Anyone Thinking of Investing in Oil?

"We are not going to change our minds because the prices went to $60 or to $40," Suhail Al-Mazrouei, the United Arab Emirates' oil minister said at the conference, according to Bloomberg. "We're not targeting a price; the market will stabilize itself."


This might have to do with it, they are taking control back of the market before big movements to renewable energy come into play would be my guess. The big companies that are huge in oil right now will also start quietly diversifying and buying smaller startup ( but big scale opportunities ) so they are not left out in the cold when/if oil is no longer the thing that heats homes, drives cars, etc.
 


In Canada we are seeing 10K barrels a day producers with valuations under $250 million whereas before this started they were close to 1 billion.

Netbacks at $85 oil were roughly $30 so IN THEORY at $55 they are losing money.

BUT BUT the latest scoop out of Calgary is a lot of these guys are saying to the analyst no fuck you we can go as low as $40 and have positive cashflow with waterflooding and new hyper fracking techniques.

So nobody - and I mean nobody - knows how to value the shale guys right now. You have to wait until the quarterlies come out and that's when truth makes an occasional appearance.

But this $70 a barrel break-even cost for shale, that number was floated around when a rig-pig (non-skilled labour) could show up on-site and pull down $85k a year. That's not the case anymore.

Labour costs in Bakken and Alberta dropping pretty fast let me tell you.

I'm in big on a Canadian micro-cap. We'll see if I lose my shirt or not. But not matter what happens, glad I wasn't born Russian.
 
As far as investing goes, we haven't seen capitulation/hopelessness yet. After much pain and disgust, a bottom will form and that's when I hope to buy some super-majors - XOM, COP, CVX, BP, RDS

There are some good values in the oil patch but I have no confidence in my ability to pick and choose between which ones will survive the downturn and which ones won't. I think I'll just buy some of the E&P ETFs
 
Hurr-Durr said:
As far as investing goes, we haven't seen capitulation/hopelessness yet.
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Ya, or, a bottom will form from some EVENT that happens like it usually does having nothing to do with capitulation/hopelessness.

Hurr-Durr said:
After much pain and disgust, a bottom will form and that's when I hope to buy some super-majors - XOM, COP, CVX, BP, RDS
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Good luck catching a bottom these days. It will be up 50% before you can even log into your brokerage account.
 
Look at the Historical prices I posted above, why would anyone believe it should be anything higher than, say, $40?

While I do not expect $0.72 gallon like in the late 80's. I do expect to see $1.45 again.

Knife catchers.
 
REIMktg said:
Look at the Historical prices I posted above, why would anyone believe it should be anything higher than, say, $40?

While I do not expect $0.72 gallon like in the late 80's. I do expect to see $1.45 again.

Knife catchers.
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lol ok, so you shorted at $107? I'd love to see your fill. You will never see $1.45 at the pump.

Basically, nobody knows shit. PIMCO held >20% in Ruble debt when their charter stated no more than 10%. They sold Crude variance when CL was $100 and lost nine figures. Real-time tanker data runs five figures monthly. Do any of you have that data? Do you know more than PIMCO?

It's macro and self-sustaining. Russia imploded on a 30% move in CL. They are a third-world resource-economy. China's economy is less than a year from entering recession. We're awash in the stuff and demand is down. The Saudis see Obama as weak and want to quash shale. What do you do when you want to kill a competitor? You flood the market when prices are weak.
 
Benji49 said:
But not matter what happens, glad I wasn't born Russian.
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I'm thinking of a finger between thumb / index and ring / baby.


Benji49 said:
So nobody - and I mean nobody - knows how to value the shale guys right now. You have to wait until the quarterlies come out and that's when truth makes an occasional appearance.

But this $70 a barrel break-even cost for shale, that number was floated around when a rig-pig (non-skilled labour) could show up on-site and pull down $85k a year. That's not the case anymore.
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Shale pawn was sacrificed to put pressure on Russia.
 
Rusky said:
Shale pawn was sacrificed to put pressure on Russia.
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Sure but the folks who really want to put it to Russia are ALSO quite anti-fraking, so a win-win and not a sacrifice per se.

The big question is how this shakes down in the mid-term, like 12-18 months. Russia is a tough girl, or used to be, and them Ruskies know how to wait an enemy out over the winter. THen again, none of us are so manly as we used to be.

I took advantage of the upslope to dump oil holdings. I expect the calm to last a couple of days and if things are still quiet on Friday, it may be a good time to short some shit before the weekend. I think we'll be back to the panic by next week.

This is a long game and it will end poorly for the everybody stateside.

