Compare today's headline with the one on 10th Jan lower on that page. Shorting oil is clinging to a belief that OPEC won't keep to their cuts, but OPEC is looking increasingly reliable as time passes. Also the demand for oil is all the time growing and catching up with the volumes that were coming from the producers when they were pumping oil at unsustainably high rates. 2017 is recovery year.
Looks like the shorters are clinging to TLW as that "leveraged" bet on the on the oil price but their outlook is far too short sighted (as one would expect I suppose). Along with the shale supporters are overlooking the problems in the oil services industry:
The cost of oil services is bound to rise as exploration picks up with the oil price recovery, doubling the pain for the shale producers.
TLW will certainly be a "leveraged" bet on oil if and when the oil price increases. Remember that even the grossly exaggerated pessimism about TLW's trading update was against the backdrop of $50 oil. Just $60 will give TLW and additional $10 profit on 88k barrels per day. That's $880k every day, over $300m pa.
Then remember that we know that there's a strong likelihood of a substantial upgrade to the Kenyan reserves. That could allow TLW to pull another farm out deal out of the hat without even diminishing its own reserves below current value.
Buying TLW at its current share price means you get a good producer on the cheap with the top class exploration business thrown in for free! Just read all of those "downgrades". All they mention is the production side of the business.
So you're saying $52:00 average and your hero Crispy is saying the FT100 will crash 80% All I can say is you are a nice pair. No I will say something : You will not see oil falling BELOW $52:00 this year.
Oil is in a new channel between $50 and $70 should it hit the upper channel top which is forecast this year then tullow will be nearer £5 a share than £3.
Actually the poo forecast for this year is c. $52 average....DYOR
Furthermore even 5 GBP per share is a sorry state of affairs when the SP was once 1600 +. Of course a lot of mug punters here on the bb have a LONG way to go [and are trying, unsuccessfully,] to ramp up the prices.
Tlw failed to deliver in UG - why should they be successful in Kenya ?
DYOR - the company is in dire straits with the CFO retired off on "medical" grounds, tlw violating the FRC rules with its "re-structuring" of key staff, a lack lustre RNS and TEN production was overhyped [as expected] and not to do as wel as expected.
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