Baytex, Beer, Canada, and a long weekend On the topic of beer, I think BayStreetWolf should have a lot of Molson, or Moosehead, or whatever is best in Canada at this time, delivered to his home, by the case. The only condition, is that none of it should be provided to Turdeau!
What a great board this is. For the positive contributors, it is really enjoyable, and time saving. The group think, and group research, allows us all to cover more ground ,in a shorter period of time.
Looking at the sentiment, and frequency of posts, from the message board distorter crowd, I would summarize, people who need inventory, to manipulate, have lost ground this week. All attempts to convince people to sell, are not having the effect they hoped for. Volume is really low this week, and I would expect short volume to be high, relative the low volume.
I think they would have liked to drop this to $4.25, or even less. It didn’t get anywhere near that level. Options expiration weeks are not normal. This one was no different.
The tug of war in oil was even more spectacular. I am certain there are some really frustrated bears, that are ready to gnaw a foot off, to get out of the trap. I wanted oil to be higher than it closed this week, though I guessed it would finish at $90. Again, this guess was only based on observations and charts, nothing more. I guessed Baytex to finish at $5 Canadian, and I missed the mark a little. As of when I am writing this, it appears I missed by 3.0%.
This is all good news for long term Baytex holders. I doubt any long time bulls sold this week. Momentum traders of all durations, had only mild volatility to work with. I suspect long momentum positions we made today, for the next run. This is competition for inventory, and why they could not drive it any farther down.
Next week it will be different. A four day trading week, and earnings we know will be good. I am looking forward to it.
Options were surprising at a glance. There was a lot more action for March, than there was for February.
A lot of mention of Iran this week. Here is how I see it.
Iran has never stopped supplying markets with oil. Logistically, it is better for Iran to sell to China than most other places. There was only one report of an intercept of Iranian oil heading to Venezuela, that I can remember reading. If an Iran deal is made, it will only be a matter of sending it places they were not before, and for how much more, than they are already getting. The world based supply demand numbers will be no different than they were, and some regions might have their number increased, while others decrease by the same amount. No big deal here, like the media would have you think.
This is the result of what 8 years of minimal drilling, in the least expensive areas to drill, can do. There has not been much capital, allocated to exploration. DUC wells, that can be brought online in a short period of time, are going away fast. Other wells are 18 month, from idea to production. No way around that. The amount of rigs operating, is still so far from the peak in the last boom, it is not even 60%.
Oil is going to go higher, whether it’s immediate, or farther down the road. Oil at $90 plus, is still cheap, adjusted for inflation, relative to the last boom. There is no other alternative to oil, because the world economy is still dependent on oil and gas. A transition to electrification, in the next 10 years is not going to be what hopium crowd would like, because it is costly, and most of the world populations, are already so far in debt, they will not be able to afford it!
Baytex is just simply looking great!
RS