I recently listened to a podcast where Daniel Pena made some speculations regarding the Aramco IPO.
He stated that he believed that the company has far more barrels of crude on hand than they are currently reporting. Because the company is only selling 5% of the shares, Pena speculated that they could only be going public in an attempt to show off their surplus. Thusly, driving down the price of crude, and starving out the North Dakota Baaken.
Last month, Bloomberg reported that U.S. Shale, a Texas oil company, is ramping up production despite OPEC's requests to scale back. This seems to support Pena's claims.
Hypothetically, if the theory holds true, and the price of crude drops, can we expect a significant market correction following the IPO (similar to the drop in January/February of 2015 when crude dropped?)
Thanks ahead of time for any info
Submitted June 22, 2017 at 05:27PM by husetj http://ift.tt/2rX2N3N
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