Posted by CharlesT > 2022-09-09 12:52 | Report Abuse

Petron already provided for mark to mkt losses....for the hedging unrealized losses by flowing to the P&L mah!

It's quite straight fwd in Petronm's hedging cases i think...plus 1 minus 1...

As for HY's case, we will see......

Posted by stockraider > 2022-09-09 12:54 | Report Abuse

In a nutshell, Charles make a very good observation mah!

Posted by CharlesT > 42 seconds ago | Report Abuse

Petron already provided for mark to mkt losses....for the hedging unrealized losses by flowing to the P&L mah!

It's quite straight fwd in Petronm's hedging cases i think...plus 1 minus 1...

As for HY's case, we will see......

Posted by CharlesT > 2022-09-09 12:58 | Report Abuse

Most investors are funny...

Once they own a share they will only listen to the positive news

Posted by CharlesT > 2022-09-09 12:59 | Report Abuse

As for HY's cases, depends on whether u wanna believe Probability's profit projections 24 hours a day, 7 days a week here or not....

Posted by AlsvinChangan > 2022-09-09 13:01 | Report Abuse

HY trying to fool the greater fool?

Posted by stockraider > 2022-09-09 13:03 | Report Abuse

Raider do not understand whether sifu sslee & probability are greater fool loh!

Maybe they pretend to be greater fool by catching on other Greater greater fools loh!

Posted by AlsvinChangan > 14 seconds ago | Report Abuse

HY trying to fool the greater fool?

Posted by CharlesT > 2022-09-09 13:05 | Report Abuse

Posted by stockraider > 23 seconds ago | Report Abuse

Raider do not understand whether sifu sslee & probability are greater fool loh!

Maybe they pretend to be greater fool by catching on other Greater greater fools loh!

SSlee i think no lah....

As for Probability, I have seen his monkey tricks in Serbak....So I knew him well lah

Posted by CharlesT > 2022-09-09 13:11 | Report Abuse

Sslee seems to be a good man to me....

But sorry that from my observations for years good man mostly cannot do well in stock mkt (infact in biz as well)

If SSlee do his own biz I doubt if he can do well

U think OTB earns a lot of money fm stock mkt coz he is a good man ah?

Posted by stockraider > 2022-09-09 13:14 | Report Abuse

Correctloh....thats why General Raider still address Sslee as Sifu loh!

Posted by CharlesT > 1 minute ago | Report Abuse

Sslee seems to be a good man to me....

But sorry that from my observations for years good man mostly cannot do well in stock mkt (infact in biz as well)

If SSlee do his own biz I doubt if he can do well

U think OTB earns a lot of money fm stock mkt coz he is a good man ah?

Posted by CharlesT > 2022-09-09 13:15 | Report Abuse

Not many good man in I3......have to treasure Sslee....

Posted by CharlesT > 2022-09-09 13:18 | Report Abuse

As for Probability, I have seen his monkey tricks in Serbak....So I knew him well lah

Infact I have been very closed with Probability for the past many years, He is one of the very few of my friends in I3, bsides Icon8888..........until I get to know the real Probability not long ago in Serbak

Posted by CharlesT > 2022-09-09 13:23 | Report Abuse

Actually most did the same monkey tricks in I3 like Probability.....so why the fuss abt it?

Maybe i get things personally with Probability ....I thought he is one of the very few good smart guys in I3.

I was wrong.

Posted by CharlesT > 2022-09-09 15:37 | Report Abuse

i leave that to you...my conscience are clear

HAHAHAHAHAHAHHAH......the best joke I have ever heard in 2022

Posted by CharlesT > 2022-09-09 15:38 | Report Abuse

Thanks for yr joke...it made my day....

Posted by i3lurker > 2022-09-09 16:28 | Report Abuse

Good Joke
Hitler is not a monster
Guy who imprisoned daughter and make her pregnant with several children claims he is not a monster

no one in i3 claims that he is a monster

btw
I am NOT a monster too.
:)

Posted by CharlesT > 2022-09-09 16:54 | Report Abuse

I am a good monster in I3

Posted by Rabbit2 > 2022-09-09 17:06 | Report Abuse

Good monster usually appear in kid's world..

