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quote:
Originally posted by bfw:
quote:
Originally posted by g-man:
quote:
Originally posted by WineTrooper:
When it happens, I think we see a 15-20% correction with the amount of dumb money in the market now. Maybe Dow 20,000. I’ll be a buyer there and will probably go heavy on oil stocks at that time. We are ripe for a commodity rebound and I suspect that regardless of the market, oil will be a safe play.


i dont think so

North america just produces soo much damn oil and i dont see it slowing down with mr orange at the head.

that said, hard tangible commodities are always a nice spot to hide some money


The US produces just under 50% of its oil needs even after the shale revolution.

Plenty being imported on a daily basis.

Meanwhile, worldwide oil demand grows every year (rapidly lately) and companies have reduced investments globally over the past 3 years.

There is a reason WTI is up from a low of $26 to $65. The Saudis and Russians want it and shale cannot meet worldwide growth alone.

Bfw


I believe that the US is producing 10 MM bbls a day and importing only 2.5 MM bbls a day and overall is a net exporter of energy.
quote:
Originally posted by ThistlinTom:
I believe that the US is producing 10 MM bbls a day and importing only 2.5 MM bbls a day and overall is a net exporter of energy.


Your production number is correct, just recently surpassed the 10 MM bbls per day, but the imports are 8 MM bbls/day. That is the average of the past 4 weeks, which is down about 4% from the same period last year.

You guys need lots of heavy crude, but produce little. Enter Canada, Venezuela and Mexico.
quote:
Originally posted by steve8:
quote:
Originally posted by ThistlinTom:
I believe that the US is producing 10 MM bbls a day and importing only 2.5 MM bbls a day and overall is a net exporter of energy.


Your production number is correct, just recently surpassed the 10 MM bbls per day, but the imports are 8 MM bbls/day. That is the average of the past 4 weeks, which is down about 4% from the same period last year.

You guys need lots of heavy crude, but produce little. Enter Canada, Venezuela and Mexico.


Exactly. The Americas make alot more oil than generally given credit for. Oil prices may have been trading up but what's the possible upsidenin putting money in oil? I don't see oil going back to the 100+/barrel range anytime soon esp w markets coming down.
quote:
Originally posted by bfw:
quote:
Originally posted by g-man:
quote:
Originally posted by steve8:
quote:
Originally posted by ThistlinTom:
I believe that the US is producing 10 MM bbls a day and importing only 2.5 MM bbls a day and overall is a net exporter of energy.


Your production number is correct, just recently surpassed the 10 MM bbls per day, but the imports are 8 MM bbls/day. That is the average of the past 4 weeks, which is down about 4% from the same period last year.

You guys need lots of heavy crude, but produce little. Enter Canada, Venezuela and Mexico.


Exactly. The Americas make alot more oil than generally given credit for. Oil prices may have been trading up but what's the possible upsidenin putting money in oil? I don't see oil going back to the 100+/barrel range anytime soon esp w markets coming down.


Actually, the US is getting too much credit lately for its rising production.

The world uses about 100 million barrels per day. The US produces about 10 million or 10% of that.

The issue is production is declining in most other nations and OPEC is limiting supplies along with Russia. Venezuela is on the verge of chaos and almost 2 million barrels per day could be lost if they go offline.

The Permian alone (which is where production increases are coming from) will not be able to match world growth alone.

So $100...not this year...but WTI hitting $80 is a significant possibility. This during a time when oil equities are priced for lower levels. In fact, the energy index recently had its lowest level of market cap vs the overall index ever!

So, all oil equities need is for sentiment to change, shorts to cover and move on and they could see significant appreciation.

Bfw
Interesting take, that you think the world is acutally going on the up tick where as i think we're entering a softening cycle.

But yes, my rebuttal is simply a reflection of my belief in a down cycle in response to winetrooper, if you think the global economy still has alot of juice left then, my below analysis wouldnt apply.

But!

The Americas, not just the US has a significant amount of Oil supplies, production may only be the numbers you quoted but that clearly doesnt tell the story when oil prices go up. The supply in north america puts a very heavy downward cap on where the
price of oil can rise.

Alot of this has to do with OPEC + Russia agreeing to cut and Venezuela in a shit hole so they cant sell anything.

We're also starting to see that the North Americans ramping up production to the highest in 10 years, OPEC is starting to break @ the 65$ mark and have increased outputs in Jan. Russia has stated that they're going to start pumping more again too.

Add that to a future potential loss of usage when a larger majority of car manufacturers move towards direct electric engines all point to a limited upside to oil in the long run.

