The Clock is ticking..

Romano Sala Tenna

Katana Asset Management

The Clock is ticking... for OPEC. Whilst all of the recent focus has been on the likes of Santos and Woodside, it should not be lost on investors that as every day passes by, OPEC is pumping away literally hundreds of millions in lost royalties. At the mid-point of 30.5m barrels per day and a Brent Crude price hovering around $US60, OPEC is foregoing 30.5 x $40 = $1.22bn per day in lost profits. Since the rout started in October, OPEC has foregone an estimated $180bn. It is no surprise therefore that on the past 5 occasions that we have witnessed such a precipitous decline, the oil price was on average 52% higher within 6 months of making its low. With US oil inventories at record highs and climbing, there is still time. As a precaution, we have built 1/4 of our position in the event that oil rebounds prematurely. However we will look to take the main position once US stockpiles turn (structurally)downwards.


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Portfolio Manager
Katana Asset Management

Katana Asset Management was founded in September 2003 as a boutique investment management firm. Katana employs an all opportunity investment mandate being style, sector and market cap agnostic.

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