Husky Energy Inc. cumulative redeemable preferred T.HSE.PR.B

Saudis declare war

[autofocus111]

It's official. A price war has begun. Oil is going to tank hard.

>>>Saudi Arabia plans to increase oil output next month, going well above 10 million barrels a day, as the kingdom responds aggressively to the collapse of its OPEC+ alliance with Russia. The world’s largest oil exporter started a price war on Saturday by slashing the prices it sells crude into foreign markets by the most in at least 20 years, offering unprecedented discounts in Europe, the Far East and the U.S. to entice refiners to purchase Saudi crude at the expense of other suppliers. At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record of 12 million barrels a day... But on Saturday, Aramco told customers it was slashing official prices by $6-$8 a barrel across all regions. The dramatic move will resonate beyond Saudi Arabia...In the most significant move, Aramco widened the discount for its flagship Arab Light crude to refiners in north-west Europe by a hefty $8 a barrel, offering it at $10.25 a barrel under the Brent benchmark. In contrast, Urals, the Russian flagship crude blend, trades at a discount of about $2 a barrel under Brent. Traders said the Saudi move was a direct attack at the ability of Russian companies to sell crude in Europe. “This is going to get nasty,” said Doug King, a hedge fund investor who co-founded the Merchant Commodity Fund. “OPEC+ is going to pump more, and the world is facing a demand shock. $30 oil is possible.”

https://www.bloomberg.com/news/articles/2020-03-07/saudis-plan-big-oil-output-hike-beginning-all-out-price-war

[bmeister2]

Well I hope to fock both the ruskies and c. jockeys royally screw each other with their greed and manipulation over decades. U.S. and Canada, (if the fluff in Canada will support natural resources,) don't need those clowns anyways. Saudis need 80 dollar oil to balance budget so PAIN is the best medicine to get world prices back to normalcy,say,60-80 where it really does belong. But more pain

[mrbb]

maybe this time OPEC can kill off the shale oil 

[oilandgasmick]

Its going to be another very tough week for energy investors but if you have some dry powder and a good deal of patience then it could be a very good opportunity. HSE will still be afloat long after many of their U.S.and Canadian rivals are toast. Like you say, hopefully this will be the beginning of the end for the shale frackers.

[bgk135]

The Saudi's marginal cost per bbl is under $10. Them need in $80 is just a number speculators throw when trying to be optimist about a province where 97% of Alberta's reserves require a mining operation/steam/chemicals just to get a sludge to send to an upgrader/refinery. The Saudi's can sustain $50B plus deficits for as long they have reserves in the ground to borrow against it. Maybe

[bmeister2]

You have some points I agree with but I don't know how long the Saudie people will put up with the deficits because that is their TOTAL economy they are playing with and their psychopath young pretender to the throne doesn't need to much unrest. I am sure his old buddy,Trump, will be calling if frackers and U.S. jobs are circling the drain just above the Covid virus. What a focken mess

[wheeloffortune]

I think it's a bluff in order to get the Russians back to the OPEC+ table and the US on their side in raising oil prices.  Why sell more of a finite resource cheaper?  No way you're not going to pay a premium on additional workers, equipment and tankers to ship the product to increase oil output.  It's a short-term bluff.  They'll be back to the table sooner

[lashing]

I hope you are right. However, Russia can do alot of damage sticking to the price war that the USA and Saudi Arabia cannot endure. My guy tells me this is going on all year and I just lost 90% of my money.

[oilandgasmick]

Its a partial bluff but no way does anybody force Putin to cave in before he's ready. His image as the Kremlin's strong man is the key to his hold on power. If history is any guide (see Saudi Arabia versus Venezuela, 1998-2000) then the price war is around 2 years but I can't see it going that long this time. American frackers will continue to pump every barrel they can in defiance

[mrbb]

my guess is saudi would have talked to trump about their plan against russia as oil price collapse also hurted US shaler.   US frackers will frack until their hedges run out. The pension fund won't be fool this time to lend more money to frackers.  I think this time US frackers won't able to endure the price crash like the last price crash.   

[firstworld]

All self made smart money left Canada when liberals and NDP stepped in. Unfortunately Canadians always short term make nothing of value. Russians can withstand $25-30 for 10-15 years while no one else can. Glad I bought into China heavy in last two weeks because cheap oil is exactly what any high value add economy needs to prosper. There is always opportunity in distress wonder how many AB or SK