Even if you agree that oil is nearing its peak, the ESG movement limits the money and places where it can be drilled, as noted investment writer John Mauldin points out. “Economics 101 says that if you reduce the supply of something that has increasing demand, the price will go up,” says Mauldin, who, it should be noted, belongs to a research society. Independent oil and gas operator.
This is what happened, especially with regard to the offshore oil play. The VanEck Oil Services ETF OIH is up 51% over the past 52 weeks, a period in which the S&P 500 is up 15%. Shares of an oil services company, Weatherford International
It rose 202% during this time frame, a period in which Nvidia saw
Shares rose 228%. Across the ocean
And tide water
Very close to tripling its value over the past 52 weeks.
Doesn’t seem like anyone cares. Take a look at this photo from the Barclays Offshore Oil Conference, full of empty chairs.
robert mitchell, Author of the Blind Squirrel Macro blog, focuses on owners and operators of oil rigs or drilling vessels and their support vessels and providers of specialized services, with a combined market value of $30 billion. Phalaris
Both Weatherford and Weatherford have emerged from bankruptcy with limited or no debt, while Transocean is debt-laden but holds the largest number of high-end assets, putting it in a position to be a first mover to benefit from daily interest rate hikes. Tidewater is a leader in the platform supply vessel market.
His argument is simple – there are high utilization rates, over 90%, and rising daily rates, which apparently are just the daily cost of drilling. Meanwhile, offshore companies trade at a discount of up to 80% to their replacement cost value, preventing the construction of new equipment. Shipyards, which have been hurt by the sector in the past, are instead focusing on hot sectors such as liquefied natural gas tankers.
“Bottom line – no new drillships, floats, jackups, PSVs, etc. will be built until day rates have spent a reasonable amount of time above current levels (to make the economics of new construction seem reasonable). We are far from that point,” he writes. In oilfield equipment and services fleets with low average age will increasingly become price makers.
US stock futures
It was weak after the S&P 500 SPX fell 0.2% last week. Oil futures contracts
It was above $91, and Bitcoin futures
It was higher than $27,000.
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The big event is Wednesday, when the Fed’s decision is announced, but for Monday, the economic calendar includes homebuilding sentiment.
It made an offer over the weekend of a 21% wage increase over the course of a new contract, which was quickly rejected by the United Auto Workers, which are striking at one plant in Stellantis, Ford Motor Company.
And General Motors
Biden’s national security adviser held talks in Malta with China’s foreign minister – possibly ahead of the leaders’ meeting.
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Factory in Türkiye in New York meeting.
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