Monday 12 January 2015

Evening Bolt On: Guess what...Oil. Stating the obvious thanks GS.

Futures are not deterring the floating storage with the bets looking more than likely for Sept/Oct 2015 stability (subject to change). Brent Crude $47.37/bbl.-down $2.74  -5.47%. 

We had the obvious opinion from Goldman Sachs (GS) being published (Reuters) & $40 Oil? That’s How Low Goldman Sachs Says It Needs to Go (Bloomberg). With GS cutting their three-month forecasts for Brent to $42 a barrel from $80 (better late than never) For the U.S. WTI (West Texas Intermediate) contract to $41 from $70 a barrel. GS cut their 2015 Brent forecast to $50.40 a barrel from $83.75 and U.S. WTI crude to $47.15 a barrel from $73.75. 

For the traders and lenders there will be many a late nights running over the reserves based lending (RBL) facilities and breaches of covenant and/or default. This has the obvious possibility to remove a significant surplus off the market. 

Over to the brokers to sell these "value" fundraisers. With so many firms leveraged the risks of default and fundraisers are now imminent. Assuming anyone wants to take the risks other than giving the assets back to the bank in the current cycle. Over to the big boys for some cheap production to be picked up.

Russian defaults should surely be stacking up...along with Kenya/Nigeria.

Atb Fraser

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