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Dirk Graszt, CEO, Clean Logistics SE

Dirk Graszt
CEO | Clean Logistics SE
Trettaustr.32, 21107 Hamburg (DE)

info@cleanlogistics.de

+49-4171-6791300

Interview Clean Logistics: Hydrogen challenge to Daimler + Co.


Matthew Salthouse, CEO, Kainantu Resources

Matthew Salthouse
CEO | Kainantu Resources
3 Phillip Street #19-01 Royal Group Building, 048693 Singapore (SGP)

info@krl.com.sg

+65 6920 2020

Interview Kainantu Resources: "We hold the key to growth in the Asia-Pacific region".


Justin Reid, President and CEO, Troilus Gold Corp.

Justin Reid
President and CEO | Troilus Gold Corp.
36 Lombard Street, Floor 4, M5C 2X3 Toronto, Ontario (CAN)

info@troilusgold.com

+1 (647) 276-0050

Interview Troilus Gold: "We are convinced that Troilus is more than just a mine".


06. May 2020 | 05:57 CET

BP, Exxon, Shell, Saturn Oil & Gas - Crude oil up to USD 100 in May?

  • Oil
Photo credits: pixabay.com

In recent weeks, even experienced investors have learned a lot about the oil market. When the price of WTI slipped into the red in April 2020, this was a first in the history of black gold. On the one hand, the oversupply of producers put pressure on prices, but speculators also caused the distortions. It was a dangerous mixture on the expiry date of the May contracts. In two weeks' time, the June contracts expire and the price development is eagerly awaited, but this time it can also go the other way.

time to read: 2 minutes by Mario Hose
ISIN: CA80412L1076 , GB0007980591 , US30231G1022 , GB00B03MLX29


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


Speculators have gambled away

Crude oil is traded on the futures market in units standardized in terms of quantity and quality. A barrel is equivalent to 159 litres and a lot is 1,000 barrels. The contracts are traded on commodity futures exchanges, such as NYMEX in the USA. The WTI grade stands for Western Texas Intermediate and is considered the standard for quality in physical delivery on the expiration date.

Transportation and storage costs are incurred in connection with the delivery. When the May contracts expired on 21 April, there were simply no buyers and anyone who wanted to get rid of a long position not only gave away the oil, but had to pay around USD 38.00 on top of it.

Shortage and short selling

Market participants have had a painful experience that is unlikely to be repeated on May 19, when the June contracts expire. A long squeeze in April could possibly be followed by a short squeeze until the May expiry date. Due to the low oil price, it is not worthwhile for many producers to continue production at normal levels. A throttling leads to a decline in supply.

At the same time, the economy and thus the demand for oil will continue to grow in the coming weeks. Speculators, who at the same time are betting that the oil price will be lower again at the expiry date, could possibly become the price driver with their coverages. Will the price of oil still rise to USD 100.00 per barrel in May? We will see. Most recently, the June contract for WTI was traded at USD 24.59 and has thus already risen by more than 100% compared to the previous week.

Advantage for Canadian oil

The shareholders of BP, Exxon and Shell will again have exciting days ahead of them. Up to the level at the beginning of the year, when the oil price was trading above USD 60.00, these shares will have to increase by 50%. A positive oil price development will also be exciting for the young producer Saturn Oil & Gas from Canada. The company produces the black gold in the province of Saskatchewan.

The deposits are located in the Viking Formation, consisting of sandstone, and can be extracted at less than CAD 15 per barrel more cost-effectively than the shale oil produced by the companies in the USA. This competitive advantage is likely to play into Saturn Oil & Gas' hands in the future. Especially since the management is also focusing on the ESG trend.

Harmless origin of the energy source

Oil will continue to be needed in the future in modern and aspiring society. In this context, the current market conditions can be an excellent opportunity to enter the market. In connection with the topic of sustainability and environmental protection, Canada as a location is likely to gain in importance.

Ethically and morally sound oil will have a competitive advantage in the medium to long term. Anyone who already places value on fair trade and organic farming should question which regime is supported at the fuel pump.


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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  • Oil

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  • Oil

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Nel, JinkoSolar, Saturn Oil + Gas: It looks good!

  • Oil

Shares from the solar, hydrogen and oil sectors are in demand again. And the chances are good that it will continue. The federal elections are creating a good mood for solar and hydrogen; whether it is a traffic light or Jamaica, the new government will be greener. So good news for Nel and JinkoSolar. Both have also reported positive news. But oil stocks could also be in for a hot fall. That is because little work is being done on new projects, and demand will remain high for decades to come. So oil could become scarce despite the trend toward clean energy, according to one expert. Saturn Oil & Gas should benefit from this. The Canadians just bought huge oil reserves at a bargain price.

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