Archive for Energy

WTI Crude Oil Speculators dropped their bullish bets for 4th straight week

May 25th – By CountingPips.comReceive our weekly COT Reports by Email

WTI Crude Oil Non-Commercial Speculator Positions:

Large energy speculators continued to reduce their bullish net positions in the WTI Crude Oil futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of WTI Crude Oil futures, traded by large speculators and hedge funds, totaled a net position of 478,398 contracts in the data reported through Tuesday May 21st. This was a weekly decrease of -9,410 net contracts from the previous week which had a total of 487,808 net contracts.

The week’s net position was the result of the gross bullish position (longs) falling by -22,000 contracts (to a weekly total of 585,979 contracts) that more than offset the gross bearish position (shorts) which decreased by -12,590 contracts for the week (to a total of 107,581 contracts).

The net speculative position declined for a fourth straight week and for the fifth time out of the past six weeks. Previously the speculator bets had gained for eight straight weeks and by a total of +228,448 contracts in that period through April 9th.

The overall position remains in a relatively strong bullish level with the net position staying above the +400,000 contract level for a tenth straight week.

WTI Crude Oil Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -501,886 contracts on the week. This was a weekly boost of 6,993 contracts from the total net of -508,879 contracts reported the previous week.

WTI Crude Oil Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the WTI Crude Oil Futures (Front Month) closed at approximately $63.13 which was an uptick of $1.35 from the previous close of $61.78, according to unofficial market data.

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

Article By CountingPips.comReceive our weekly COT Reports by Email

Oil & Gas Firm Attracts Acquisition Interest in Its Orogrande Assets

The Energy Report

Source: Streetwise Reports   05/21/2019

The energy company noted that the response so far is encouraging.

Torchlight Energy Resources Inc. (TRCH:NASDAQ) announced in a news release its efforts to date to attract acquisition interest in its Orogrande Basin assets.

Since starting the process in April, management made seven individual presentations to major publicly traded industry corporations that have an enterprise value between $400 million and $100 billion and private equity-backed firms, the names of which remain confidential.

“A key focus has been the opportunities of the play as both an oil and gas project in the Wolfcamp/Penn zones and additionally the Barnett/Woodford zones,” Torchlight’s CEO John Brda said in the release.

Interest has come from some majors with and others without a significant presence in the Permian Basin. Some of the potential suitors like the project’s conventional opportunities.

“We believe that next-round discussions will help identify the best partners for a transaction, accelerate the process and move us to another round of final geoscientific review and capital discussion,” Brda added.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Torchlight Energy. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Torchlight Energy Resources. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Torchlight Energy, a company mentioned in this article.

( Companies Mentioned: TRCH:NASDAQ,
)

Crude Correction Continues As EIA Highlights Further Inventories Build

By Orbex

Crude oil prices were knocked sharply lower this week as the latest industry reporting weigh on sentiment. The weekly Energy Information Administration report showed that US crude stores unexpectedly rose, once again, by 4.7 million barrels in the week ending May 17. This figure was in stark contrast with analysts’ expectations for a decrease of 599,000 barrels. The latest surplus has boosted overall crude inventories, excluding the US government’s Strategic Petroleum Reserve, to 476.8 million barrels. This is their highest level since July 2017.

Strategic Petroleum Reserve Sales Continue

Part of the increase was as a result of sales by the SPR which supplied 1.1 million barrels last week. This marks its fourth consecutive week of sales. However, the broader increase in crude stores has been attributed to weak refinery runs. These have been lower than usual for this time of year, especially in the Midwest where refinery usage has fallen to its lowest level since 2013.

Refinery Rates Down

Refinery utilization rates have fallen over the year due to seasonal maintenance. However, they have scarcely pierced above the 90% even as the market prepares for peak fuel demand season over the summer. Over the week, refinery crude runs fell by 98,000 barrels per day and rates fell 0.6% to high 89.9% of total capacity. Rates in the Midwest fell to 82.7% of capacity. This figure marks their lowest for the month of May since 2013.

