$BOIL - $USO - Much more room left

TL;DR: the reopening saw an oil and natural gas crunch. The prices were forecasted to be astronomical. Now with the war, Russia may have their 30% contribution wiped out. That would be the cost of oil and gas may have a 30% minimum floor coming, add in fears and anxiety, BOIL can probably reach 70-80 (it’s price in October) and USO can rise up back to 100, it’s pre-pandemic levels. Short of it, these 2 are my hedges on a long war or a scenario IF Ukraine doesn’t surrender. Russia isn’t going full mounty yet because of pipelines. When they do, they basically are saying, fuck the oil and gas. https://www.miamitimesonline.com/business/how-gas-prices-could-rise-even-higher/article_20b1955a-99ac-11ec-9879-5337e95d8980.html Russia accounts for more than 30% of Europe’s gas for home heating, industry and generating electricity, and other potential supply sources are not adequately prepared to bridge the gap if Russian gas is curtailed, energy analysts say. Meanwhile, natural gas prices in the U.S. are approximately 60% higher than a year ago. What does it mean for consumers? The conflict is adding to the surging energy prices already plaguing Europe and the U.S., crimping consumer spending and holding back economic growth. Some analysts believe regular gasoline could climb to $4 a gallon on average in the U.S. in the coming months. “That’s going to create a lot of anxiety with consumers, and our government hasn’t come up with a solution to help families with rising gasoline prices,” said Mark Wolfe, executive director of the National Energy Assistance Directors Association. Could gas supplies be totally cut off? Europe is the biggest customer for Russia’s state-owned gas giant Gazprom, responsible for 83% of its sales in 2020. Gazprom has sought to diversify by selling to China. But pipelines link much of its gas to Europe, and Russia has few liquefied gas terminals that would let it send gas to any destination with an import terminal. New connections to China are years away. “Russia’s capacity to divert gas flows to China is very limited now and by the time it grows, the EU will have other options,” said Alicia Garcia Herrero, chief economist for the Asia Pacific region at Natixis bank. Says Rystad Energy, an independent energy research and business intelligence company headquartered in Oslo, Norway, “Russian gas exports bring in more than $300 million for the Kremlin each day – revenues they cannot afford to lose.” That’s why analysts have regarded a total gas cutoff by Europe or Russia as unlikely. The two sides need each other. Russia’s also a major supplier of crude oil to Europe, supplying more than 2 million barrels a day to be refined into gasoline, diesel fuel and used by industrial firms. Russian oil could be made up more easily than gas, analysts say. If there were supply disruptions, U.S. companies could, in theory, increase oil production and export more oil to Europe, while sanctioned Russian oil might wind up in China. Positions: https://ibb.co/82kDb8N https://ibb.co/GTLBxjY

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$BOIL - $USO - Much more room left

bullish

TL;DR: the reopening saw an oil and natural gas crunch. The prices were forecasted to be astronomical. Now with the war, Russia may have their 30% contribution wiped out. That would be the cost of oil and gas may have a 30% minimum floor coming, add in fears and anxiety, BOIL can probably reach 70-80 (it's price in October) and USO can rise up back to 100, it's pre-pandemic levels.

Short of it, these 2 are my hedges on a long war or a scenario IF Ukraine doesn't surrender. Russia isn't going full mounty yet because of pipelines. When they do, they basically are saying, fuck the oil and gas.

https://www.miamitimesonline.com/business/how-gas-prices-could-rise-even-higher/article_20b1955a-99ac-11ec-9879-5337e95d8980.html

Russia accounts for more than 30% of Europe's gas for home heating, industry and generating electricity, and other potential supply sources are not adequately prepared to bridge the gap if Russian gas is curtailed, energy analysts say.

Meanwhile, natural gas prices in the U.S. are approximately 60% higher than a year ago.

What does it mean for consumers?

The conflict is adding to the surging energy prices already plaguing Europe and the U.S., crimping consumer spending and holding back economic growth.

Some analysts believe regular gasoline could climb to $4 a gallon on average in the U.S. in the coming months.

“That's going to create a lot of anxiety with consumers, and our government hasn't come up with a solution to help families with rising gasoline prices,” said Mark Wolfe, executive director of the National Energy Assistance Directors Association.

Could gas supplies be totally cut off?

Europe is the biggest customer for Russia's state-owned gas giant Gazprom, responsible for 83% of its sales in 2020.

Gazprom has sought to diversify by selling to China. But pipelines link much of its gas to Europe, and Russia has few liquefied gas terminals that would let it send gas to any destination with an import terminal. New connections to China are years away.

“Russia's capacity to divert gas flows to China is very limited now and by the time it grows, the EU will have other options,” said Alicia Garcia Herrero, chief economist for the Asia Pacific region at Natixis bank.

Says Rystad Energy, an independent energy research and business intelligence company headquartered in Oslo, Norway, “Russian gas exports bring in more than $300 million for the Kremlin each day - revenues they cannot afford to lose.”

That's why analysts have regarded a total gas cutoff by Europe or Russia as unlikely. The two sides need each other.

Russia's also a major supplier of crude oil to Europe, supplying more than 2 million barrels a day to be refined into gasoline, diesel fuel and used by industrial firms.

Russian oil could be made up more easily than gas, analysts say. If there were supply disruptions, U.S. companies could, in theory, increase oil production and export more oil to Europe, while sanctioned Russian oil might wind up in China.

Positions:

https://ibb.co/82kDb8N https://ibb.co/GTLBxjY

read-time
2 min
45.25
Target Price
7/ 10
Confidence
1-2 Months
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