Forget $100, Options Traders Now Betting On Oil Prices Hitting $200
By Tsvetana Paraskova - Oct 19, 2021, 7:00 PM CDT
$100 Oil is no longer an ‘outrageous’ bet in the call-options market
Some speculative traders are now betting on $200 oil in December 2022
For those betting on $100 oil, the leader of the OPEC+ alliance, Saudi Arabia, has a message: look beyond the end of this year; an oversupply is coming next year

Even after hitting the highest levels in several years in recent days, oil prices have further room to rise this winter. At least short-term market fundamentals suggest so, analysts say. Inventories around the world have fallen to below the pre-pandemic five-year average as stocks are depleting, with demand bouncing back amid a weaker supply response from producers. The energy crunch in Europe and Asia and record-high natural gas and coal prices add more arguments to the bullish case for oil in coming months as a switch from gas to oil products such as fuel oil and diesel, especially in Asia, is already underway.

The structure of the oil futures curve a year from now also points to a tight market and headroom for higher crude prices.

Stocks Draw As Demand Rebounds

On the demand side, recovering economies and mobility have boosted global oil demand in recent months, leading to inventory drawdowns that have reduced global stocks to below recent averages.

In both the United States and the OECD developed economies as a whole, commercial oil stocks have dropped to below pre-COVID five-year averages after more than reversing the huge builds from the spring and summer last year, Reuters market analyst John Kemp notes.

As of the latest reporting week, U.S. commercial crude oil inventories stood at 427 million barrels, around 6 percent below the five-year average for this time of year. Gasoline inventories were about 2 percent below the five-year average, distillate fuel inventories were 9 percent lower, while propane/propylene inventories were a massive 21 percent below the five-year average for this time of year, the latest EIA data showed.

In OECD, commercial stocks in August were 162 million barrels below the pre-COVID five-year average, the International Energy Agency (IEA) said in its latest monthly report last week. Preliminary data for the U.S., Europe, and Japan show on-land industry stocks fell by a further 23 million barrels in September.

Related: Exxon Considers Abandoning Major Oil And Gas Projects To Appease ESG Investors
Globally, implied Q3 refined product balances “show the largest draw in eight years, which explains the strong increase in refinery margins in September despite significantly higher crude prices,” said the IEA.

The energy crisis in Europe and Asia could additionally boost global oil demand by 500,000 barrels per day (bpd) compared to a “normal” market without a natural gas and coal crunch, the agency noted, raising its 2021 and 2022 global oil demand forecasts.

Supply Lags Demand As OPEC+ Keeps Market Tight

While demand has rebounded despite the summer COVID flare-ups in the U.S. and Asia, supply additions to the oil market have been lagging behind the pace of growing demand.

First, it was Hurricane Ida that limited U.S. oil supply from the Gulf of Mexico from the end of August through most of September. Supply will not recover to its full capacity until early next year, as a Shell-operated platform will remain offline until the end of 2021.

At the same time, the OPEC+ group continues to keep the market tight, adding just 400,000 bpd each month to its overall supply. That’s despite calls from the U.S. and other consuming nations to open the taps and tame the high oil prices, and despite the energy crisis which has forced utilities to fire up oil-fueled power generation amid record-high natural gas prices, boosting demand for oil products.

OPEC+ leaders point to expected oversupply next year and to the need to look beyond the next two months in their decision to continue to reverse only 400,000 bpd per month of their cuts.

Saudi Energy Minister, Prince Abdulaziz bin Salman, last week basically ruled out the option that the alliance would respond to the oil price rally by adding more supply than planned.

“We should look way beyond the tip of our noses. Because if you do, and take ’22 into account, you will end up by end of ’22 with a huge amount of overstocks,” he said on Thursday.

Related: Oil Prices Dip As China Considers Market Intervention

Moreover, output figures point to the fact that OPEC+ is actually pumping well below its collective production ceiling. As per Bloomberg’s estimates, if all members of the alliance stuck to their respective production ceilings in September, the overall production of the group would have been 747,000 bpd higher than what it was.

It looks like OPEC+ is not too worried about demand destruction at $85 oil, at least not for now. The group’s leaders stress the importance of a longer-term vision and stability on the market, expecting increased supply in 2022 from both their own wells and from the U.S. shale patch, which appears to be maintaining its capex discipline even at $80 oil.

‘Blowout’ Backwardation Points To Even Higher Oil Prices

At the end of 2021, however, supply remains tight, while backwardation—a key indicator of a tightening market—between the December 2021 Brent contract and the December 2022 contract h

SHould propose to the board to change the company name to "VELEFAST" !! LOL

Hope "very slow" will explode into "very fast" eventually !!!

"Very Slow" will slowly and steadily WAKE UP !!

This is a Velesto ("very slow") oil counter !!!!!

Uncle Koon is super lousy in international political anaylsis !
His heavily-biased pro china's posts don't know want to make me laugh or cry ?
can somebody please ask him to do more reading and research before he write on international polictic ? sounds like a kindergarden level to us !!! ><

dividend to be paid on 8-10-21

The borrowing is cut to half with net gearing 0.1x !
meaning shareholders no need to worry about this company going bankrupt or issuing rights issue to ask for more money from shareholders !!

