it already has happened - it always happens in every multi stage capitulation chart ive ever looked at
the same thing happened in the 50s - price steadied - rose a bit - then fell again
personally the supply momentum stories out of the us + russia and venezuala both increasing production suggest to me there'll be a 4th stage to this.
but these stalling points at least give the suffering long term shareholders an opportunity to get out if they choose
overnight i saw 2 oil analysts on cnbc, say
a) 50% of us production comes from 10 biggest producers whove got the lowest cost base
b) us shale oil operators are more resilient than they thought and can make money at 50 rather than 80 as was previously thought.
c) one positive for oil price stabilising is that its now cheaper to buy oil for immediate delivery than futures - which will likely mean traders start buying to stockpile.
d) another positive is that brent falling toward parity with wti could see offshore oil start to push more into the US - so they would move to stabilise each other - though initially i presume that would mean further drop in wti
we're much closer to the end than the beginning - but theres probaly one more leg down to about 38 or so imo
regardless sto is bad buying. oil price will recover but sto as a stock is overprices unless oil gets back above 70.
people need to bear in mind how much reduction in multiples will be applied to oil and gas sector if it becomes apparent this is a long term oversupply market.
that still hasnt happened as yet - at the moment analsysts are still using 70 long term oil price assumption and just reducing a few years of earnings.
the real pain comes in a few months if this starts looking like its all baked in
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