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WTI Crude Tops $50, Energy Stocks Soar To Biggest Week Since 2008 (But Credit Ain't Buying It)

Tyler Durden's picture




 

WTI Crude is back above $50 to its highest in almost 3 months following a 10%-plus gain on the week (the 2nd best since Jan 2009). This surge has sparked the biggest surge in European and US Oil & Gas stocks since 2008 as Bloomberg notes, output from the world’s biggest consumer drops and Shell and PIMCO claim the worst may be over (while Goldman sees "lower for longer" suggesting this rally is a squeeze). However, while Energy stocks and raw materials are soaring, credit markets remain notably less impressed.

 

Following the 2nd biggest week in crude since January 2009...

 

WTI Crude broke above $50 for the first time since July...

 

“The stocks have been oversold over the past year and that’s helping the rally now,”Jason Kenney, European head of oil and gas equity research at Banco Santander SA, said by phone from Edinburgh. “Question is where will oil prices settle now? Investors think oil companies can weather the storm because they’ve got so many levers to pull.”

However, Credit markets remain notably unimpressed (and given their focus on cashflows, we suspect at this level of risk, they are less momo and more fundamentally driven)...

 

As Bloomberg reports,

Oil may rise to a “baseline” of about $60 a barrel in one year’s time as the impact of supply cuts becomes more evident from early 2016, Greg Sharenow, an executive vice-president at Pimco, said in an e-mail. U.S. crude output is down about 440,000 barrels a day from a four-decade high of 9.61 million barrels in June.

 

Still, companies remain cautious after a rally earlier this year was shortlived. While production cuts may help draw a line under the rout, prices are set to remain “lower for longer” because of excess inventories, according to Pimco, which manages $15 billion of commodity assets. Shell plans for a long stretch of low prices, Van Beurden said this week in London.

 

“People could be thinking, how much worse can it get from here, so there’s a rotation from short positions to long,” Michael Powell, a managing director of investment banking at Barclays Plc, said in London this week. “Then you ask, is this the spring of this year all over again?”

Charts: Bloomberg

 

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Fri, 10/09/2015 - 09:27 | 6648490 Amateur Society
Amateur Society's picture

^ RABBLE RABBLE RABBLE!!

Fri, 10/09/2015 - 11:58 | 6649188 Deathrips
Deathrips's picture

Oils going to the 20s.

 

Consumer and industrial demand down. Massive new suppliers coming on line. Russia working with iraq and syria and iran...equals over supply.

 

Without war, alien invasion, massive oil fields catching on fire....its going down

 

RIPS

Fri, 10/09/2015 - 09:28 | 6648496 NoDebt
NoDebt's picture

This is a classic year-end levitation in everything.  How many years have we seen this happen in a row?  I've lost count.

Fri, 10/09/2015 - 09:29 | 6648505 Dr. Engali
Dr. Engali's picture

Eleventy two.

Fri, 10/09/2015 - 09:31 | 6648516 LawsofPhysics
LawsofPhysics's picture

Well in October of 2011 we actually tanked, just ahead of "twist" or QE2 or Qe3, can't remember, aw fuck it!

no spoon.

Fri, 10/09/2015 - 09:29 | 6648504 LawsofPhysics
LawsofPhysics's picture

Who gives a shit about paper bullshit?

Some people will have access to the calories and commodity chemicals required to maintain a decent standard of living.  Most will not.

Same as it ever was...

Fri, 10/09/2015 - 09:31 | 6648517 buzzsaw99
buzzsaw99's picture

at $50 big oil will maintain dividends and bonuses but cut capex to the bone. kick the can bitchez.

Fri, 10/09/2015 - 09:39 | 6648548 Chief Kessler
Chief Kessler's picture

Word on the Detroit rock city streets sez Ted Nugent is buying up all the Crisco and wristwatches

that the stars and bars can sell him and his she male goat boyfriends, ladies........?

