Contango is back

[xandman]

I am avoiding LNG and deep water rig equities like grim death.

LoL. Thanks. I was hoping to do some investing.

TK had changed it's dividend policy in the middle of last year to milk TGP and TOO cashflow. Now they are issuing stock.

 

[traderob]

has the thread opener's opinion changed about oil prices?

 

[ogarbitrage]

No DRYS?

DRYS is a dry bulk carrier with no exposure to wet freight. They may benefit from a drop in bunker prices, but they will not experience the same demand for services or appreciation of assets that wet tankers will.

LoL. Thanks. I was hoping to do some investing.

TK had changed it's dividend policy in the middle of last year to milk TGP and TOO cashflow. Now they are issuing stock.

The only Teekay asset I like is TNK: Teekay Tankers. TNK owns product tankers, Aframaxes, Suezmaxes, and 50% of one VLCC. They own 28 wet vessels and control an additional 7. They also own a stake in Oslo-listed Tanker Investments, Ltd. (TIL), which itself owns 14 wet vessels (8 Afra, 4 Suez, and 2 VLCC).

I would avoid the parent TK and offshoots TOO and TGP for several years. They will be listless if anything.

 

[DT3]

Great thread, OG are you worried with FRO debt specifically how they seem to use equity for debt swaps?

 

[Maverick74]

Great thread, OG are you worried with FRO debt specifically how they seem to use equity for debt swaps?

Ditto that. OG is one of the few value add guys on here. Solid thread.

 

[ogarbitrage]

Great thread, OG are you worried with FRO debt specifically how they seem to use equity for debt swaps?

I actually do not mind the debt/equity swaps as I view them as bullish. I also expect FRO to handle their April 2015 bond repayment with relative ease given the Q4/Q1 results and the impending demand from contango and cheaper oil prices.

John Fredrikson has managed to survive and thrive in a very cyclical industry for the past several decades. I trust his management and appreciate his personal ties to his portfolio of companies.

 

[ogarbitrage]

Middle East Crude-Chinaoil sells eighth Upper Zakum cargo to Shell

Chinaoil will deliver an eighth Upper Zakum cargo to Shell, traders said. In October, Chinaoil bought 47 cargoes of Upper Zakum, Oman and Dubai in the window, which strengthened the Dubai benchmark.

"Refining margins (are) coming under more and more pressure while seasonal demand patterns are pointing to the downside," analysts at JBC Energy said in a note.

The consultancy expects global crude runs in the first quarter down by 600,000 barrels per day compared to the fourth quarter this year, "further highlighting the looming weakness in the global oil balance."

The G/H Dubai spread settled at 1.90/bbl, well over the costs of floating storage in the AG (~1.15/bbl)

European Urals market continues slide as CIF Augusta market hits 6-month low

The Urals crude market fell further across Europe in Monday trade, after the signed loading program showed a more than 60% increase in expected loadings across the three main Urals export terminals in January.

The final, signed copy of the Urals export program for January showed expected loadings out of the three main terminals at 9.15 million mt, making the final January schedule the longest since October 2013.

An additional 500,000 mt of Urals has been added to the Baltic Sea schedule following the release of the provisional program early last week, with exports out of both Primorsk and Ust-Luga set to rise to their highest levels since May at 4 million mt and 2.3 million mt respectively.

500,000 MT = 3.615m bbls. The Urals program should weigh on Brent while the product exports will depress ARA and Med crack spreads adding further pressure to the entire complex.

These are certainly interesting times.

 

[Maverick74]

Damn brother OG, you are a market mover....FRO up 12% today.

 

[ogarbitrage]

This is just the beginning.

 

[ogarbitrage]

Today's curves: