Obsidian Energy Ltd T.OBE

0il Build & Renewed Iran Talks Impact On Oil Will Not Last

[geezer21]

This weeks build in U.S. oil stocks and news that Iran talks are back on depressed oil prices today. These were just jerk-knee reactions that will reverse by tomorrow because they do not change the supply/demand situation.

This weeks inventory build was down from the prior week.  The draw down on oil supplies are increasing with a rebound from COVID-19 and electrical generators switching over from gas to oil and other factors. U.S.  oil stocks are reaching a 5 year lower limit - see link below.

Oil production physically cannot be ramped up because of under investment over the past number of years.  Banks and investors are reluctant to inject capital into shale oil producers only to revisit past losses and now want a return on those investments.  OPEC is reluctant to ramp up production any farther and it appears they physically cannot even if they wanted to.

Iran is finding new comfort from both China and Russia so they are not motivated to compromise to U.S. demands. So do not expect removal of U.S. sanctions overnight.

Here is some reading:

https://www.zerohedge.com/energy/wti-holds-losses-after-big-crude-build-cushing-stocks-plunge

https://www.zerohedge.com/energy/oil-drops-iran-announces-nuclear-talks-west-resume-next-month

https://www.reuters.com/business/energy/opec-sees-oil-demand-rebounding-then-plateauing-after-2035-2021-09-28/

https://oilprice.com/Energy/Energy-General/Oil-Prices-Will-Remain-High-For-Years-To-Come.html

https://www.arcenergyinstitute.com/wp-content/uploads/211018-Energy-Charts.pdf

[Hendrick3]

I think these sudden pull backs are due to cautious investors putting in tight stop losses. The sudden and abrupt selling late in the day seem very much like stop loss selling. The electronic/ algorithm traders seem to know the break point very well. This is the 5th such rapid pull back in the last 3 weeks. The more it works, the more they do it. Cannot wait for 3q results to get a new closing

[JohnJBond]

As for oil - today saw a build in US oil stocks - becaase the US imported more Oil.........lol  (can you say smoke and mirrors) More importantly Cushing Inventories fell, and are getting surprizingly close to the panic level. I suspect oil will be back on the advance very soon once the smoke clears.