As the global oil cost curve became steeper due to temporary elimination of low cost volumes from Persian golf i see two trade conclusions:
- get short term 1-3 months exposure to high cost oil producers (e.g. West Africa) for whom sudden price increase creates huge operational leverage and valuation hike is likely to follow.
>Agressive strategy to capture the disconnect between physical and paper
- go long for medium/low cost majors whose valuations increase due to higher floor price.
—> defensive strategy against demand destruction in 2-6 months
Excellent article.
As the global oil cost curve became steeper due to temporary elimination of low cost volumes from Persian golf i see two trade conclusions:
- get short term 1-3 months exposure to high cost oil producers (e.g. West Africa) for whom sudden price increase creates huge operational leverage and valuation hike is likely to follow.
>Agressive strategy to capture the disconnect between physical and paper
- go long for medium/low cost majors whose valuations increase due to higher floor price.
—> defensive strategy against demand destruction in 2-6 months
Hey Fred, seems like the 2nd and 3rd graphs are the same?
Thanks Karl !
I see someone at least read it properly ahah.
Fixed.
I'm long sugar like a degen.