Mar. 25 at 7:51 PM
So why do you think upstream oil producers like
$OXY $DVN $EON $OVV $APA are going up when WTI (
$USO) has fallen 1.5% today? It has to do with the angle of the WTI strip. It's not just one number, morons, the nearest-month futures contract. That WTI may be down but the whole strip and the direction of WTI futures contracts have gone up. So the curve is now flatter whereas it was steeply descending, squeezing out the area under the curve. As it flattens out, we see more FCF accruing to these companies, pushing up NPVs and prices.
