Kolibri Global Energy Inc BNKPF

us wti curve

[Carbonbull]

Hedge funds are building speculative length in the first few contracts/months. They added the most length in the last two years last week with total net-length is now at 154 mmbbls in the oil complex.  That bids up the front of the curve.  Producers are selling forward keeping pressure on the back. There is even some longer term hedging (>5 yrs) likely driven by financing structures.  Given this dynamic, I don’t think backwardation will change any time soon.

The market is responding to the Permian basin be to a large extent debt financed , until this changes and equity holders take control again we will continue to have backwardation. Best trade from a stock standpoint is to find companies that dont have the unreasonable hedge requiremnets and can respond to a torque in the price of oil....

[BrokerG]

Hello Carbonbull Backwardation is the result of an imbalance in supply and demand. If the market is currently experiencing a shortage of supply, backwardation will result. How a few oil companies in the US are financed is an extremely small piece of this process. Backwardation was most likely caused by the recent OPEC agreement to limit supply. This will eventually correct itself and normal

[Carbonbull]

Broker G, There are many factors that cause backwardation , the most important one was the elimination of speculative capacity in the physical swap market , where once mighty balance sheets played now only strategic balance sheets play , less capital to support a speculative view is the number one reason.  The major player in the world is now BP trading tear apart the finacial statements

[himmler]

yes Bull,you are right with hedge funds building oil positions again.Theres a few reasons for this the way I see it. First of all there really is no other investing space to make money.Oils been clobbered for so long and in the meantime other sectors have stolen the spotlight.Tech ,gold,and in Canada weed stocks,renewables for example. Bond yields are terrible and some indexes are trading so high