Consequently, Midwest crude inventories jumped last week to 142.4 million barrels. This is their highest level since November 2017. On the other hand, gasoline inventories in the same region slumped to 47.4 million barrels. This is their lowest weekly levels for the month of May since 2014.

Finally, Crude inventories at the Cushing, Oklahoma, delivery hub soared by 1.3 million barrels. Inventories reach their highest levels since December 2017, at 49.1 million barrels per day.

US Crude Imports Down, Production Up

Elsewhere, the report showed Net US crude imports dropped last week by 244,000 barrels per day. Crude production rose again by 100,000 barrels per day to 12.2 million barrels. This is just under the record high.

Gasoline inventories also rose by 3.7 million barrels. Analysts’ expectations shown in a Reuters poll contrasted this data. They had forecasted an 816k barrel drop.

Distillate stockpiles, including diesel and heating oil, also rose by 768,000 barrels. This was again, in contrast with expectations for a decrease of 48,000 barrels, according to the EIA.

Middle East Tensions Offer Upside Pressure

The report would likely have had a far more bearish impact on price were it not for ongoing, rising,tensions in the Middle East, which are keeping supply concerns alive.  On Monday, Trump threatened Iran with “great force” if it attacks any US interests in the region, following the deployment of US warships to the area.

Trade War Woes Still Weighing on Sentiment

However, the upward pressure on price is currently being offset by growing concerns of the global economy in light of the escalating trade war between the US and China, following retaliatory tariffs from China.

Last year, oil prices plummeted as the trade war raged on. Furthermore, there are fears that unless a deal can be done, we are headed for a similar situation with oil and equities in the near future.

Technical Perspective

forex crude oil

Crude has now potentially put in a lower high against the 66.50s 2019 peak. If we break below the 60.41 level support this could pave the way for a much larger correction lower in oil, targeting 58.13 first, where we also have the bearish channel low.

For now, though, the bullish channel can still be viewed as a corrective bull flag formation to the strong bullish move so far this year, with bulls waiting for a topside break to confirm a resumption of the trend.

By Orbex

 

Global Economic Tensions Translate Into Oil Volatility

By TheTechnicalTraders.com

Our continued efforts to alert and assist fellow traders to the incredible setups that are currently happening throughout the globe with regards to increased global economic tensions are starting to take root.  We are hearing from our readers and follower and we love the comments we are receiving.  Near April/May 2018, we started predicting that the end of 2018 and almost all of 2019/2020 were going to include incredible opportunities for skilled traders.  We made these predictions at about the same time that we issued a series of incredible calls regarding the future market moves in 2018 & 2019.

Our most recent multiple-part research post regarding the current global economic environment and how EU elections, US/China trade issues and a very contentious US Presidential Election cycle are poised to continue driving increased price volatility just hit the digital medium last weekend (https://www.thetechnicaltraders.com/us-vs-global-sector-rotation-what-next-part-ii/ ).  We urge all of our followers to read this detailed article about how a series of global events are stacking up to create incredible opportunities for skilled traders.

Today, we are focusing on Crude Oil because our proprietary adaptive learning Fibonacci modeling system is suggesting a surge of massive volatility is very likely to happen over the next few months in Crude Oil and we believe the DOWNSIDE price risk is the most likely outcome at this point.  Fibonacci price theory dictates that price must ALWAYS attempt to seek out new price highs or new price lows – ALWAYS.  We interpret this price requirement as the following:

“Tracking major price peaks and valleys, one can determine if the price is currently achieving new higher high price levels or lower low price levels (thus continuing the price trend) or failing to reach these new higher high or lower low levels.  Any failure to reach new higher highs or lower lows is a warning that price may be attempting to continue a previous price trend or reversing.”

