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Do Oil Market Fundamentals Justify $40 WTI – OilPrice.com

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Do Oil Market Fundamentals Justify $40 WTI? | OilPrice.com

Osama Rizvi

Osama is a business graduate and a student of international relations. Currently working as freelance journalist, covering commodities and geopolitics.Osama is a regular contributor to a variety…

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Falling stocks

Oil prices have been locked in the current price range for months now, with price volatility dropping drastically. It seemed that only inventory reports, OPEC’s compliance rate, and the re-opening of various European countries such as Spain and Italy could trigger price movement. But the current price cannot be justified if we refer to fundamentals alone. It is clear that the draws from inventories that we are seeing aren’t driven by genuine demand. China’s buying spree appears to be slowing down in September after the country has stocked up on cheap crude during the summer months. 

Source: https://www.macrotrends.net/2480/brent-crude-oil-prices-10-year-daily-chart

The recent optimism in the markets is an example of the phenomenon Andrei Shleifer and Nicola Gennaioli outline in their book, A Crisis of Beliefs, in which good news is over-represented while tail risks are largely ignored. Then, when those tail risks surface, there is a crisis or a crash. We may soon see a similar situation unfolding in oil markets. That there is no sustainable demand recovery in the U.S., Eurozone, or Asia should be a worrying fact for oil market analysts. A Second COVID-19 wave would only make matters worse and the threat of an escalation in the trade war between China and the U.S. is another near-term risk to consider for oil markets. 

Rystad Energy estimates that another wave of COVID-19 would once again halt the recovery of oil demand. If countries around the world experience a second round of lockdowns, then about 3.7 mbpd of demand for oil could be lost. The case for jet fuel is even worse, as international travel is not expected to recover to pre-COVID levels any time soon. 

The unwinding of OPEC+ production cuts will only add to the market glut, with Rystad forecasting a total surplus of 170 million oil barrels being created between August and November.  Related: Gold Could Be Heading To $5,000

The Monthly Oil Market Report from OPEC states “The demand for oil is estimated to see significant y-o-y developments; however it will remain far below pre-COVID-19 levels”. It goes on to state that the outlook for recovery remains uncertain. All of this is apparent when looking at climbing global unemployment levels, falling consumer spending, and a wave of small and medium businesses going bust. With all of this data, it is important not to confuse improvement or positive sentiment with a return to ‘normal. 

The recovery in global trade is also slowing down as the graph above illustrates. Meanwhile, there is a plateauing in the activity of emerging markets. 

Chart by Primary Vision Network

We recently saw prices fall below $40 for the first time since June as the above demand fears began to weigh on oil markets and the summer driving season disappointed. As these demand factors gain more attention, it should be apparent that the current price range cannot be justified by oil market fundamentals. 

Slowing economic activity around the world, restricted mobility, and fears of another trade war are just a few of the key factors that will continue to weigh on oil prices and could cause a significant move to the downside. 

By Osama Rizvi for Oilprice.com

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Stop Asking Your Interviewer Cliché Questions

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Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.

In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.

English philosopher Francis Bacon once said, “A prudent question is one half of wisdom.”

The questions you ask convey the following:

  • Your level of interest in the company and the role.
  • Contributing to your employer’s success is essential.
  • You desire a cultural fit.

Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:

  • “What are the key responsibilities of this position?”

Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”

  • “What does a typical day look like?”

Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.

  • “How would you describe the company culture?”

Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”

Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.

  • “What opportunities are there for professional development?”

When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.

Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.

Here are my four go-to questions—I have many moreto accomplish this:

  • “Describe your management style. How will you manage me?”

This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.

  • “What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”

This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”

  • “When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”

Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.

  • “If I wanted to sell you on an idea or suggestion, what do you need to know?”

Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.

Other questions I’ve asked:

 

  • “What keeps you up at night?”
  • “If you were to leave this company, who would follow?”
  • “How do you handle an employee making a mistake?”
  • “If you were to give a Ted Talk, what topic would you talk about?”
  • “What are three highly valued skills at [company] that I should master to advance?”
  • “What are the informal expectations of the role?”
  • “What is one misconception people have about you [or the company]?”

 

Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.

_____________________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

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Canadian Natural Resources reports $2.27-billion third-quarter profit

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CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.

The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.

Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.

Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.

On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.

The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Oct. 31, 2024.

Companies in this story: (TSX:CNQ)

The Canadian Press. All rights reserved.

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Cenovus Energy reports $820M Q3 profit, down from $1.86B a year ago

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CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.

The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.

Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.

Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.

Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.

On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.

This report by The Canadian Press was first published Oct. 31, 2024.

Companies in this story: (TSX:CVE)

The Canadian Press. All rights reserved.

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