WTI Price vs. The Houthis

[sundance]

With all the disruption and uncertainty going on in the Red Sea -- why do you think price of WTI hasn't moved up more?

[dan_s]

1. Rising U.S. oil production being reported by EIA. I do think U.S. oil production will begin to decline as we move deep into January. Why? Lots of wells are completed in November and December to get them into the year-end stats and winter weather will impact well completions in January and February. As I mentioned in the newsletter, the belief that U.S. oil production can keep going up is a False Paradigm. The Permian Basin is the only major oilfield with production upside and it will be peak soon.

2. The war in Gaza has no direct impact on oil supply. Houthis attacks on ships going through the Red Sea has minimal actual impact and many people now believe the U.S. navy will eventually put an end to it.

3. Demand for transportation fuels declines after the holidays. Hang tough, demand will go a lot higher in Q2.

[marc.wolin@yahoo.com]

Oil Prices - I love the Stalking Horses theory, what about a White Horse or is that a White Knight? Wall Street just seems to bypass these companies! They either cannot read a financial statement correctly, or don’t want the production and inventory. These potential buyers must look at the long-term? If the prices are so low, why would they wait for them to go up? The bigger companies make long-term plans.
A quarter would not hold them off. Even smaller companies should want a low price. Afraid of a bidder’s war, I would like to see that.

Marc Wolin

[marc.wolin@yahoo.com]

Oil prices- I would name these small oil cos. “Slow Horses” in honor of the excellent series on Apple TV staring Gary Oldam. I can see potential buyers waiting until fourth quarter earnings are out.
Marc Wolin