This Weekly chart of Crude Oil clearly illustrates our thinking in terms of this Fibonacci price theory component and other technical aspects.  The CYAN price trend line (downward sloping) suggests a failure to establish any new price highs over the longer term trend.  Additionally, the recent downward price rotation suggests price weakness may be returning to Crude Oil.  Pay very special attention to the Fibonacci price projection levels on the right side of this chart.  Notice that the upside price projections start near $74 and the downside price projections start near $33.  This is an incredible $41 price range in Crude Oil and this very wide Fibonacci projection range suggests massive volatility is about to hit.

 

This Daily Crude Oil chart showing our proprietary Fibonacci price modeling system’s results also suggests incredible upside and downside price projections.  The upside levels target the current price level (near $63.50) as well as additional levels above $70.  The downside levels target a range of lower price objectives between $53 and $57.  The current Fibonacci price target level (CYAN) is quite interesting as it suggests Oil prices will find resistance near $63.50 and potentially move lower if this upside price trend fails.

 

Therefore, we take the entire analysis into consideration and come to the following conclusion:

If price falls below the $64 level and begins to move below $61.85 (the Daily Fibonacci Bearish Trigger Level), then we would consider the current upside price trend to have “failed” in attempting to reach a “new higher high” level (which would require price to move to levels above $66.60).  This conclusion would suggest that the failure of the upside price move should prompt a downside price move attempting to take out the $60.07 lows (attempting to establish a “new lower low” price level).

The longer-term downward sloping price channel suggests the failure to achieve recent higher price highs is indicative of a failed rally attempt which will prompt a new downside price move in the near future.  The only condition that could reverse this analysis is if Oil prices rallied above $66.60 and attempted to break the longer term price channel.

It is our opinion that Crude Oil will attempt a move lower, attempting to breach the $60.07 low price level and attempt a move back to levels near $55 to $56 before finding support.  This current rotation in price is a process of setting up a downward sloping Pennant/Flag formation (we believe).  Global economic factors, being what they are right now, are likely to see increased supply and decreased demand for Oil across the planet – at least until more clarity and resolution is established with the US/China trade issues and the US Presidential elections.

Get ready for a big move in Crude Oil.  Our analysis suggests the move will be to the downside with a downside target between $53 and $55 right now.  Any further price expectations will be updated as we get further information from our proprietary price modeling systems.  Remember, any new conflicts/wars with Iran or in the Middle East will push Oil prices much higher and negate the technical analysis/supply/demand price analysis we’ve presented.  We would not like to see any conflicts happen, but we have to be aware that this reality exists and that Oil could rally well past $70 if a new conflict occurred.

If you want to follow the exact trades I take while learning to read the charts and make money be sure to join my Wealth Trading Newsletter today!

Chris Vermeulen TheTechnicalTraders.com

Energy Transportation Firm ‘Looks to Carry Positive Momentum’ Through 2019

The Energy Report

Source: Streetwise Reports   05/17/2019

This company’s solid Q1/19 and growth potential were discussed in an iA Securities report.

In a May 13 research note, iA Securities analyst Jeremy Rosenfield reported that Enbridge Inc. (ENB:NYSE; ENB:TSX) had a good start to 2019, with its Q1/19 results coming in above expectations.

“Solid performance across all business segments” drove Enbridge’s Q1/19, highlighted Rosenfield. The company reported adjusted EBITDA of $3,769 million, higher than iA’s CA$3,353 million projection and consensus’ CA$3,447 million forecast. Adjusted earnings per share was CA$0.81, above iA’s CA$0.79 projection and the Street’s CA$0.73. Discounted cash flow was CA$1.37 per share, also higher than iA’s CA$1.25 estimate and consensus’ CA$1.21.

Enbridge’s near-term growth and longer-term potential upside “remain on track,” Rosenfield noted. The company intends to put about CA$16 billion into secured growth projects through 2023 and increase discounted cash flow (DCF) per share at an annual rate of about 5–7%.

