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Two words about the “victory” of Saudi Arabia

Here Mykola Pardubicky have toscanol article on “the Brest world of Putin”, and so want to chew those who read only if you believe.

Два слова о «победе» Саудовской Аравии

If we are to believe my opponents, the Saudis should celebrate. And at first glance all it is. They leveled their quotas with the Russian and thereby straightened in their favor imbalances of past agreements OPEC+, when Moscow forced them to produce less and thereby at their own expense to pay for the assignment market to the Americans.

Yesterday we talked about the fact that the planned reduction did not affect the futures quotes (sales in the future). The market digested information figured that in General the extra oil it is, and the balcony of 1 billion barrel. formed over the last few months will resolve soon. And because the price of Brent crude all day hovered at similar levels to before the announcement of OPEC++ days.

Два слова о «победе» Саудовской Аравии

Logically, the country that won the battle of victory in a stably stagnant market needs to obtain a competitive advantage over the opponent and this must find a reflection on the stock exchange where the specialists do not believe in the propaganda, and believe in the power of money, and most importantly, not like them to waste.

What happened to Saudi oil April 13? How much it has risen relative to the reference marks? I think you already know the answer. And who do not know, misleading in Saudi Arabia have drastically reduced the price of its own oil, dropping it to a historic low. For example, for southern European countries, the discount for Arab Extra Light will increase almost twice – from 5.8 to 10.3 per dollar to the price of Brent.

Gesture worthy of a winner, isn’t it? But if without jokes, then because of the glut of Saudi oil, as well as a complete fiasco for her and selling futures contracts in March (with a supply in April-may), Saudi Arabia remains the only chance to get rid of it is to sell in the spot (current) market Dated Brent, where the time of the transaction to the shipment of goods takes place from 7 to 15 days.

The price of spot site yesterday Dated Brent was around$ 24 per barrel, that is a lot less than for futures contracts (32$ per bbl.). And it’s on the delivery conditions Cif. That is shipping and insurance at the seller’s expense (at least$ 5 per barrel for southern Europe). So, at the hands of the Saudis for this oil will receive 24-10,8-5=8 small cents dollars.

And at the same time, you need to understand that given the conditions of delivery cif and the timing of contracts in 7-15 days, the message says that the Saudis intend to sell are already largely submerged and sent to the destination of oil. But they are unable to sell more in March!!!

That is, Saudi Arabia is trying to get rid of their excess at any available price. If only this oil do not clutter their stores and not have to pay for storage on tankers.

And I understand them. The Saudis will soon follow the example of neighbours of the UAE, where the terminal in Fujairah operators already reject the requests of traders and refineries for storage of crude oil and petroleum products. The reason? Free volumes are either already filled or rented. And I assure You, if this price is not found the buyer, then discounts the Saudis will become even higher. So is the situation of “winning in the March battle of” the Saudis.

And this, I repeat, the news just one day, and the first trading day after the alleged “Grand victory”.

And if someone else at the childish naivete thinks that Riyadh continues to struggle with Moscow, dojima it to the end, I hasten to disappoint. Take again the same news of the same first trading day after the conclusion of Russia’s “oil Brest peace”.

The position of the losing Moscow is truly “awful.” Just one day futures on its Urals crude oil rose by nearly 20%%.

Два слова о «победе» Саудовской Аравии

But because “trembling in terror” Russians, unlike the “victorious” of the Saudis, not in a hurry to go cap in hand to customers, offering their oil for a pittance. On the contrary, they raise the stakes and demand for it is 20% more expensive than the day before.

The secret to this simple. It opened yesterday in an interview with RIA Novosti the head of “Gazprom oil” Alexander Dyukov, who shared with the journalists with the problems of their company in terms of the quota for may:

“The only thing that will be of contractual obligations. Actually we are all the volumes of oil may have already placed on the market.”

That is, “Gazprom Neft” oil for April and may have already sold out and now she has problems where to find extra oil to fulfill existing contracts, if she will have to cut production quotas under the OPEC agreement++.

And the same problems today and other Russian suppliers of oil. And last but not least this is made possible because of the conclusion just before the OPEC deal++ contracts with China for delivery in April – may, 1 million 600 thousand tons and Belarus, where Moscow today for quite an acceptable price added an impressive volume of Urals (on the average on 300 thousand Barr. a day). Now, as it turns out not enough on the market and put pressure on the price of this grade, pushing it up.

Here is the oil “defeat” and “victory” Saudi Arabia turns. And I analyzed only the first trading day.

Me someone will continue to convince about the smashing victory of Saudi Arabia about the oil and the humiliating Brest peace for Moscow? You and I live on the same planet, gentlemen opponents? Or you live in some parallel worlds?

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