Fri, 10/09/2015 - 09:32 | 6648519 FreeShitter
FreeShitter's picture

Oil to 70

Fri, 10/09/2015 - 09:39 | 6648547 Herdee
Herdee's picture

Suckers rally,just manipulated like all markets in order to give big oil in the U.S. the chance to hedge on the downside for winter recession.All the crooks on Wall Street need another load of suckers for a big fat pay check before Christmas.

Fri, 10/09/2015 - 09:42 | 6648558 robertocarlos
robertocarlos's picture

Head and shoulders, knees and toes. Short of WWIII, it's going down. 

Fri, 10/09/2015 - 09:42 | 6648562 BandGap
BandGap's picture

I have a wood stove and a fireplace. Manual pump for the well as a backup. Shitloads of wild game all around, turkeys in the area use my property for what many consider to be orgies. No, we don't watch. One acre set aside for a garden in the spring, plenty of strong backs to help out.

Wait, what?

Fri, 10/09/2015 - 09:49 | 6648584 Dr. Engali
Dr. Engali's picture

The gun range that I practice at has wild turkeys running all over the place. One day my son an I were shooting and I noticed one watching us at the corner of the woods. We stopped shooting and watched him, then suddenly he ran across the range and about twenty or so turkeys followed him all evenly spaced apart at around three yards each. It was funny as hell. Looked like they were all at a crosswalk waiting for the traffic to clear.

Fri, 10/09/2015 - 09:43 | 6648565 Monetas
Monetas's picture

Black Friday .... the day after giving thanks to our creator .... for all our blessings .... and the beginning of the Christmas season .... for children of all ages .... who love the baby Jesus .... yeah, let's call it BLACK FUCKING FRIDAY .... people will think it's cool ?

Fri, 10/09/2015 - 09:45 | 6648573 Chief Kessler
Chief Kessler's picture

Have you ever had a white russian? guess what the bartender puts in yours?

Fri, 10/09/2015 - 10:03 | 6648637 Monetas
Monetas's picture

On the Pacific side of Baja .... we have Pismo clams .... white shell, pink meat, fresh taste .... on the Sea of Cortez side .... we have Chocolatas (clams) .... brown shell, orange and brown meat, gamier tasting ?

Fri, 10/09/2015 - 10:01 | 6648646 adr
adr's picture

This isn't as much of a bullshit move as the end of August, but still insane.

Nothing can match the insanity of the $15 three day surge to end August. A month and a half of price declines erased in 15 minutes of trading.

Oil could go to $80 by November and we'll have $4.00 gasoline. $60 oil is the new benchmark for $3.00 gasoline nationwide. During the first mega run it took $100 oil to give us $3.00 at the pump. Now it's $60.

Fri, 10/09/2015 - 10:13 | 6648703 venturen
venturen's picture

A major crash is coming...there is absolutely no reason for this to go up....there are oceans of oil everywhere....record storage everywhere...canada, sinapore, USA, Europe, Middle East, China, Russia.... 

They are fracking oil and leaving it in the ground...waiting for the price to go up....supply is everywhere and demand is flat to down

Fri, 10/09/2015 - 10:40 | 6648797 RockRiver
RockRiver's picture

Do you want to be right, or do you want to make money?

 

Dont fight a trend, even a small one.

Fri, 10/09/2015 - 10:26 | 6648756 Hohum
Hohum's picture

Good news actually.  Higher price approaches marginal cost of extracting the stuff.  I assume all of us want more oil burned, right?

Fri, 10/09/2015 - 11:29 | 6649022 scubapro
scubapro's picture

hhmmm....from approx 40 to approx 60;   then to 44/48 range, pop to 50.....please, cover your shorts, get long....%'s are fun at this level...plenty of 30/50/70%  rips and dips to come.    do I hear 28?   or another 'could never happen' number?   when sellers must sell at any price (frackers AND saudi)  prices tend in a certain direction

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