Hello Forum members! As many of you may know, OPEC did not cut their production of oil, which was the main reason why the price of oil took a deep dive down. President Putin predicted that oil will rise again in mid 2015. I don't know whether I should buy or short any of the oil company stocks (like Bp, Exxon mobil and Oasis Petroleum). I know that we should "buy when low and sell when high," but this seems pretty long term. Any advice on how to proceed? Thanks in advanced!
My portfolio always contained EXXON! You can never go wrong with Exxon. I heard that Getty was a good bet. Then, I heard that there was some kind of Chinese oil stock that paid Cheniere may be the name of that company.
Yeah go right ahead and buy stocks if oil price stocks are down now. The prices of oil won't keep going down forever. In a few months time we'll start seeing oil prices going up again. Pessimists hold a different view: http://www.cnbc.com/id/102189040 Why? The forecast is that crude oil prices might drop to $50 a barrel next year.
Do not give in , just because it seems to be long term , you might loose a good chance, I would say go ahead and invest.
I see this as an opportunity to buy and buy more of better energy companies that have become bargains, and also as an opportunity to profit off put options on some of the more volatile drillers and servicers. I don't know short term how much lower crude and these stocks will go, but I do know that they will eventually be much higher than they currently are sooner or later.
I'm personally going to wait. BP and Shell have the largest dividends but they are likely to fall much more than Exxon. Of course, they will be much better buys if they do end up getting hit hard in the future.
I would say give it at least a week to settle, then if it has dropped any more than already, buy. In the long term you can't go wrong, so now really is the time to buy stocks like BP, Exxon etc. The fact of the matter is that there is a lot less oil around than when the price was higher, so it can't stay this low indefinitely.
I think that the current drop in oil prices is a big overreaction... give it 2 months and the prices should be getting back to normal. (that being said, I'm usually horrible with predicting time frames ) I'll add a bit of PBT but that was the plan all along even before this drop in price. Might be looking into investing directly into oil (commodity) if the price keeps going down more.
One thing to watch for is high debt levels in the drillers and servicers. Too much debt at too much interest can spell trouble when revenues decrease due to oil prices falling.
Very good point. Do you also see the low price of oil boosting the economy and possibly leading to higher interest rates in the near future? This would be a horrible combination for oil producers who have a lot of debt.