“We continue to see longer-term potential upside from additional growth initiatives, which could support an extension of the existing DCF/share growth rate, without the need for external equity,” the analyst added.

Enbridge reiterated its financial guidance for 2019.

Rosenfield concluded that Enbridge offers investors stable earnings and cash flows; visible, low-risk organic growth; attractive income characteristics; and upside. IA Securities has a Buy rating and a CA$60 per share price target on Enbridge Inc. The company’s stock is currently trading at about CA$49.41 per share.

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Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional, and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from iA Securities, Enbridge Inc., Research Update, May 13, 2019

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

Analyst’s Certification: Each iA Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the issuer and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst’s recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

Company Related Disclosures:
Enbridge:
The Industrial Alliance Securities Inc. research analyst(s), who cover the issuer discussed, members of the research analyst’s household, research associate(s) or other individual(s) involved directly or indirectly in producing this report: a. have a long position in its common equity securities.
The analyst has visited the issuer’s operations. No payment or reimbursement was received from the issuer for the associated travel costs.

( Companies Mentioned: ENB:NYSE; ENB:TSX,
)

Oil & Gas Explorer with Texas Assets Rated Outperform

The Energy Report

Source: Streetwise Reports   05/19/2019

The energy company’s expectations for the year are addressed in a Raymond James report.

In a May 16 research note, analyst John Freeman reported that Raymond James reiterated its Outperform rating on SM Energy Co. (SM:NYSE) after updating its model on the company to incorporate its latest update and management’s comments.

Freeman highlighted that SM Energy anticipates and remains committed to generating free cash flow in Q2/19. “Overall, our model puts SM in slightly positive free cash flow territory in the back half of 2019, but 2020 should be the real turning point for the company,” he added. “Likewise, the balance sheet remains at about 3x leverage through 2019 before meaningfully improving in 2020.”

About 14 of SM’s wells in the Eagle Ford are slated to come online in Q2/19 versus two that started production in Q1/10. As such, Freeman noted, Raymond James estimated SM Energy will attain an approximate 13% growth in 2019 over that of last year with a capex of $1.07 billion, weighted to H1/19. Similarly, SM’s budget guidance for the year remains at $1–1.07 billion.

As for pricing in Q2/19, SM Energy expects it to be weaker in Q2/19 and Q3/19 for crude oil and natural gas due to constrained pipeline capacity for both causing Permian price differentials to expand, Freeman pointed out. However, “hedges on 60–65% of oil and 70–75% of Permian gas should alleviate some of the regional pricing burden.”

Raymond James has a $26 per share target price on SM Energy, whose current share price is around $15.10.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Raymond James, SM Energy Company, May 16, 2019

ANALYST INFORMATION

Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst’s success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

The analyst John Freeman, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

Raymond James & Associates, Inc. makes a market in the shares of SM Energy Company.

Raymond James & Associates received non-investment banking securities-related compensation from SM Energy Company within the past 12 months.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.

( Companies Mentioned: SM:NYSE,
)

Brent Got Impulse From OPEC+

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

This morning, the commodity market got a new impulse for growing. Brent is moving upwards on Monday 20th; it added 1.1% and is currently trading at 72.96 USD, although in the morning the highest level was 73.40 USD.

The positive impulse was caused by the comments made by Saudi Arabia Minister of Energy, who said last weekend that countries participants of the OPEC+ were ready to continue limiting oil extraction. Right now, the countries members of the OPEC+ are obeying the agreement that limits daily oil extraction. So far, the agreement was considered to be valid in the first half of 2019, but now it is clear that it will be extended until the end of the year or maybe even longer.

Investors are not expecting any oil shortages, but it’s better to avoid oversupply, which already took place at some moments of this year, as well. For this purpose, the commodity market has the USA with their glut of shale oil production.