These are crazy times but character is revealed in tough times. Be ready
 
ANOMOANON said:
I bought 500 shares of NKA today, they are sitting on a lot of cash with a book value of $6+

I think its a good buy, well will see what happens ...
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Just took a peak at their balance sheet - where do you see a lot of cash? Their total debt/equity (highly leveraged) is terrifying and their net income has significantly decreased by 267% from last year and they are bleeding money.

If you are looking to bottom fish with other risky plays within the small energy players, take a look at MHR (Magnum Hunter Resources)

Everything energy related took a nice pop today.. but I'd be extremely careful with these small players... the longer oil stays at these prices the more of these high-leveraged companies are going to be out of the game. You can always hope for a nice acquisition price but you likely have better odds at the local casino.
 
Just buy deep ITM calls on the integrated oils. S&P will rally to 2025 over the next week and I'd expect to see Feb CL at $60/bbl and XOM touch $91.80.
 
poopie said:
lol ok, so you shorted at $107? I'd love to see your fill. You will never see $1.45 at the pump.
.
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I have nothing invested nor did I imply I did.

Oh wait, **bluster**bluster** let me publish my brokerage statements, my tax returns, my "fill" proof........... whatever.

Just paid $2.58 at the Pump in Brea, CA. Getting closer to my $1.45 all of the time.
 
REIMktg said:
I have nothing invested nor did I imply I did.

Oh wait, **bluster**bluster** let me publish my brokerage statements, my tax returns, my "fill" proof........... whatever.

Just paid $2.58 at the Pump in Brea, CA. Getting closer to my $1.45 all of the time.
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No shit?

Opinions... but where were you when the shit was >$100? So you come out with BS nominal oil charts after it's dropped 50%.

So what's the time-line on $1.45 pump unleaded? That pump price equates to $32 on front-month CL futures. Not going to happen.
 
poopie said:
No shit?

Opinions... but where were you when the shit was >$100? So you come out with BS nominal oil charts after it's dropped 50%.

So what's the time-line on $1.45 pump unleaded? That pump price equates to $32 on front-month CL futures. Not going to happen.
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In July 2011 I wrote - "Though it will fall in due time. It will come crashing down.

Just invest a little in deep out of the money put leaps on gold/oil - just throw away money that you will not miss, and one day when it crashes you will be rich."

http://www.wickedfire.com/1376016-post60.html - that was July 2011
 
REIMktg said:
In July 2011 I wrote - "Though it will fall in due time. It will come crashing down.

Just invest a little in deep out of the money put leaps on gold/oil - just throw away money that you will not miss, and one day when it crashes you will be rich."

http://www.wickedfire.com/1376016-post60.html - that was July 2011
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So how much did you make on that advice? And is the same advise still valid on calls now that it's near the bottom?
 
REIMktg said:
In July 2011 I wrote - "Though it will fall in due time. It will come crashing down.

Just invest a little in deep out of the money put leaps on gold/oil - just throw away money that you will not miss, and one day when it crashes you will be rich."

http://www.wickedfire.com/1376016-post60.html - that was July 2011
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I have to give my broker a strike and a duration on those puts. They won't sell me a perpetual.

Your CL short call was at 90.32. It traded to 110 within 6 months of your call and then went nowhere for 3 1/2 years.
 
poopie said:
I have to give my broker a strike and a duration on those puts. They won't sell me a perpetual.

Your CL short call was at 90.32. It traded to 110 within 6 months of your call and then went nowhere for 3 1/2 years.
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alright poop, since marty (are you marty?)went away, you're our resident broker. so what's the play with this oil? I wanna gamble a little.
 
It'll be interesting to see how this plays out. In the long run a substantial portion of OPEC won't be able to continue to fund their social programs with oil this low. We'll have to see who lasts longer at a lower cost per barrel: The frackers and their higher costs or the OPEC countries and their social programs that are being funded by high crude prices.
 
cardine said:
It'll be interesting to see how this plays out. In the long run a substantial portion of OPEC won't be able to continue to fund their social programs with oil this low. We'll have to see who lasts longer at a lower cost per barrel: The frackers and their higher costs or the OPEC countries and their social programs that are being funded by high crude prices.
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there is going to be a metric fuck load of money made from this. Dont worry about OPEC. They are not going to completely expose themselves with a war they created. They are making money no matter what the price is. Up, down, or sideways. It doesn't matter when you're playing by your own rules.
 
dmnEPC said:
alright poop, since marty (are you marty?)went away, you're our resident broker. so what's the play with this oil? I wanna gamble a little.
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I'm not a broker.

Buy calls on XOM in the morning if it doesn't gap more than $0.30 higher. Jan 80s. Hold a portion to 91.70 spot. Hold remainder for 92.50. My guess is that XOM may gap a bit higher, tho.
 
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