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Jerre Foo, Corporate Development Executive, Silkroad Nickel

Jerre Foo
Corporate Development Executive | Silkroad Nickel
50 Armenian Street #03-04, 179938 Singapore (SGP)

enquiries@silkroadnickel.com

+65 6327 8971

Silkroad Nickel: 'The course is set for dynamic profit growth.'


Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

Dr. Thomas Gutschlag
CEO | Deutsche Rohstoff AG
Q7, 24, 68161 Mannheim (D)

info@rohstoff.de

+49 621 490 817 0

Interview Deutsche Rohstoff AG: "We can imagine additional investments in the field of electromobility."


Steve Cope, President, CEO and Director, Silver Viper

Steve Cope
President, CEO and Director | Silver Viper
1055 W Hastings St Suite 1130, V6E 2E9 Vancouver (CAN)

info@silverviperminerals.com

+1-604-687-8566

Interview with Silver Viper: Future price drivers and takeover fantasy


10. March 2020 | 11:40 CET

Baytex Energy, Husky Energy, Saturn Oil & Gas - why Canadian oil now?

  • Oil
Photo credits: pixabay.com

The oil industry around the globe had an unexpected start to the week, marked by a collapse in the price of oil. Last Friday, WTI was still trading at over USD 41.00 per barrel and at the start of the week the price fell briefly to below USD 28.00 per barrel. This was preceded by the announcement that Saudi Arabia will increase its production volume because Russia will not participate in a joint cutback. The defiant reaction of Saudi Arabia sent the oil price and the stock markets around the globe into a downward spiral.

time to read: 2 minutes by Mario Hose


Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG

Full interview

 

Author

Mario Hose

Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.

About the author


World economy as a plaything

There is much room for speculation about the motives and reasons why Russia and Saudi Arabia have not come up with a common ground to curb the amount of oil. The reason for the talks was the decline in demand for oil in connection with the Corona crisis. One possible common reason was that they wanted to slow down the USA, now the largest oil producer. A large part of US production is obtained through cost-intensive fracking, and a low oil price makes the development of new fields uneconomic.

OPEC and Russia miss profits

However, this type of predatory pricing is not cheap. After all, the OPEC countries hold around 80% of global reserves. Since 1960, the population of these countries has risen from less than 100 million people to over 500 million. In countries with a diversified economy, the price of oil plays a more subordinate role than in the producing countries, which are still dependent on the price of 'black gold'.

In 2018, the USA produced around 11.0 million barrels of oil per day. Russia produced around 10.5 million barrels per day in the same period and Saudi Arabia around 10.3 million barrels per day. Of these three countries the economy of the USA is the most broadly based and therefore Russia and Saudi Arabia are currently hurting themselves and the OPEC countries substantially with the lost profit.

Hedging protects the oil market

On the Canadian stock markets, oil producers came under enormous pressure. The market value of Baytex Energy collapsed by 40% to CAD 353 million and Husky Energy fell by over 30% to CAD 3.5 billion. The value of Saturn Oil & Gas declined by 21.7% to CAD 21 million - an amount that is probably not far from the total revenue in 2019. Given that oil producers usually hedge their future production volumes in connection with credit financing at an already agreed price, the price collapse on Monday will hardly be felt in the short term. For investors who assume that the low oil price will only be temporary, the price declines are an excellent entry opportunity.

Importance of the producing countries will increase

In view of the fact that Canada is in a much better position than most OPEC countries when it comes to protecting human rights and the environment, it will only be a matter of time before one or the other oil-producing country is frowned upon by society. Then also the import of OPEC oil to Canada for the mentioned reasons should find an end. Anyone who wants to position themselves in the oil sector with shares will find attractive opportunities in Canada under ethical and moral aspects in the current environment.


Author

Mario Hose

Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.

About the author



Conflict of interest & risk note

In accordance with §34b WpHG we would like to point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH may hold long or short positions in the aforementioned companies and that there may therefore be a conflict of interest. Apaton Finance GmbH may have a paid contractual relationship with the company, which is reported on in the context of the Apaton Finance GmbH Internet offer as well as in the social media, on partner sites or in e-mail messages. Further details can be found in our Conflict of Interest & Risk Disclosure.


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BP, Saturn Oil + Gas, BASF - Fuel for the portfolio: lots of good news!

  • Oil

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  • Oil

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Gazprom, BP, Saturn Oil + Gas: Which oil stock is the best?

  • Oil

The oil price has long since left the crisis behind. Even though North Sea Brent crude prices have fallen somewhat in recent days, the outlook remains bright. At a time when everyone is talking about renewable energy, market experts emphasize that fossil fuels will continue to play an important role in the world. The energy transition is a process, not an event. Above all, oil producers that act sustainably could continue to score points. We present three stocks.

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