Oillllllll

Discussion in 'Stock Market Forum' started by hawksfan9325, Jan 9, 2016.

  1. hawksfan9325

    hawksfan9325 Active Member

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    Hey crew. Where do you see oil in next 12-18 months? Bought some CVX on weakness. They pay an attractive dividend and seem "best of breed". Was gonna leverage that position with some far dated option spreads too. Anyone a bull on oil? Can it really head to $20? My god!
     
  2. baudwalk

    baudwalk Senior Investor

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    Not that I completely trust Motley Fool opinions, but there is a suggestion that CVX dividends could be reduced in 2016 . Tight stops? As a play in oil I am holding some SFL that include, in their fleet, some tankers used to store oil in lieu of full tanks on land. Good luck to both of us.
     
  3. Rainman

    Rainman Senior Investor

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    Eventually oil prices will go up. It might take a while, maybe even longer than 2 years but if you are patient and willing to wait that long then I'm sure that you certainly will make some money when oil rebounds. There are some energy stocks which can still make you money even if oil prices keep falling — HFC/ HollyFrontier.
     
  4. Onionman

    Onionman Senior Investor

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    It's so very macro and geopolitical at the moment - probably more than it has been for a while. As ever, we've got to keep an eye on China and the data coming out (whether your believe the numbers or not) and see what happens with Saudi Arabia. If I was a betting man I would expect to be higher than where we are now but not after a bit more weakness first.
     
  5. hawksfan9325

    hawksfan9325 Active Member

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    All valid points guys. T Boone Pickens, sort of the maverick of oil said, had the North Koreans tested their H Bomb 10 years ago, oil would have rallied 10% on that news. When it happened this week, it barely even blinked an eye. There is a supply glut, and demand destruction, as well as geopolitical issues. Perhaps oil is now fair valued, and the United States is almost energy independent. I still like oil going forward, with short term weakness factored in.
     
  6. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I was very heavy into oil drillers and also servicers, transporters, and refiners to a lesser degree through much of 2014. I took profits on almost all of my investments in almost all of those companies in Oct 2014. I've been dollar cost averaging lightly back into a handful of them over the last year, but most of them have kept on falling.

    If you're a more conservative investor, you're generally better off sticking to the big integrated names like Chevron and Exxon. One E&P company that I have owned at least a little of for years that has held up well is FANG.
     
  7. crimsonghost747

    crimsonghost747 Senior Investor

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    Oil will certainly go back up at some point. I don't see demand going up anytime soon, rather probably slowly declining but the production will fall significantly at some point with these cuts into spending by western companies. The fact that the Saudi's need the price to be higher also supports my claim that the prices will be higher sometime in the near future. I'm horrible at predicting when so I'll forget about that. I've already done my own oil related purchases, though I must admit that I did them a bit too early.
     
  8. petesede

    petesede Guest

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    I was saying this a year ago. The days of $80 oil are over.

    The Saudis cannot move oil on their own, and the lower oil goes, the more they have to pump just to keep their income the same. They are being forced to contribute to the problem of over-supply as much as Russia and Venezuela. Also there is some wisdom going around that the Saudis are going to try to keep oil tanked for at least another year to hurt Iran. Iran is just starting to come online, and this is absolutely crushing their first contracts.

    With all the problems with the China economy and their factory orders falling so much the last 6 months, there is just no demand anywhere and you have all these countries acting in their own self-interest.

    it is funny listening to people who were saying last year that oil would be at $150 this year, now talking about ´oh.. I sold last year and made a small fortune´..

    We are not going to see $100 again, and probably not even $80. Just too many big producing countries that are in economic chaos for them to even consider cutting production. We tested hitting the $20s day.. that will have a huge psychological effect.

    And here is the thing that the knuckle-draggers ignore. Globate climate change initiatives are a real thing. Countries in Europe and China are spending a ton of money to get away from oil. While the USA has mostly become energy independant, most other places are not. We are probably at least 3 years away from the world economy improvign enough to where demand for oil will be an issue again, and in that time, we are going to have a ton of really smart people with a ton of money trying to find ways to make it almost obsolete. While the low price of oil is probably almost completely geopolitical supply and demand. There also is the factor of the world uniting this past year against fossil fuels.

    I don´t think oil hits 50 this year because china is falling apart.
     
  9. jennyrebekka

    jennyrebekka New Member

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    Hey all, new to here, not to trading. But this chat pulled me in... Oil crossed $30 earlier. Note the quick bounce back above. Some big money bought there. USO flirting with $9 today too. I grabbed some USO calls down there... Crazy action, wooo ;)
     
  10. crimsonghost747

    crimsonghost747 Senior Investor

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    I do agree with most of what you just said.
    But the Saudi's CANNOT balance their budget with more production. It's impossible... just never going to happen as the deficit right now is too big for that. So they need the price to go up. That is a fact. Whether or not they want it to go up now, or in a year, or if they have enough power to actually make it go up, those things are up for debate. But they do need it to go up, one way or another.

    Saudi's need the price to go up and I don't think there is a single oil company that is making profit on their drilling business in the western world. Sure the oil being pumped out in middle east and certain parts of Africa are still profitable for these companies but how long will they keep pumping it out in the west if it's not profitable? That is A LOT of supply going away, though of course this will take a lot of time to happen.

    I don't see oil at $100 either. Maybe not even at $80. But somewhere around $70 would be a price where the western drilling would be able to continue in most places and the Saudis would get their budget deficit fixed.
     

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