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Old 11-29-2014, 06:51 AM   #21
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I PREDICT (ahem) that the price WILL go up again. But I have no idea when. Meantime, back to the pipeline dividends.
Really going out there on a limb, aren't you Gypsy Ed?

This is pretty treacherous ground, unforgiving to those making the wrong choices. One thing we know for sure is petroleum is a critical component and driver of global economic growth. A price decline this big, if sustained, should be an important and unexpected tailwind for some of those moribund and anemic developed economies such as EU and Japan. An increase will do the opposite. Which will it be?
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Old 11-29-2014, 07:16 AM   #22
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I am in no way smart enough to know what oil prices are going but I would caution against recency bias on oil prices as it seems like some really serious things are happening in the oil biz that could mark a discontinuity in how that industry works.

I read yesterday that shale oil and gas reserves in the US are now estimated at the equivalent of 2000 BILLION barrels. The US currently consumes 12 Billion barrels per year. So the reserves are the current equivalent of the U.S. able to care for itself for 166 years...and energy consumption in the states is now growing only about 1% per year as the economy becomes much more energy efficient. The U.S. is now the largest exporter of hydrocarbons in the world and sudden availability of cheap energy is starting to overwhelm the cost of labor in calculations of where to put large manufacturing, etc. European companies are looking to build large, energy intensive manufacturing in the states due to its availability of cheap energy. Petro-states worldwide are licking their wounds and looking panic'd. We're talking about some of the world's worst countries becoming insolvent. OPECs decision not to cut production volumes was an attempt to tactically drive the oil price down to shut off some shale wells.

I'll bet on the productivity and innovation genius of western shale and oil sands people over the govt run, fat oil oligopoly any day. Combine innovation with political stability and energy could become a very regional business again with North America being pretty self-sufficient and the rest of the world (China, India, Japan...) dealing with the Middle East.

Imagine what happens if Europe loosens its views on oil and gas extraction -- an not unlikely outcome as Russia continues to threaten cutting off gas to Eastern Europe.

Regardless, huge things are afoot here both for oil and society including possibly a global move from "impending energy scarcity" to "energy abundance." Oil price volatility is likely guaranteed, but who knows which way it will go and when?

Time to curl up for a nap with my boring index funds
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Old 11-29-2014, 08:27 AM   #23
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Krotoole, what is the source of the article you are quoting ?
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Old 11-29-2014, 09:39 AM   #24
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Krotoole, what is the source of the article you are quoting ?
Five numbers reveal our energy future: Column
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Old 11-29-2014, 09:45 AM   #25
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Krotoole, what is the source of the article you are quoting ?
Here's another...

http://www.ft.com/intl/cms/s/0/c441e...#axzz3KTcX3Fyd

Some data came from a 3rd article...if I can find it I'll send it along
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Old 11-29-2014, 09:47 AM   #26
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Great summary article. Thanks.
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Old 11-29-2014, 09:55 AM   #27
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Anyone who is really interested in this stuff, I'd recommend:

RealClearEnergy
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Old 11-29-2014, 10:00 AM   #28
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Don't know much about anything about oil, but here are my two cents anyway. As the price falls high cost producers will have obviously have to close, but the technology that enables that production will not be going away, indeed will become more efficient. Seems to me that this overhanging supply would put a cap on too much of a rise in prices. And that prices lower than the peaks of the past few years may be here to stay for quite a while.
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Old 11-29-2014, 10:12 AM   #29
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Here is a cautionary tale in good fun: It's official: The Oil Boom Is Over

In which Ziggy saved us from high oil prices
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Old 11-29-2014, 10:35 AM   #30
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Here is a cautionary tale in good fun: It's official: The Oil Boom Is Over