Insurance money help to reduce debts + increase rig utilisation rate during slow economic time !!

Utilisation outlook remains weak; sinking of Naga 7 could be a blessing in disguise. In line with Petronas’ activity outlook, local demand for jack-up rig is still expected to remain weak in the coming 1- 2 years. Nonetheless, given the thinning of its fleet follow Naga 7’s demise, coupled with some upcoming short-term jobs, we believe upcoming quarters could see higher rig utilisation numbers. Overall, the sinking of Naga 7 could prove to be a blessing in disguise. With the incoming influx of cash from the insurance claims, the money could be used to pare down almost half of its borrowings – potentially lowering its net gearing to 0.1x from 0.4x currently. This could give the company the much-needed headroom to ride through the current tough market conditions while awaiting a recovery. Additionally, a smaller fleet would also ensure higher utilisation rates, especially considering current difficult market conditions.

Amanahraya back to sapu-ing !!
Good sign !!

summary of the hearing :- During hearings held in June 2021, witness testimonies described observing or experiencing mass torture, rape (including gang rape), forced sterilization, forced abortion, forced administration of medications that stopped women from menstruating, arbitrary arrest and detention, mass surveillance, intimidation by government officials, and forced child separation.[3][5][9][10][11][71][74] Evidence presented also included testimony of sexual harassment of women by Chinese agents, retaliation by the Chinese government against relatives of Uyghurs living abroad, the physical destruction of homes with families that "had more births than allowed", and other abuses.[9][71][74]

China denies that it has committed human rights abuses within Xinjiang, including within the Xinjiang internment camps, and disputes the legitimacy of the testimonies.[5][14]

https://en.wikipedia.org/wiki/Uyghur_Tribunal

go and do more research and see whether China did violate human rights
and the hearing is conducted live broadcast to the whole wolrd in youtube in early June, 2021 and more evidence will be revealed in September.

https://klse.i3investor.com/blogs/philip6/2021-08-12-story-h1569709725-the_intrinsic_value_of_Hartalega.jsp

a value investing guru has openly supported this company !!

Velesto got potential in recovery play in 2021 2nd half !!
according to CGS-CIMB

5. Recovery plays
These are companies under its ‘add’ call with the highest potential earnings recovery on an absolute basis in 2022 compared with 2021 levels — including those recovering from losses.

“The top five stocks that fit the screening of our definition of growth stocks and offer highest upside to our target prices are Genting (TP: RM6.90), Magnum Bhd (TP: RM2.30), Media Chinese International Bhd (TP: 21 sen), Velesto Energy Bhd (TP: 19 sen) and Genting Malaysia Bhd (TP: RM3.20),” the research house said.

https://www.theedgemarkets.com/article/7-trading-themes-bursa-2h2021-according-cgscimb

Kuan's family has been rated the best management in Bursa, have faith with them, hold long term on this company, you will be rewarded !!
remember, amongst all glove players, they still the number 1 in terms of profit margin due to thier brilliant cost management with efficient automation. during oversupply situation, they can just cut selling price and let other inefficient players close shop !!

If Kuan family all resigns, Harta will drop to 1.00 !!

The only hope for this "Veryslow" is when insurance company agrees to compensate them for sinked Naga ! It is a blessing in disguise !
According to one analyst's research, the compensation sum could be more than the sinked Naga's net book value (as the prudent management has been written off huge book value thru out the years) , if this happen , they will record huge "exceptional gain" on thier book value + huge cash from insurance could partly settle their outstanding loan liability or give them healthy cashflow to move forward !
Long term investors shall hold and wait for this good news to be released ! By that time then more analysts will start cover Veryslow and queueing up to raise TP to 0.40-0.50 (pre-pandemic average TP)

My read is Veryslow is currently neglected due to uncertainty surrounding its sinked Naga and the insurance compensation.
I just checked , most "folk king stool pick" analysts cease coverage on this Veryslow pending new development of the above issue !!

If oil price back to super cycle and reach USD100, those buy oil counters at dirt cheap price will surely HUAT HUAT HUAT !

Veryslow's TP = 0.50 by year end, TP = 1.00 by 2022

KUALA LUMPUR (June 24): AmInvestment Bank Research has maintained its "overweight" rating on the oil and gas (O&G) sector for the next 12 months as crude oil prices have risen by 74% to US$75 per barrel currently from an average of US$43 per barrel in 2020, supporting a global resurgence in capex roll-outs and structural rerating prospects of independent exploration and production (E&P) producers and service providers.

Its analyst Alex Goh in a note today raised his 2021 to 2022 crude oil price projection by US$5 per barrel to US$65 to US$70 per barrel versus the 2021 year-to-date average of US$65 per barrel.

Goh also noted that based on a base case demand scenario premised on projects deemed likely to be sanctioned, Rystad Energy expects global liquids supply shortfalls of 22 million barrels per day (bpd) (22%) by 2030 and 28 million bpd (35%) by 2040.

