11am update - Oil set for much lower levels

Whilst the broader equity market is merely in micro chop mode ahead of the holiday, the real action is in the energy sector. Oil prices remain under severe downward pressure (not least via the strong USD).. and this is causing havoc in the oil/gas service sector.


USO, daily

SDRL, weekly

Summary

*if Oil $60 or so, USO will be somewhere in the 24/20 zone by next spring.
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As for Sea Drill, not only did they miss estimates by 50%.. but they suspended the dividend. This is pretty serious, and it would seem that Q4 and Q1 earnings will be much worse. There is little hope of a dividend again until Q4 of next year.
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Meanwhile... it is a beautiful sunset in the land of Fire and Ice..


Enjoy the view.
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back 12pm