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For the past 3yrs, Sam Tsien (OCBC CEO) has been consistently saying that he does not see a recovery for the OSVs unless oil >60 consistently.
This is significant not cos he is a gr8 forecaster, but cos he is OCBC's CEO i.e. banks will not lend for oil<60.
Brent bottomed out ~30 in 2016, spent 2017 in 50s, broke 60 in 2018 and hit 85 on 1Oct18. Analysts called for $200 oil.
2nd Oct - Jamal Kashoggi got murdered and oil fell back to 50s and is hovering ~60s now.
For until Trump shuts up and OPEC acts led by Saudis, oil will find it hard to rally, and thus banks will not lend. Unless O&G players intend to fund capex, working capital etc solely out of equity, demand will not pickup. i.e. it all boils down to oil price.
I suspect the consortium of banks were willing to refi Ezion in 2017-2018 thinking oil bottomed and perhaps thinking state support, but now reluctant since oil collapsed and Temasek ended up being flippers i/o patient $.
Good ol' addage - banks lend umbrella when sun shining and withdraw when starts to rain.
This is significant not cos he is a gr8 forecaster, but cos he is OCBC's CEO i.e. banks will not lend for oil<60.
Brent bottomed out ~30 in 2016, spent 2017 in 50s, broke 60 in 2018 and hit 85 on 1Oct18. Analysts called for $200 oil.
2nd Oct - Jamal Kashoggi got murdered and oil fell back to 50s and is hovering ~60s now.
For until Trump shuts up and OPEC acts led by Saudis, oil will find it hard to rally, and thus banks will not lend. Unless O&G players intend to fund capex, working capital etc solely out of equity, demand will not pickup. i.e. it all boils down to oil price.
I suspect the consortium of banks were willing to refi Ezion in 2017-2018 thinking oil bottomed and perhaps thinking state support, but now reluctant since oil collapsed and Temasek ended up being flippers i/o patient $.
Good ol' addage - banks lend umbrella when sun shining and withdraw when starts to rain.