Posted by Rabbit2 > 2022-09-09 17:10 | Report Abuse

Not many people know how to compute Petron's profit by using Petron Corp's financial statement. If he's not an accountant, he must be intelligent..

Posted by Rabbit2 > 2022-09-09 17:14 | Report Abuse

The best part is even if you know, you won't share but he did.

Posted by probability > 2022-09-09 17:18 | Report Abuse

yes sslee, is simply brilliant :)..

Posted by probability > 2022-09-09 17:24 | Report Abuse

Truth cannot be suppressed very long, the earlier one investigates and verify what is the truth the more upper hand one will have

the longer one waits the higher the odds are for others to find out ahead of you..

....

HEDGE ACCOUNTING & how it is reported on OTHER COMPREHENSIVE INCOME (OCI)

https://www.youtube.com/watch?v=w5P_M9fWqGg

The above simple example for ORANGES can be viewed as CRUDE OIL for HY where the hedging is done with the intention of going LONG (the higher the future price, the higher the gain)

For refined products hedge, it is for going SHORT, the higher the future price, the greater the loss.

The net effect of the above two is what reported by HY under their OCI.

The Cash Flow Hedge (CFH) in OCI shows the hedging gain / loss for the hedged position which are closed, but the corresponding physical market transaction (change in ownership of the goods) is yet to take place to deliver the available market gross profit which is then offset by this hedging gain / loss on CFH to give the P&L exactly as it has been hedged initially.

The Cost of Hedging Reserve (COHR) on the other hand shows the hedging gain / loss for all the balance hedged position (yet to be closed) from the notional amount (refining margin swap contract RMSC), where the corresponding physical market transaction will take place within the maturity period (next 24 months) assuming the hedging positions are closed as per current spot rate.

As such, COHR is a highly hypothetical figure that changes significantly as per the market spot price of the commodity (mark-to-market) when the financial reporting period is closed.

............

Now that the refined oil products price (gasoline) had significantly retreated from the peak of 30th June, if it remains the same till end of Sept, Q3 will report huge gain on OCI

If prices of refined products relative to crude (the crack spread) are back to Q1 22, 30th Mar level, cost of hedging reserve shall be exactly back to the figure reported in Q1 22 results for Q3 22.

Posted by i3lurker > 2022-09-09 17:40 |

Post removed.Why?

Posted by CharlesT > 2022-09-09 18:18 | Report Abuse

The big boys r not keen on refinery stocks....they like to bet on new tech stocks though many r traded at PE 30 or 40...

Bila pecah i dont know lah....the music is still on

Posted by CharlesT > 2022-09-09 18:20 | Report Abuse

Why they prefer a PE 30 tech stock rather than a PE 1+ HY or single digit PE Steel stocks or single digit PE Plantation stocks?

I also dunno

Posted by CharlesT > 2022-09-09 18:22 | Report Abuse

Mayb OTB can write a letter to complaint to SC for them to look into these biased scenario??

Posted by anthonytkh > 2022-09-09 18:27 | Report Abuse

Charles, it’s coz the big fellas bought HY, steel and plantation counters a long time ago

It’s not they “prefer” new tech stock; they are opportunists that prey…

Posted by Rabbit2 > 2022-09-09 18:35 | Report Abuse

Learning new word 'Hedge Die'.. interesting

Posted by Rabbit2 > 2022-09-09 18:39 | Report Abuse

similar to hedgehog

Posted by probability > 2022-09-09 23:16 | Report Abuse

Diesel prices are likely to climb again soon

September 8, 2022

https://www.shiplilly.com/blog/sorry-diesel-prices-are-likely-to-climb-again-soon/

Cost and viability implications for the logistics industry

There are indicators that the diesel price crisis is ongoing. Such indicators belie the expectations that the economy is slowing down. Instead, demand for diesel is increasing. Some countries are already grappling with a diesel shortage. For example, many European countries are rushing to secure diesel deals because of the embargo placed on Russian barrels. As the harvest season comes to the US in the Midwest, demand for diesel is bound to rise even further. It may be that the suppliers must play a balancing act between meeting a domestic need and catering to international demand.

