a true deal.
At the same time, these companies are pricing in the next 3 recessions and oil in mid-30's? I mean, $25,000 per flowing, low debt level, low decline rate, a fraction of PDP NAV. I have not looked at it but, we must be at or less than PDP NAV at strip which is nuts!