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Strategies & Market Trends : The Aristocrats (tm)

NNVC 1.290

-2.3%

3:59 PM EST

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To: sense who wrote (3481)	3/12/2022 8:06:30 PM
From: sense	Read Replies (1) of 5687

Interesting to note, while mulling CPG, that... in the oil portion of this from ZH... that what I've been saying about the market's overly linear thinking in pricing of oil shares... is in fact rigorously true. Apparently we're not supposed to be able to anticipate more than linear impacts from leverage or directly from oil price changes occurring... as the linear "are" the fundamentals ? Amusing to note that OXY correcting some of its obvious under-valuation as oil prices rose... is described as "a disconnect from fundamentals"... although... Warren still appears to have won the trade... no matter the noses disjointed by it ? --------------------------------- GS: Energy stocks should continue to rally alongside oil price "We continue to recommend Overweight positions in Energy and believe the sector is well-positioned to keep outperforming in the current environment. The sector continues to trade closely with crude oil prices, which our commodity strategists expect will rise further as the current geopolitical conflict exacerbates the market’s supply-demand imbalance" (sounds very consensus and not that thought-leadership:ish...) No, it is not Oxycotin... Buffett’s recent buying in OXY making the poster child for ‘crude beta’ completely immune to the pullback in oil prices, as retail investors piled in… with some joking the Oracle of Omaha’s involvement allowed OXY to achieve meme stock status. Either way, several dedicated investors balked at the stock’s disconnect with fundamentals... A few factors whipping oil prices around this week 1. The US and UK formally sanctioning Russian bbls 2. The suspension of Iran nuke negotiations in Vienna (seemingly due to Russia complicating matters) 3. US discussions with Venezuela about boosting output… although any potential step-up here would be small initially 4. The UAE indicating a willingness to increase its supply, although subsequently reiterated support for the OPEC+ agreement that specifies country-specific quotas 5. The IEA saying it could release a “substantial amount” of incremental reserves if necessary (last week’s coordinated 60mm bbl release was only 4% of its members’ reserves) 6. Putin noting “positive movement” in the talks with Ukraine 7. Energy consultant Rystad saying Brent could reach $240 this summer if countries continue to sanction Russian oil 8. The US oil rig count rising by +8 WoW to 527, after dipping by -3 last week (Morgan Stanley oil specialist sales)

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