Diesel as an essential fuel of economic activity

John Kemp of Reuters has indicated in his oil-buying periodical that institutional traders and hedge funds are buying diesel contracts at some of the fastest rates since November 2020. In real terms, this means 9 million barrels are added to holdings. Bloomberg indicated that the demand for US diesel hit the highest level in the last half-decade. The winter is likely to bring even more demand. Indeed, the US exports of diesel reached an all-time high just last month. The biggest destinations of these exports are Europe and South America.

Other countries are putting protective mechanisms to ensure their supply of diesel. For example, India has placed exportation limits on diesel based on concerns about the adequacy of domestic supplies. Additionally, diesel from Russia has been shunned by mainstream Europe due to the existing sanctions regime that emanated from the invasion of Ukraine. That embargo will not likely end before the current year’s close. Even though there have been diesel shortages before, this one is gathering much publicity.

Government action to mitigate the risks of diesel shortages

An European Petroleum Refiners Association executive indicated at the beginning of the year that most governments were aware of the link between GDP performance and access to diesel. This was in response to the sanctions against Russia when some skeptics were worried about unintended consequences such as the current scarcity of diesel. This is no idle speculation since Russia remains the largest supplier of diesel to the European Union. It is estimated that Europe imports an average of 750,000 barrels every day from Russia, a matter of necessity given the freight transportation, heavy industry, and economic impetus.

Setting the sanction aside for the moment, the diesel market has generally experienced a much faster demand rebound than supply growth following the Covid-19 pandemic. That pattern was reflected in the market for crude oil. Some experts have noted that the demand growth has slowed down recently on the back of an expectation of a global downturn. This would make sense given the central bank rate increments and inflationary pressures discouraging buyers. However, that pattern only lasted for a relatively brief period to be replaced by an even greater demand for diesel.

An inventory that is lacking in reliability and completeness

A columnist for Reuters has noted that US crude oil inventories were failing to fully recover, despite the fuel price inflation. The implication is that the tightness of the fuel markets and the consequent price elevations will likely continue for the rest of the year. The Department of Energy in the USA reported this was that US oil inventories had fallen to their lowest levels since 1985. Indeed, the strategic petroleum reserve now stands at only 469.9 million barrels. As a result, the problems and worries are spreading to the rest of the world.

Some African countries, for example, have reported such shortages in fuel and drivers, impacting the supply chain in a myriad of ways. The Central African Republic is a case in point. Here, humanitarian organizations that have been active in the country recently have scaled back their engagement. A shortage of diesel has been partly blamed for this withdrawal. Cameroon is another case that has had to deal with street protests over dwindling fuel supplies and the inevitable soaring prices.

Posted by probability > 2022-09-09 23:16 | Report Abuse

The crises have a high potential for contagion across the globe

Brazil is another country beginning to feel the pressure of diesel shortages. Petrobras, the state-owned oil company, has warned of shortages unless the company was allowed to sell its fuels at market prices rather than subsidized rates that encourage consumption. If the traditional suppliers cannot meet the demand and there is a continued squeeze on Russian supplies, it makes for a potentially critical situation. The geopolitical context is unsuitable for turning to Russia and its associates as relief measures. Europe is also wary of its continued energy reliance on Russia, which has hampered its anti-Russia strategy in the wake of the invasion of Ukraine.

Meanwhile, the major consumers of diesel are demanding its steady supply despite the challenges in the market today. The economic recovery in the post-Covid 19 era is bound to be problematic due to the increasing demand for diesel beyond the expectations of a downturn. Economies require diesel to run, and the supply is not doing the trick. The expectations of a relief phase when sanctions against Russia are eased are not likely to come until 2023. This makes a grim reading for those in the logistics and transportation business and ordinary consumers that rely heavily on diesel.