Right now, there are strong fundamental factors on the commodity market, which are supporting the positive impulse in Brent. First of all, we’re talking about the US sanctions against Iran and Venezuela – reduction of oil extraction in these counties leads to oil prices growth. Limitations set by the OPEC+ are also in favor of bulls. In opposition, the demand for oil is a little bit decreasing due to slowdown in global economy growth, mostly because of trade wars between the USA and China.

As we can see in the H4 chart, after breaking 72.25 upwards, Brent may continue growing to reach 74.50. Also, the pair has tested the broken level from above. Right now, is trading to rebound from it to the upside and consolidating above 72.25. Possibly, the price may update 73.73 and then form a new descending structure towards 72.50. After that, the instrument may start a new growth with the short-term target at 75.50. This scenario is confirmed by Stochastic Oscillator, as its signal line is steadily moving upwards. However, this scenario may be no longer valid if the pair breaks 72.00 downwards. In this case, the correction may continue to reach 68.00.

In the H1 chart, Brent is steadily growing towards 73.73. Possibly, the pair may reach it and then start a new correction with the intermediate target at 74.50. Later, the market may consolidate around this level and then resume growing to reach 76.50. This scenario is confirmed by Stochastic Oscillator, as its signal line is reversing and moving upwards to reach the “overbought area”. However, this scenario may be no longer valid if the pair breaks 72.00 to the downside. In this case, the instrument may continue the correction towards 68.00.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

 

Restructuring Plan ‘Best Course of Action’ for Oil & Gas Company but Bleak for Equity Holders

The Energy Report

Source: Streetwise Reports   05/16/2019

The details and effects of the plan, which is in negotiation as part of a Chapter 11 bankruptcy, were explored in a Raymond James report.

In a May 12 research note, Raymond James analyst Praveen Narra reported that as part of its Chapter 11 bankruptcy, Weatherford International Ltd. (WFT:NYSE) entered negotiations to restructure its outstanding notes, which will mean “equity holders [will] get minimal recovery of new common stock.” The analyst added that “while it is a challenging decision, we continue to see the prepackaged restructuring as the best course of action.”

In the proposed restructuring plan, existing notes would be canceled and exchanged for 99% of the common stock of the reorganized company, or new common stock, along with $1.25 billion of new tranche B senior unsecured notes with a seven-year maturity, to be issued by the reorganized company.

This would reduce outstanding debt by $5.85 billion. It also would cancel the existing equity in exchange for 1% ownership of newly issued shares and three-year warrants to purchase 10% of the new common stock. “While the restructuring agreement has yet to be finalized, we would expect the plan to go through in the coming weeks, and see Weatherford shares as holding little value given the low exchange ratio,” Narra commented.

In other news, Weatherford reported its Q1/19 adjusted EBITDA was $120 million, below Raymond James’ $209 million estimate and consensus’ $206 million forecast. Earnings per share was $0.18, higher than the $0.12 estimate of Raymond James and the Street.

Raymond James has an Underperform rating on Weatherford.

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Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.

3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.

4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional, and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Raymond James, Weatherford International plc, May 12, 2019

ANALYST INFORMATION

Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst’s success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

 

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( Companies Mentioned: WFT:NYSE,
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One of the Remaining Active High-Grade Uranium Exploration Companies in Canada Could Benefit from a Rising Uranium Tide

The Energy Report

Source: Streetwise Reports   05/16/2019

The uranium market has been in a long dormant period, but one Canadian company has used the opportunity to pick up assets.

From his office in Vancouver, British Columbia, Jordan Trimble oversees the operation of Skyharbour Resources Ltd.’s (SYH:TSX.V; SYHBF:OTCQB) uranium assets in Saskatchewan’s Athabasca Basin—the world’s most reliable source of high-grade yellow metal.

The uranium market has lain largely fallow in the aftermath of Fukushima as reactors shut down and uranium prices tumbled from $70/lb to a nadir of $17.75/lb. Scores of juniors bankrupted; majors closed highly productive mines to await more propitious days, meaning the ability to mine uranium profitably. In commodity markets, patience is a virtue since what goes down must come up as economic forces equilibrate supply and demand.