In which Ziggy saved us from high oil prices
Just keep Ziggy out of this thread at all costs...we don't need a repeat performance!
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Old 11-29-2014, 02:28 PM   #31
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Don't know much about anything about oil, but here are my two cents anyway. As the price falls high cost producers will have obviously have to close, but the technology that enables that production will not be going away, indeed will become more efficient. Seems to me that this overhanging supply would put a cap on too much of a rise in prices. And that prices lower than the peaks of the past few years may be here to stay for quite a while.
I agree. OPEC is still over producing by nearly a million barrels per day based on their 30 million bpd ceiling. Before Saudi will agree to a production cut, that over production will need to come down. US production growth will start to taper later in 2015, Canada perhaps even earlier.
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Old 11-29-2014, 03:43 PM   #32
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DCA'ing BBEP and some BP. I like BBEP I'm following it down, down, down...
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Old 11-29-2014, 06:11 PM   #33
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DCA'ing BBEP and some BP. I like BBEP I'm following it down, down, down...
LNCO for me. Big dividend cut is likely, but bear markets don't last forever.
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Old 11-29-2014, 07:33 PM   #34
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DCA'ing BBEP and some BP. I like BBEP I'm following it down, down, down...

Cost of exploration for the Big Integrated Oils getting expensive to increase output. I read in a few articles recently that it would be cheaper for Exxon just to buy BP and their reserves than it would to find that amount of oil. But I doubt if they were figuring in the still potential overhang of the remaining lawsuits costs from gulf in that calculation.


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Old 11-29-2014, 08:58 PM   #35
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Really going out there on a limb, aren't you Gypsy Ed?

This is pretty treacherous ground, unforgiving to those making the wrong choices. One thing we know for sure is petroleum is a critical component and driver of global economic growth. A price decline this big, if sustained, should be an important and unexpected tailwind for some of those moribund and anemic developed economies such as EU and Japan. An increase will do the opposite. Which will it be?
I think it will be beneficial overall, but not for everyone. My O&G prices are being hurt, but I am not selling and the dividends are still there. I am expecting the dividends will ride out the next few (emphasis on FEW) years pretty well.
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Old 11-29-2014, 09:07 PM   #36
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DCA'ing BBEP and some BP. I like BBEP I'm following it down, down, down...
I decided to sell my BP stock a few years ago and I will not buy it again. Actually, I am not anticipating buying any individual stock again.

If I were still looking at individual stocks these days, I would be looking to buy Chevron first or Exxon second on weakness, but I am sticking with Vanguard's energy ETF for now.
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Old 11-30-2014, 06:33 AM   #37
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My energy plays are simple...VGENX in a Roth and BHP for some global exposure in energy and hard assets.
I had some shares in PetroHawk, a US natural gas enterprise. When BHP acquired PetroHawk, I accepted the tender offer and kept slowly adding to BHP "when the price was right".
I just scored 40 shares at a pretty good price. That will help average out my unrealized losses on previous purchases.
Holding for the long term, loving the dividends.
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Old 11-30-2014, 08:49 AM   #38
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I think prices will stay down for a while - at least a couple of years and that will make a big difference. It will take a while for the "glut" to clear. I never understood why oil prices were so high earlier this year while US was ramping oil production so quickly.

An additional hopeful benefit - this is very hard on Russia, and means they suddenly don't have the resources to fund operations like the Ukraine business. So we can hope it keeps them quiet for a while too.
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Old 11-30-2014, 09:05 AM   #39
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An additional hopeful benefit - this is very hard on Russia, and means they suddenly don't have the resources to fund operations like the Ukraine business. So we can hope it keeps them quiet for a while too.
My concern is the opposite.

If the economy becomes really rough for the average Russian citizen they may lose their admiration for Czar Putin and turn against him. That could result in him creating an external threat in an attempt to rally the population to defend the motherland - and deflect the frustrations away from him.
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Old 11-30-2014, 09:07 AM   #40
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DCA'ing BBEP and some BP. I like BBEP I'm following it down, down, down...
BP, COP, and KMI - will add to all three if they continue to drop.
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