Wrapping up

A combination of a supply squeeze and demand expansion means that diesel is in short supply. Even more worrying is the reality that the current state of the market is not likely to ease until next year. Russia is embargoed by much of Russia, and the USA must think about its domestic needs when harvests begin in the Midwest. In addition, some South American countries are rethinking their price controls on diesel and other fuels to stem demand. Meanwhile, African countries are facing civil strife and significant logistical problems due to the shortage of this essential fuel. The post-Covid 19 era is bringing new economic and political challenges that will require strong policy interventions in the medium and long run.

Posted by CharlesT > 2022-09-10 08:25 | Report Abuse

Posted by Rabbit2 > 22 hours ago | Report Abuse

Have to admit that both HRC and Petron are cyclical stocks. Just that how long the record quarterly profit could sustain. Everyone have different view.

Ok I will not include Glove this round for my argument as many said glove supply can be increased drastically within a short period of time (China's mkt share increases fm 6% to ard 20% now in 2 years time)

Not very long ago in Mar 2022 we saw Tin's price was ard USD40K+ and many MSC shareholders predicted it would stay in this high level for a long long time due to the great demand fm EV industry and shortage in supply would stay for a long long time etc. What happens next is Tin price plunged more than 50% to USD20K+ while MSC's price plunged ard 60%+ fm RM5+ to RM1.80+ now

Not very long ago in Mac 2022 we saw CPO's price was ard RM7K+pmt and many plantation co shareholders predicted it would stay at this high level for a long long time due to the great demand n supply can hardly be increased in short period of time (it takes ard 6 to 7 years to see good harvest of fruits), unlike glove. What happens next is CPO's price plunged more than 50% to RM3K+pmt now while most plantation stock plunged n traded in low single digit PE now.

Posted by CharlesT > 2022-09-10 08:32 | Report Abuse

Not very long ago in June 2022 we saw Mogas 92 crack spread was ard USD35+ and many HY n Petronm shareholders predicted it would stay at this high level for a long long time due to the never ending Russia vs Ukraine War. What happens next is Mogas 92 crack spread plunged more than 80% to USD5+ now.....in a short period of 2 months+ time

What's next? Diesel spread expected to stay at high level for a long long time due to the never ending Russia vs Ukraine War?

HY expected to do good hedging profit for a long long time or forever?

Posted by stockraider > 2022-09-10 08:45 | Report Abuse

Understanding why Prominent Previous Refinery Owner in Msia like Shell & Esso do not do hedging ?

1.The traditional business model of hardcore refinery are simple loh!
They buy physical crude & refine it to physical petrol & diesel and sell at price base on formula with reference to Crude Price, Exchange Rate & Crack Spread fixed by Msia Govt and make money mah!

They do not do fwd hedging n their natural hedge is the inventory they have in hand & their refinery to quickly efficiently process the crude to mainly Petrol & Diesel & quickly sell base on the fixed formula the msia Govt had set loh!

Now with the introduction of Hengyuan, it has modified the refinery model as follows loh!

1. Traditional Refinery Business Model as highlighted above.
2. Virtual Refinery Business Model using Paper Derivative as an investment & hedge to generate profit to be discussed below loh:

2.Virtual Refinery Business model thru pure hedging & derivative loh!
Do u notice that Hengyuan lose alot of monies consistently most of the time despite, mathematical computation on paper the derivative & hedge is highly profitable as per feedback of SSLEE and Probability leh ?

This is bcos the paper computation derivative & hedge shows profit do not reflect the reality situation & business dynamics of the trade loh! Reasons are as follows loh:

The Virtual Refinery Purchase its future crude by purchasing from NYMEX & compute it sells on Nymex sell price of Petrol & Diesel which showed a good profit when doing its hedge but how come this trade fail & registered big losses at the end leh ?