Spot market prices for uranium are nudging toward $30, but experts agree that cost-effective mining of the heavy metal globally awaits a price of more than $50/lb.

In an interview with Streetwise Reports, Trimble listed several reasons why Skyharbour Resources chose to take advantage of the downturn in uranium prices by acquiring high-quality Athabasca Basin projects at bargain basement values.

“During the next decade, global electricity consumption is predicted to rise by 76%. If we are serious about limiting greenhouse gases, then generating carbon-free electricity with nuclear reactors is a must,” Trimble said.

“What’s the point of driving a Tesla if you are fueling it with electricity generated from burning coal?”

Trimble explained that the low cost of production in uranium-rich regions such as Kazakhstan has caused the U.S. nuclear reactor industry to import the fuel, further extending the dormancy of the North American uranium mining sector.

But demand is clearly poised to rocket up. “Right now, there are 448 operable reactors, 57 under construction and over 500 ordered, planned and proposed,” Trimble said. “China is leading the charge, with India and other developing countries building apace. The United States currently has 98 reactors to fuel, and a climate-aware energy policy will dictate building more plants on the road to energy self-reliance.”

Trimble points out, “Historically, approximately 80% of uranium market trading has been done though long-term contracts, many of which are terming out and will have to be renegotiated at new prices and terms.” That means that previously “covered supply” will become “uncovered” and nuclear utilities will be forced back to the market to purchase uranium. “As global energy producers compete to contract for long-term sources, global prices will be forced to equilibrate to the increasing demand for clean, baseload, reliable and affordable energy,” he remarked.

There is another game-changer in the works. The Trump administration is currently reviewing the still-secret conclusions of a Section 232 Department of Commerce (DOC) investigation into whether Kazakhstan, Russia and Uzbekistan are flooding the U.S. market with ultra-cheap, state-subsidized uranium product. Energy Fuels and UR Energy are seeking price relief in the form of a quota system that would require U.S. utilities to purchase 25% of their U3O8 from domestic producers, which amounts to approximately 12 million pounds of U3O8.

“There are obvious national security implications posed by an addiction to uranium produced in countries that are not U.S. allies,” Trimble said.

How would 232 quotas protecting U.S. mining potentially help a Canadian company?

Trimble explained, “The DOC investigation has pushed American nuclear utilities to the sidelines effectively forcing the largest buyer of uranium globally out of the market recently. Once there is some clarity for U.S. utilities on this matter, they will be back in the market, which should help to drive higher uranium prices. Furthermore, the reality of the situation is that if the quota is mandated, it could take six years for U.S. producers to ramp up production, not to mention that if it’s deemed a national security concern to rely so heavily on Russia and Russian satellite countries to provide a large portion of the uranium that fuels one in five homes in the U.S., who stands to potentially benefit? Canada can be that dependable source of long-term supply from a reliable ally.”

Skyharbour Resources acquired its six Athabasca Basin uranium projects with just over $4 million in cash and stock. Skyharbour Resources owns 100% of its flagship, high-grade Moore Uranium Project, completing an earn-in with Denison Mines Corp. (TSX:DML; NYSE.MKT:DNN) in August 2018. Denison is a large strategic shareholder of Skyharbour’s, and its President and CEO David Cates sits on Skyharbour’s Board of Directors. Moore, located on the southeastern edge of the Athabasca Basin, consists of 12 contiguous claims totaling 35,705 hectares. Over CA$40 million has been invested in 140,000 meters of diamond drilling with over 380 holes. The primary focus is the high-grade and relatively shallow Maverick Zone.