"Hence, substantive global investments are still required over the next 10 to 20 years to stave off the projected supply deficit. In the absence of such investments, we expect another super bullish cycle, similar to the 2004–2007 run-up, which will drive crude oil prices to levels well above US$100/barrel," he said.

According to Goh, the value of final investment decisions (FID) in Southeast Asia for O&G projects is expected to surge by 3.5 times year-on-year this year to 700 million barrels of oil equivalent, and more than double to 1.7 billion in 2022.

"Malaysia will account for over 80% of Southeast Asia's FID in 2021 and 50% in 2022," he said.

Over the longer term, he said, deepwater investments are expected to be more prominent, peaking at US$6 billlion in 2027 from just US$2 billion in 2020.

He also noted, by 2024, deepwater projects will make up over 60% of the region's sanctioned resources.

Additionally, subsea tiebacks and floater solutions will gain traction as national oil companies optimise their capex under net-zero emission agenda, he added.

Outlook. We view that the outlook for Velesto is turning positive at this juncture despite its weak 1Q21 results as Velesto currently has 3 out of 6 of its available rigs working with another rig to commence mobilisation by the middle of June. The Company should see sequential improvements in its rig utilisation and profits towards the end of FY21. We forecast Velesto’s utilisation rate to come in at c.45% in FY21 and expect its cost savings initiative to mitigate any short-falls in utilisation rates. Velesto is working with the insurance underwriters and protection & indemnity (P&I) club on the way forward for Naga 7 as the rig and other related liabilities are adequately covered under the Hull & Machinery Insurance and the P&I club. We believe that Velesto would be adequately compensated for Naga 7 and we do not think that Velesto would replace its Naga 7 rig with a new rig.



My suggestion to Veryslow's board :- since the oil price is going up, use the insurance compensation money + bank loan to buy a new "Naga 8" to replace Naga 7 !!
when oil demand is shooting up, so will the charter rate, take the opportunity to ride the next oil & gas super cycle !!!

oil price UP, "Veryslow" DOWN !!

KNM 0.20, Armada 0.50, Sapura 0.14 !!!
Veryslow should have traded at 0.30 !!!!!
Where is the insurance compensation money ? once got paid , will be exceptional gain, or maybe declare some dividends and price shoot up !! (i hope and suggest to CEO)

CEO of Veryslow ! quickly bid for more rig contracts !!!!

other oil & gas counters already shooting UP but this Veryslow is still sleeping !!!!

Oil price up but "Very-slow" down !!!!
PKM

Calvin Tan's faulty analysis exposed !! LOL !

I haven't seen uncle phillips in I3 ages ago !
Maybe he has woken up already and dare not comment here anymore ??

calvin Tan. I remember your nemesis Uncle Phillips highly recommended it last year and could not stop promoting the company everyday, how is he doing ? dumping all shares already ??

Hope that the CEO or board work hard to secure more contarct for their rigs, fully utilize all their rigs then share price only can PECUT back to 40 cents !!!!!!!

Bursa's new norm :-
Quarterly result record profit , share price DOWN, (most gloves counters)
Quarterly result huge loss, share price UP !!

The reason for thsi company is :-

"Due to the (+ the lousy managment by the imcompetent Board & CEO), the Board is of the opinion that the financial performance for 2021 will continue to be challenging,"

Other oil & gas companies can report profit, where can't you ??? because of your lousy management !
Resign and balik kampung lah !!! Let a capable CEO to take over !!
LEt's go to the AGM and voice out this lousy CEO !!!!

this lousy GLC-running company can be another MAS in the making !!!
Loss so many years one day go private by offering 5 cent by PNB !!!
PKM punya company !!!!!

This company too heavily relies on Petronas !
If Petronas tak mahu cari gali , Velesto's result will be bungkus-ing !!!!!!!
Not like Armada, Sapura, KNM etc... venture overseas to win contract lah !!!

This company is really P K M liao !!!!!!

semua oil counters sudah berpecut, "very slow" masih tidur !!!!!

ini PKM punya company !!!!

Velesto = sound like " very slow" ! lol

This counter is crawling as slow as turtle !!

Ini PKM punya company !!!!

I guess Calvin Tan 's too many chun chun calls has left him chun chun bankrupted by his own chun chun calls !! lol

reach RM1.00 can laugh all the way to bank already lah !!

By end Feb, TP= at least 20, end March = 20-40, end 2021 (when oil price reaches 100), TP = 1.00 !!!!

kaunter ini lambat macam kura-kura . . . . . . z z z z

Even Sapura go overseas and get RM1.8bil contract, Velesto still getting zero contract ??? Apalah CEO ?? All rigs still under-utilized ? 30% only ??

Velesto s CEO shall go and approach other oil major to get rig contract, surely oil back to USD60, pre-covid level, many oil majors are interested to produce oils for good profit !!!

petronas 's lousy CEO, pls do sth and award rig contracts , oil price shoot up already still doing nothing ? tak mahu gorek oil kah ? Government makan apa ??