1. The mkt is very dynamic loh! On paper u may see big virtual profit by hedging future crude purchase & future sell of petrol & diesel end products....but when time come for settlement in turnout to be a loss loh!
Why leh the complete hedge trade of buying & selling here cannot convert to a easy profit, like paper indicated leh ?
a. This is bcos the movement of future crude purchase price, do not completely correlate to the selling future price of petrol & diesel price due to huge mkt volatility mah! Just within a day the business dynamic may change loh! Like within 1 day the Crude Price go up 10% whereas the Petrol & Diesel selling future price did not move at all or vice versa loh!
b. The trade initiated are pure paper swap with no delivery of physical goods, thats why it may not reflect the real dynamic of a real physical refinery mah!
c. Even it involve actual delivery of the commodities, there are extra cost & logistic to bring this commodities for processing to convert it to a profit mah!
d. Thus the virtual refinery of Hengyuan business model has shown consistent losses bcos of this challenges discussed above loh!

Posted by stockraider > 2022-09-10 08:46 | Report Abuse

If the virtual refinery of buying crude future & hedging it buy selling future petrol & diesel with a good paper profit computed by SSLEE & Probability really work, then General Raider will make billions just with Rm 10 million....by just doing repeating regular hedge base on the formula advocated by Probability & SSLEE mah!

If that is highly successful....Raider will become a billionaire, bcos it is risk free....bcos everything is hedge......with good reasonable paper profit, when the hedge is done mah!

Then why we need a refinery leh ??

The truth it is not true mah!
The deal done ....is actual speculative & unsustainable... despite fully hedge loh!

The situation & dynamics.. does not applies only to CRUDE & Petroleum mkt...but will apply to every commodity like Palmoil, Soyabean Oil, Metal etc loh!

U can do it on paper & completely hedge on paper with a reasonable profit....but the end still did not make money loh!

Thats is the reasons why....NOBLE....a large listed company in singapore dealing with trading of commodities go bankrupt despite having all the software & resources to support its trade loh!

I think sifu like SSLEE & Probability are just naive....by claiming a fully hedge position will make monies loh!

That is the reasons why ESSO & Shell refuse to do hedging loh!

Also that is the reasons why hengyuan registered a huge unrealised hedging losses on its derivative loh!
And this is beside the risk of raider fear of hengyuan intention of siphoning money loh!

Posted by CharlesT > 2022-09-10 08:55 | Report Abuse

The key word is Sustainability

If u can go to Casino and make money most of time for a long long time, then u can expect HY to make good hedging profit most of time for a long long time too

Posted by CharlesT > 2022-09-10 08:55 | Report Abuse

Fm FB i came across such incidents, some people kena lotteries very often in their life n they are having a good life now

https://www.ky3.com/2022/08/13/lucky-man-wins-lottery-twice-month/

LUCKY LOTTERY WINNERS... WIN AGAIN! - DocPlayer.net

lucky lottery winners... - The Olive School, Hackney

Real stories or ghost stories I dunno lah

Posted by stockraider > 2022-09-10 10:12 | Report Abuse

xx

Posted by CharlesT > 2022-09-10 10:16 | Report Abuse

Firstly, they sell Mogas 92 high crack spread forever Ukraine War forever......
Second, they sell Diesel high crack spread forever Ukraine War forever....

Now they sell good hedging profit 2 years or could be forever.....

What's next?

Posted by CharlesT > 2022-09-10 10:19 | Report Abuse

In the first place, why would Mogas 92 crack spread plunged fm USD30+ to USD5+ now, within 3 months' time??

Posted by CharlesT > 2022-09-10 10:26 | Report Abuse

Anyway if yr faith are really that strong in HY U should sialang with margin in HY n wait for the day to happen...like what I did in glove during Mid 2020....

Then really horseh liao....I also wish to see you rich one day in the future

Posted by CharlesT > 2022-09-10 10:28 | Report Abuse

Unlike many here, I think I never curse anyone here to lose until pxkai one

Only good wishes so far

Posted by stockraider > 2022-09-10 10:33 | Report Abuse

Remember any hedging gain due to the hedge will be use to covered more than Rm 1.3b hengyuan unrealized hedging losses mah!

Thus with current physical low crack spread.....the low margin will unlikely to translate into good operating profit for hengyuan in q3 loh!