I'd say 75$ is the possibility and 80$ is the stretch. but with WTI @ 65$. 80$ only represents a 23% gain. That's a long holding period / risk for so little gain.


vs. the excellent recommendation of NKTR. 14% in 1 week.
quote:
Originally posted by g-man:
Interesting take, that you think the world is acutally going on the up tick where as i think we're entering a softening cycle.

But yes, my rebuttal is simply a reflection of my belief in a down cycle in response to winetrooper, if you think the global economy still has alot of juice left then, my below analysis wouldnt apply.

But!

The Americas, not just the US has a significant amount of Oil supplies, production may only be the numbers you quoted but that clearly doesnt tell the story when oil prices go up. The supply in north america puts a very heavy downward cap on where the
price of oil can rise.

Alot of this has to do with OPEC + Russia agreeing to cut and Venezuela in a shit hole so they cant sell anything.

We're also starting to see that the North Americans ramping up production to the highest in 10 years, OPEC is starting to break @ the 65$ mark and have increased outputs in Jan. Russia has stated that they're going to start pumping more again too.

Add that to a future potential loss of usage when a larger majority of car manufacturers move towards direct electric engines all point to a limited upside to oil in the long run.

I'd say 75$ is the possibility and 80$ is the stretch. but with WTI @ 65$. 80$ only represents a 23% gain. That's a long holding period / risk for so little gain.


vs. the excellent recommendation of NKTR. 14% in 1 week.


So, I’ll stick to the numbers.

Exxon just projected an increase in demand by 20 million barrels per day until 2040 with stronger gains in early years due to EV replacement in later years.

Many think EV is penetrating now but oil use rises every year (I believe 2008 was the exception). Oil has many uses outside of personal transportation.

In a year or so, Gulf of Mexico production will start to drop off. As well, many legacy wells around the world continue their 4-6% decline per year. Decline never sleeps.

So, I think we’ll see just how much shale will be able to ramp up in 2019-2020 time frame and what price of oil will be needed. The interesting thing about shale is that decline rates can be as high as 70% in the first year. So, it is a bit of a treadmill in terms of adding production.

Finally, we have Saudi on side looking for a higher price to float Aramco. It’s like having the Fed on your side. Also, the spectre of Trump reintroducing sanctions to Iran.

The oil price may not have massive upside but I would argue the equities offer tremendous value here.

As for NKTR (it’s a good pick), I’ll stick will my rec of VLE.TO (PNWRF). It’s up from 42 cents to $5.78 in a few months and this week they will release a resource assessment that will likely be played up by their partner Statoil.

Bfw
you guys are both talking mid-long term projections on oil.

Whereas i'm talking about alternatives to buying stocks if there is a market correction in the immediate short term.

you'll see the price of oil and oil companies are pretty tightly correlated with drops in the market especially with current inventory levels/production levels I gave. so I will restate, it's a very bad buy for so little potential upside in the short term as a hedge against stocks.
quote:
Originally posted by bfw:
quote:
Originally posted by g-man:
you guys are both talking mid-long term projections on oil.

Whereas i'm talking about alternatives to buying stocks if there is a market correction in the immediate short term.

you'll see the price of oil and oil companies are pretty tightly correlated with drops in the market especially with current inventory levels/production levels I gave. so I will restate, it's a very bad buy for so little potential upside in the short term as a hedge against stocks.



A couple thoughts

(1) SPY down about 5% last 5 days. WTI price essentially flat

(2) Total crude inventories in US were up by 56 million barrels in first 3 months last year. The projection for this year is minimal to no build.

So, short term, crude could (and has) definitely outperform the market. What would be really interesting is if at the end of the market correction, some sector rotation occurred and money flowed in to XLE and XOP.

Perhaps Goldman is anticipating this with their recent call for Brent to hit $82.

But, in the interim, if you expect a market correction.....just short the market.

Bfw
There's a decided difference in actually putting more money at risk by shorting the market to rotating money into different sectors though.

It would be interesting to see if money does rotate into oil stocks and oil holdings.

I feel smart money is going to move to cash as the dumb money has suddenly decided to finally enter the market that all the macro guys have been pining for for years.

As with the goldman report.

Well who can forget the https://www.marketwatch.com/st...-of-200-a-barrel-oil
quote:
Originally posted by g-man:
quote:
Originally posted by wine+art:
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Originally posted by irwin:
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Originally posted by wine+art:
I don’t have the energy to jump deep into this thread this morning, but I lost ($37k+) with my oil stocks on Friday.


Yikes.


Dividends.... dividends... dividends... I keep telling myself. Cool


cash is king ;-)



VLE new 52 week high in this horrific tape Smile

Bfw

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