What do you get when you run the same ruler over all the other commodities - how does any gold company hold up or iron ore or coal or any of them?
The aussie floats against the USD and will come to our rescue because the economics right across the Australian resource sector are getting worse so the dollar will have to come down to reflect that.
If the Aussie falls to around 65c or even 60c - and the POO remains at $38USD then that would equate to a return of $60AUD a barrel.
Brent closed at $37.71 (cash $39.78) on Friday - the average for 2016 on Friday's trade is $42USD so based on Friday's last trade 2016 if the aud keeps pulling back should see a average return of the high 60's aud for 2016.
I don't believe the POO will stay this low so the above is worst case for me and the aud may go even lower.
The amount of defaults that will occur in the coming couple of months in the US should see a boost to the POO through production taken offline - though if the junk bonds trigger a bigger event then I don't like to think where anyone's holding in any Australian company might end up.
STO Price at posting:
$3.51 Sentiment: Buy Disclosure: Held
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