Skyharbour Resources reports that upcoming company catalysts for 2019 include additional drill results as well as a maiden mineral resource estimate at the Moore project. The Main Maverick Zone is confirmed to be high-grade with a highlight results of 6.0% U3O8 over 5.9m including 20.8% U3O8 over 1.5m in hole ML-199. Furthermore, Trimble stated, “only 2 kilometers of the 4 kilometer Maverick corridor have been systematically drill tested, leaving robust discovery potential along strike as well as at depth in the underlying basement rocks where notable recent high-grade discoveries have been made like NexGen Energy’s Arrow Deposit and Fission Uranium’s Triple R Deposit. Skyharbour is looking to emulate the success of these other companies by drilling for basement-hosted, high-grade uranium mineralization at Moore.”

Industry experts at Caesars Report are impressed that Skyharbour Resources has strategic partners to shoulder exploration costs to advance the company’s secondary projects—a strategy known as “prospect generation.” In March 2017, Skyharbour partnered with other companies to explore its Preston and East Preston projects on the west side of the Athabasca Basin.

Skyharbour signed two agreements—one with Orano Canada Inc. (an industry leader and France’s largest uranium mining company), another with Azincourt Energy—to option up to 70% of the Preston and East Preston projects for $11.5 million in total project consideration. That amount includes $9.8 million in exploration expenditures and $1.7 million in cash payments over six years as well as shares of Azincourt.

Management and other key shareholders hold over 40% of Skyharbour’s shares. These investors include Denison Mines Corp., Marin Katusa and the KCR Fund, Extract Capital, Paul Matysek, Sachem Cove Partners, OTP Fund Management Ltd. and Doug Casey.

Trimble observed, “The herd has been culled from over 500 publicly listed uranium companies in 2007 to less than 40 active companies today. We are well positioned as one of the few remaining to take advantage of a rising uranium market with our dual-pronged strategy of making new high-grade uranium discoveries in addition to prospect generation in one of the most prolific uranium camps in the world.”

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Disclosure:
1) Peter Byrne compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Skyharbour Resources and Energy Fuels. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Skyharbour Resources, a company mentioned in this article.

Additional disclosures from Caesars Report:
Disclosure: Skyharbour Resources is a sponsoring company. We have a long position.

( Companies Mentioned: SYH:TSX.V; SYHBF:OTCQB,
)

WTI Crude Oil Speculators decreased bullish bets for 3rd week

May 18th – By CountingPips.comReceive our weekly COT Reports by Email

WTI Crude Oil Non-Commercial Speculator Positions:

Large energy speculators once again reduced their bullish net positions in the WTI Crude Oil futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.

The non-commercial futures contracts of WTI Crude Oil futures, traded by large speculators and hedge funds, totaled a net position of 487,808 contracts in the data reported through Tuesday May 14th. This was a weekly decrease of -6,528 net contracts from the previous week which had a total of 494,336 net contracts.

The week’s net position was the result of the gross bullish position (longs) tumbling by -8,810 contracts (to a weekly total of 607,979 contracts) while the gross bearish position (shorts) fell by a lesser amount of -2,282 contracts for the week (to a total of 120,171 contracts).

The WTI speculator position has fallen for three straight weeks after having risen in the previous ten weeks in a row.

The overall spec standing remains strong in bullish territory but the recent cool off has pushed bullish bets under the +500,000 net contract level for a second straight week.

WTI Crude Oil Commercial Positions:

The commercial traders position, hedgers or traders engaged in buying and selling for business purposes, totaled a net position of -508,879 contracts on the week. This was a weekly increase of 12,700 contracts from the total net of -521,579 contracts reported the previous week.

WTI Crude Oil Futures:

Over the same weekly reporting time-frame, from Tuesday to Tuesday, the WTI Crude Oil Futures (Front Month) closed at approximately $61.78 which was a rise of $0.38 from the previous close of $61.40, according to unofficial market data.

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) as well as the commercial traders (hedgers & traders for business purposes) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

Article By CountingPips.comReceive our weekly COT Reports by Email