Oilcollapse
UKOIL next subwaveThe double zigzag retracement is near the upper resistance. There ought to be a reversal move to it's intermediate support levels.
No obvious fundamentals yet. Just a view...
$DHT LongI don't know if wave theory really even works but It helps me organize my thoughts. DHT and tanker companies are in a really good position with the oil collapse, but if the S&P collapses any further it could drag down everything with it. Projected EPS is around 50 cents for q2 2020, a %330 percent increase from q2 2019, at 19 cents, and reports come out may 13th.
This time last year $DHT traded at 4.80 a share and assuming a %330 increase of EPS, which could very well be sustained throughout the coming recession and global shutdown, the stock could be expected to itself experience a %330 increase from 4.80 and reach around $12 a share, which follows a loose trend line from previous highs, and also matches a 38.20% fib extension for wave 4 I did, which I ended up doing incorrectly :/ but maybe its a sign regardless. Let me know what you think.
Anyways, trade how you want, I will be checking this to see how correct I am and give updates as I think of things.
OIL FUTURES, STORAGE and STRATEGIC PETROLEUM RESERVEFuture prices may be related to the fulfillment of the contract associated to them. In the case of Oil, the Future Contract Specs for WTI can be found here (www.cmegroup.com). So upon the contract Expiration (Last Trade date that can be found here: www.cmegroup.com), you will have to receive the Oil Barrels (1000 per Future purchased as per this contract in this case). This requires storage capacity, and given the current Covid scenario, this has been compromised (read more about this here: www.nytimes.com).
It seems that given that the price of the futures are negative, it means that sellers are willing to PAY buyers to take the asset from them... so this might mean that it is cheaper for them to have someone take the oil from them and take care of the storage, than having to do it themselves (having to store more than they can, or even drop production to be able to prevent more supply from compromising current storage capacity and the costs associated with it).
I think that Governments and other entities with high storage capacities might stand to benefit from this. They can get paid to take the oil from these suppliers, while also increasing their Oil reserves. In the case of the US, for example, the US has the Strategic Petroleum Reserve (en.wikipedia.org(United_States)), read more here (www.spr.doe.gov). If they acquire the oil barrels now, when things normalize, they will be at an advantage with higher volume supply than others, to sell. They will be able to regulate the Oil market and other markets that depend on it.
Will be looking into it as it evolves. Thoughts?
