Trade Radar | Crude Oil Price on FIRE 2.0!
Another Weekly Session with Loui, M+ Online Head of Research.
Since we have issued the article on crude oil price on FIRE!, (25 July) the tickers within the article have risen on average by 3.6%.
| Ticker | Name | Price ($) | Chg % | |
| 25-Jul-23 | 1-Sep-23 | |||
| $NEXTIER OILFIELD SOLUTIONS INC NEX$ | NexTier Oilfield Solutions Inc | 11.51 | 10.61 | -7.8% |
| $Northern Oil and Gas, Inc. NOG$ | Northern Oil and Gas Inc | 38.15 | 42.99 | 12.7% |
| $Antero Midstream Partners LP AM$ | Antero Midstream Corp | 11.73 | 12.20 | 4.0% |
| $Spdr Select Fund-Energy Select Sector XLE$ | Energy Select Sector SPDR Fund | 86.11 | 90.74 | 5.4% |
| Average returns (%) | 3.6% | |||
Also, we believe the overall crude oil price may trend higher after the recent breakout above USD 86-87 zone. （Editor's update: At the time of publishing, the crude oil price is trading above $90 USD）
There are several things to take into consideration on the recent developments within the crude oil market.
1) Saudi Arabia, Russia and OPEC+ supply cuts
Saudi Arabia, Russia extend oil cuts ahead of OPEC+ committee meeting - S&P Global
Saudi Arabia will continue the 1 million b/d cut that is holding crude production at a two-year low of 9 million b/d, while Russia is tapering its 500,000 b/d export cut for August to 300,000 b/d for September.
Moreover, Saudi Arabia announced the extension of cut “can be extended or deepened” when needed.
（Editor's update: At the time of publishing, Saudi Arabia extended the voluntary cut of 1 million barrels per day until the end of the year）
2) Oil demand is up hitting a record of 103 million barrels per day in June
Oil up on record demand forecast, 7th straight weekly gain- Reuters
International Energy Agency (IEA) forecast record global demand and tightening supplies, propelling prices to the seventh straight week of gains, the longest such streak since 2022. The IEA estimated that global oil demand hit a record 103 million barrels per day in June and could scale another peak in August.
3) Barclays upgraded Brent oil price outlook and target price
Barclays Sees Brent Oil Price at $97 in 2024 - oilprice.com
In this article, Barclays upgraded Brent oil price to $97 (+$8) for 2024.
“Slowing non-OPEC+ supply growth, driven primarily by the US, and persistent underproduction from several OPEC+ producers due to structural constraints bolsters our core thesis behind a constructive view on oil prices,” the bank said in a note carried by Reuters.
Hence, with the abovementioned catalysts, we expect the Brent oil price to stay firm and likely to trade on a positive trend over the near future. This may provide positive sentiment towards the O&G stocks.
So, we are somewhat more positive on Brent oil which may provide a booster towards O&G counters going forward.
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| Ticker | Name | Last Closing (USD) | 1-month Total Return (%) | 3-month Total Return (%) |
| $Spdr Select Fund-Energy Select Sector XLE$ | Energy Select Sector SPDR Fund | 90.74 | 4.2 | 18.1 |
| $Occidental Petroleum Corporation OXY$ | Occidental Petroleum Corp | 64.57 | 3.1 | 11.4 |
| $Apache Corporation APA$ | APA Corp | 45.08 | 12.0 | 41.6 |
| $Baytex Energy Corp Common Shares BTE$ | Baytex Energy Corp | 4.18 | 5.0 | 26.7 |
| $PBF Energy, Inc. Class A PBF$ | PBF Energy Inc | 49.11 | 2.6 | 38.2 |
| Ticker | Name | Last Closing (HKD) | 1-month Total Return (%) | 3-month Total Return (%) |
| $PETROCHINA 00857.HK$ | PetroChina Co Ltd | 5.84 | 5.4 | 13.9 |
| $CNOOC 00883.HK$ | CNOOC Ltd | 13.70 | 11.5 | 19.6 |
(Source: Bloomberg)
More about Loui:
Loui Low leads a team of analysts to perform equity and economic research and to provide investment advisory services to the organization's sales team, fund manager and retail fraternity. He has more than 10 years of experience in the stockbroking industry.
He graduated with a Bachelor of Science in Statistics from University of Malaya. He also holds an STA Diploma and is a member of the Society of Technical Analysts (MSTA) United Kingdom.
More about the Trade Radar:
Trade Radar is a weekly-updated section, featuring Loui's latest insights into market trends and hot topics. Traders may find some trading inspiration from Loui's views.
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