Posted by CharlesT > 2022-09-10 10:42 | Report Abuse

Fm an established Sifu:

qqq3 has lost all his 100k capital.
I think qqq3 will lose until bankrupt.
Lose until bankrupt is too lenient for him.
I wish qqq3 will jump down from a tall building and become a vegetable and suffer for another 20 years before he dies.
I hope my wish will come through.

Another case:
Posted by Philip ( buy what you understand) > 2020-06-07 08:29 | Report Abuse

I'll just wait until your next big loss for you to disappear from i3investor again. Gamblers like you win 200% one day and lose 100% the next.

Usual run of the mill speculators.

But your initial comment that fa people won't buy glove stocks is silly. I did, I have and I have earned more than 16x my money in topglove over the years. You are the one who got lucky kid.

Let's see how you compound that luck when the speculation ends.

Maybe disappear from i3investor for good this time.

Posted by CharlesT > 2022-09-10 10:44 | Report Abuse

Why wanna curse people leh? Bad karma...

U see i always give blessings one.....

To Sslee hoping he can recover his losses in stock mkt eventually

To Probability hoping he can make good money fm HY

Despite our differences

What for to curse people leh aiyo

Posted by probability > 2022-09-10 10:45 | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?
............................................................

EU refinery are 90% simple type, asians like HY are mainly complex type

for simplicity they product yields are as per below:

keyword note - this output ratio cannot be altered

Simple refinery:
...............

40% Gasoline (crack spread : 7 USD/brl)
20% Diesel (crack spread: 50 USD/brl
10% Jet Fuel and other (crack spread at: 20 USD/brl)
30% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 7.3 USD/brl

Complex refinery:
.................

30% Gasoline (crack spread : 7 USD/brl)
50% Diesel (crack spread: 50 USD/brl
18% Jet Fuel and other (crack spread at: 20 USD/brl)
2% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 30 USD/brl

Due to good margin in refining in Q2 for all refined products including gasoline, everywhere refinery had increased their output by maximizing utilization rate at 99%..

by July gasoline supply had risen more than demand (user of gasoline have the choice to limit their consumption by say working from home)

but despite refineries squeezing all they can on output, the diesel supply still cannot meet demand (diesel mainly used for transportation and manufacturing industry)

Now at this limit of refining output (intentionally delaying maintenance), the diesel is still short...

results is lower crack spread for gasoline and still high crack spread for diesel...


keypoint:
.........

now, at the above low avg refining margin due to fuel oil, its likely that EU refinery will reduce output if gasoline crack is too low, further reducing diesel availablity

Its like natural mechanism in place to sustain Diesel & Jet fuel margin

unless logistics industry, airlines and manufacturing itself slows down due to high price..its unlikely diesel & Jet fuel crack to come down

thats why its actually good for oil price to come down to sustain business and thus demand for benefit of refineries

Posted by CharlesT > 2022-09-10 10:45 | Report Abuse

Personally I think I3 is very toxic

Posted by CharlesT > 2022-09-10 10:47 | Report Abuse

Posted by probability > 18 seconds ago | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?

I wish finally all the big boys like Fund Managers will read n understand n fully agree with yr 24 hours non stop kind sharings here n push HY to PE 30 like tech stocks

Posted by stockraider > 2022-09-10 10:47 | Report Abuse

Both Gasoline & diesel future price came down, thats why the future crack spread for Mogas 92 is so low mah!

Lu tau boh ?

Posted by probability > 29 seconds ago | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?
............................................................

EU refinery are 90% simple type, asians like HY are mainly complex type

for simplicity they product yields are as per below:

keyword note - this output ratio cannot be altered

Simple refinery:

Posted by probability > 2022-09-10 10:48 | Report Abuse

yea..who knows charlest is now working for IB..great potential actually!

Posted by CharlesT > Sep 10, 2022 10:47 AM | Report Abuse

Posted by probability > 18 seconds ago | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?

I wish finally all the big boys like Fund Managers will read n understand n fully agree with yr 24 hours non stop kind sharings here n push HY to PE 30 like tech stocks

Posted by probability > 2022-09-10 10:48 | Report Abuse

i have no hope on raider..even ah fah stopped listening to him