Sam Kovacs

Fade the fake headlines A failure of the blue-pill overlords to bash WTI Crude below $93.5 today will be the necessary proof that they lost the plot. https://t.co/CRbDi5gbD0

WTI CRUDE OIL Chart update: haven't been wrong yet. 🔮🔮🔮 Shape of last week's WTI prediction mostly holds. It wicked down faster and lower than I would have expected. The weak hands seem to have been shaken out, as long as the lower rail of $93-$94 holds, the setup now suggests that crude will run in a tight elevated range and break significantly higher somewhere in October. November and December likely to entirely be above $100 at this rate.

Brent back above $100. In case Barak and Javier forgot to let you know.

Brent back above $100. In case Barak and Javier forgot to let you know.

CRUDE DOWN 7 consecutive days, what happens next? https://t.co/ZLgyMdVucF https://t.co/qCi3wp5ILw

Ok so last WTI prediction was right. Like I said, been around the block a few times. 🔮🔮 I now think WTI crude oil can pinball between $94-105 for a few weeks. Let's not forget that every day this lasts, virtually any company in the industry is booking windfall profits. We will likely get much higher prices. Anyone believing this is over or in any way resolved is high as a kite. They blasted 3 tankers in the past 48 hours goddamit. We could see a candle take out all the paper hands at $91, wouldn't be unusual. They likely slam it again in October into the monthly option expiry, and then it rips right on time for Americans heading to the ballot box on November 3rd. That's a narrative that makes sense to me.

If Trump bans US diesel/gasoline exports: 1. Gulf coast diesel prices go down, and inventories start filling as millions of barrels look for a domestic home. But California which imports a lot of its gasoline, isnt saved by this. 2. International diesel / gasoline goes thru the roof. Mexico gets absolutely shattered as it gets over 1mbpd of Gulf coast products. They know need to look elsewhere, increasing atlantic tanker demand. 3. US storage fills as Americans cant consume the excess supply. 4. US Refiners cut their runs. That reduces WTI demand, resulting in a lower WTI and a bigger discount to Brent. 5. Foreign refiners print money. India for sure ramps up, Asian refiners follow. China likely ramps runs big time as cracks go through the roof. This increases demand for crude oil and Brent is bid up. 6. Then the US benefit eats itself: lower refinery runs + higher imported crude (to match refinery grades) and we’re back where we started. So the strange end result could be: Texas gets cheap fuel. California doesn’t. Mexico gets squeezed. Global diesel goes vertical. US refiners cut runs. WTI weakens vs Brent. Foreign refiners capture the margin. And then Texas fuel prices go back up. The US ends up exporting more raw crude while giving up the enormous margin from turning it into the products the world desperately needs. It would effectively be a free subsidy of foreign refiners at the expense of US refiners. It would be another short term solution which would leave the US worse off than where it started.

If Trump bans US diesel/gasoline exports: 1. Gulf coast diesel prices go down, and inventories start filling as millions of barrels look for a domestic home. But California which imports a lot of its gasoline, isnt saved by this. 2. International diesel / gasoline goes thru the roof. Mexico gets absolutely shattered as it gets over 1mbpd of Gulf coast products. They know need to look elsewhere, increasing atlantic tanker demand. 3. US storage fills as Americans cant consume the excess supply. 4. US Refiners cut their runs. That reduces WTI demand, resulting in a lower WTI and a bigger discount to Brent. 5. Foreign refiners print money. India for sure ramps up, Asian refiners follow. China likely ramps runs big time as cracks go through the roof. This increases demand for crude oil and Brent is bid up. 6. Then the US benefit eats itself: lower refinery runs + higher imported crude (to match refinery grades) and we’re back where we started. So the strange end result could be: Texas gets cheap fuel. California doesn’t. Mexico gets squeezed. Global diesel goes vertical. US refiners cut runs. WTI weakens vs Brent. Foreign refiners capture the margin. And then Texas fuel prices go back up. The US ends up exporting more raw crude while giving up the enormous margin from turning it into the products the world desperately needs. It would effectively be a free subsidy of foreign refiners at the expense of US refiners. It would be another short term solution which would leave the US worse off than where it started.

What's crazy when we look at $PBR chart (which I first bought at $16 and doubled down at $18 this year), is there is not much resistance between here and say $30-$33. When you consider: -Bolsonaro now looking likely to win on October 4th -Brazil is the best substitution barrel for China (and a BRCIS member) -They have crazy optionality in places like Sao Tome -and even without all of that they trade at less than 0.5x EBITDA It kind of makes sense. I pitched this on @gnoble79 's conference a few months ago, it was at $18. This has been a clean 20%+ since then.

WTI up 29% in 1 month: Why Energy stocks not too the moon? My stock picks which are linked to my “The Big Long” theme, have driven a lot of those gains as they are up 9% in a month (position weighted). Now that’s a fine and dandy 1 month return, but with WTI crude oil breaking to $106 as I write this, up 29% in a month and up 4.8% today alone, members are asking why the oil stocks are not following the front contract of WTI. That’s mostly because the number you see on the screen when you look up WTI crude oil doesn’t matter as much as you think it does. If we look at the curve at close yesterday. The barrel for delivery next month was $101.54 (granted its higher today). The barrel for delivery in March was $84. The barrel for delivery a year out, September 2027, was $74.54. So the market is telling you that if you want oil right now, you pay a hundred bucks, but if you can wait a year, it is $75 That $27 backwardation gap is the biggest thing in the oil market right now. Now think about what an oil company represents: It is barrels in the ground that come out over up to twenty years. When you value those barrels, you use the strip, the whole curve of prices for every year going forward. And the strip says $75 next year and the low seventies after that. So the market is valuing your E&P stock on $75 oil. The extra $27 on the barrel it sells this month is a nice bonus for a quarter or two. In the eyes of the market, it does not change what the company is worth. I just wrote up on this with some pretty charts for FREE, you can read the rest of this article below: