Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 11-18-2015, 03:26 PM   #541
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2008
Posts: 7,422
Maybe the military operations they're doing in Yemen is getting expensive. Heard they were buying a lot of missiles from US.

Or maybe they fear ISIL will overthrow them.
explanade is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-02-2015, 09:50 AM   #542
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 889
I figured I would add this since it backs up my conspiracy theory on the oil price decline... Just saw this article:

GERMAN INTEL SEES RISK IN SAUDI PRINCE'S THIRST FOR POWER

News from The Associated Press

From the article:

"BERLIN (AP) -- Germany's foreign intelligence agency believes Saudi Arabia's ambitious defense minister could endanger the Gulf kingdom's ties with regional allies by attempting to cement his place in the royal succession, according to a memo released Wednesday."

"It is unusual for the BND spy agency to publicly release such a blunt assessment on a country that is considered an ally of the West. Germany has long-standing political and economic ties with Saudi Arabia."

...

"In addition to his role as deputy crown prince and defense minister, Mohammed bin Salman also oversees the country's top economic council and Saudi oil policy."

...

"Washington-based think tank The Brookings Institution published an essay in September that said the prince's "unbridled ambition has alienated many of his fellow princes," adding that "he has a reputation for arrogance and ruthlessness.""
ESRwannabe is offline   Reply With Quote
Old 12-02-2015, 10:06 AM   #543
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 9,343
If what I am parroting from reading is true, oil could be in trouble from more than Saudi's oil dump long term. Suncor can extract tar oil for under $30 a barrel now and there is over a hundred years supply of that stuff. Plus China has found big shale oil supplies and are starting to use US technology to extract it at economical prices. US producers are also lowering extraction costs quickly in a very short period of time. Who knows, but supply doesn't appear to be a near term problem. And I assume Libya and Iran still aren't getting much out to market like they were back in the day.


Sent from my iPad using Tapatalk
Mulligan is offline   Reply With Quote
Old 12-02-2015, 10:13 AM   #544
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 889
Quote:
Originally Posted by Mulligan View Post
If what I am parroting from reading is true, oil could be in trouble from more than Saudi's oil dump long term. Suncor can extract tar oil for under $30 a barrel now and there is over a hundred years supply of that stuff. Plus China has found big shale oil supplies and are starting to use US technology to extract it at economical prices. US producers are also lowering extraction costs quickly in a very short period of time. Who knows, but supply doesn't appear to be a near term problem. And I assume Libya and Iran still aren't getting much out to market like they were back in the day.


Sent from my iPad using Tapatalk

Could be. My expectation is that the technology will keep improving, making extracting oil more cost efficient and adding more supply. My only bet so far is on the midstream sector which is used to transport the oil around in the US where its needed.

So far lower oil price has resulted in more demand, which in turn means more demand for midstream. Right now midstream is being correlated to oil price, but I imagine that will fade over time. Historically midstream has not been so 1 to 1 correlated with oil.

I've been thinking about buying into the downstream (marathon petroleum) as low oil price is great for them.
ESRwannabe is offline   Reply With Quote
Old 12-02-2015, 10:31 AM   #545
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
Quote:
Originally Posted by ESRwannabe View Post
Could be. My expectation is that the technology will keep improving, making extracting oil more cost efficient and adding more supply. My only bet so far is on the midstream sector which is used to transport the oil around in the US where its needed.

So far lower oil price has resulted in more demand, which in turn means more demand for midstream. Right now midstream is being correlated to oil price, but I imagine that will fade over time. Historically midstream has not been so 1 to 1 correlated with oil.

I've been thinking about buying into the downstream (marathon petroleum) as low oil price is great for them.
I think I would wait until crude futures are in the low $30's before I would invest in any energy-related stocks. That would also be at or after the time many mid-tier, highly leveraged producers are bankrupt or have sold off their assets. I am talking U.S. companies here only.

The best bets at that time may be the large integrated companies (ExxonMobil, Chevron. etc).

The top midstream companies will be sufficiently beat up by then and will have been forced to lower fees for pipeline deliveries. The best of the breed are Enterprise, Magellan Midstream, etc.
__________________
*********Go Astros!*********
aja8888 is offline   Reply With Quote
Old 12-02-2015, 11:41 PM   #546
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 889
Read another good article today about the oil crisis.

Oil speculators risk 'short squeeze' if impulsive Saudi Prince throws OPEC surprise - Telegraph

"Hedge funds have taken their bets. The market is convinced that Saudi Arabia will ignore the revolt within OPEC at a potentially explosive meeting on Friday, continuing to flood the global markets with excess oil."

...

"They are at the mercy of opaque palace politics in Riyadh that few understand. Helima Croft, a former analyst for the US Central Intelligence Agency and now at RBC Capital Markets, says the only man who now matters is the deputy crown prince, Mohammed bin Salman."

'The headstrong 30-year-old has amassed all the power as minister of defence, chairman of Aramco and head of the Kingdom's top economic council, much to the annoyance of the old guard. "He is running everything and it comes down to whether he thinks Saudi Arabia can take the pain for another year," she said."
ESRwannabe is offline   Reply With Quote
Old 12-03-2015, 08:23 AM   #547
Full time employment: Posting here.
hesperus's Avatar
 
Join Date: Aug 2013
Location: https://www.google.com
Posts: 750
Send a message via ICQ to hesperus Send a message via AIM to hesperus Send a message via Yahoo to hesperus
Quote:
Originally Posted by aja8888 View Post
The best of the breed are Enterprise, Magellan Midstream, etc.
Agreed, and I might add Spectra (SEP) to that list for gas. My MLP holdings are almost entirely comprised of these three. I've whittled down/eliminated a couple of other ones in the past couple of years like BWP, and some PAA.
hesperus is offline   Reply With Quote
Old 12-03-2015, 01:35 PM   #548
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 889
My guess is the OPEC meeting tomorrow doesn't change anything and output levels stay as is another year.

I expect oil to keep going down in 2016. Maybe even getting to $20 like Goldman Sachs predicted.

Maybe in 2017 it will start going back up again. It'll go up eventually as oil reliant countries slip into chaos (your already seeing it with venezuela, brazil, iraq, etc). I believe around $1.5 trillion in oil capex has been canceled already. When the correction comes it could be very violent... I've read predictions that it could get up to $200 if the correction is violent enough.

Maybe that would be the impetus needed by the next president to want energy independence, which we could have, provided we don't let other countries essential engage in "dumping".

Shale was one of the bright spots of the economy providing jobs.
ESRwannabe is offline   Reply With Quote
Old 12-03-2015, 01:46 PM   #549
Full time employment: Posting here.
 
Join Date: Jul 2013
Posts: 953
Perhaps the guvment needs to increase the depletion allowance? We need to do something to help out the suffering oil companies.

I get the feeling that the technology of oil production (and to a lesser extent, energy production in general) has changed the economic model that OPEC used to manage prices and production. There are enough additional independent (from OPEC) producers that can start producing when oil prices go up. Low oil prices may shut them down and hurt them financially. But when oil prices go back up, with some time lag, they can start producing again. Additional sources of oil and other energy tends to loosen the grip that OPEC has had in the past.
Clone is offline   Reply With Quote
Old 12-03-2015, 03:28 PM   #550
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,171
Sheesh! If oil gets any lower, I will have to turn off the electric motor system in my hybrid. Otherwise I will never break even.

By the way, what ever happened to those folks screaming that the oil companies can charge us whatever they want because we have to pay it?
__________________
Comparison is the thief of joy

The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
I used to like oil
Old 12-03-2015, 04:45 PM   #551
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
I used to like oil

but I don't anymore.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 12-04-2015, 06:51 AM   #552
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,650
I dropped my shares on Total a few days go. Reasonable profit made, nothing spectacular.

In my individual portfolio there is no more oil to be found now, and not planning on every owning it again. Don't trust the longterm (10 - 20 years) dynamics.
Totoro is offline   Reply With Quote
Old 12-04-2015, 11:45 AM   #553
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 889
From what I understand OPEC has decided to raise output... lol

Hopefully we will see some big bankruptcies going on during the election. I guess as long as its bad for Russia the US is cool with it.
ESRwannabe is offline   Reply With Quote
Old 12-04-2015, 12:01 PM   #554
Full time employment: Posting here.
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 633
If you look at the price to forward-earnings (next 12 months) ratio, energy sector ETF is the highest (32.4) compared to the next highest consumer staples ETF (20.1). It's got plenty of scope to go down further. I know energy does not equate to oil, but still ...

Yahoo!
DEC-1982 is offline   Reply With Quote
Old 12-07-2015, 10:09 AM   #555
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 889
Good lord. What happened today? Everything in oil is down huge.

AMLP is down 8%...

I actually spent the weekend listening to the Q-1 conf calls for more constituents in the AMLP index this weekend and everything is fine. The companies are profitable, they are growing, and the dividends are covered by cash flow.

Jesus, even MPC, a downstream company which benefits from cheap oil is down 4%. What kind of logic is that?
ESRwannabe is offline   Reply With Quote
Old 12-07-2015, 10:18 AM   #556
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
Quote:
Originally Posted by ESRwannabe View Post
Good lord. What happened today? Everything in oil is down huge.

AMLP is down 8%...

I actually spent the weekend listening to the Q-1 conf calls for more constituents in the AMLP index this weekend and everything is fine. The companies are profitable, they are growing, and the dividends are covered by cash flow.

Jesus, even MPC, a downstream company which benefits from cheap oil is down 4%. What kind of logic is that?
The whole market is down, and oil is not in favor.

Plus, fund mangers are pushing equities down so they can buy them back cheaper to make a profit this quarter and set themselves up for next year (this is all speculation by me)
__________________
*********Go Astros!*********
aja8888 is offline   Reply With Quote
Old 12-07-2015, 12:37 PM   #557
Dryer sheet wannabe
 
Join Date: Jan 2015
Posts: 24
Still have my crazy limit order in for 500 shares of XOM @ $55.09...during the last mini crash it got within $10, maybe a little more panic will get it there? 😏


Sent from my iPhone using Early Retirement Forum
valueplayer is offline   Reply With Quote
Old 12-07-2015, 12:52 PM   #558
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 9,343
Quote:
Originally Posted by valueplayer View Post
Still have my crazy limit order in for 500 shares of XOM @ $55.09...during the last mini crash it got within $10, maybe a little more panic will get it there? [emoji57]


Sent from my iPhone using Early Retirement Forum

My trouble is every time something hits an entry point for me, I immediately lower my entry point..I remember a few weeks ago if KMI-A get to $40 I will buy some... Now under $34 and I am still watching...Maybe at $30 now.


Sent from my iPad using Tapatalk
Mulligan is offline   Reply With Quote
Old 12-07-2015, 02:57 PM   #559
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 440
I suspect the highly leveraged nature of lots of the production forces pump at any price. Logic isn't really driving the train I think . But then... People buying a car for the next 3-7 years because of today's gas price doesn't make sense either.

I've learned the hard way to avoid heavily leveraged companies as the ones with less debt tend to survive longer in a protracted downturn.

Sent from my HTC One_M8 using Early Retirement Forum mobile app
petershk is offline   Reply With Quote
Old 12-07-2015, 03:44 PM   #560
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,645
Quote:
Originally Posted by petershk View Post
I suspect the highly leveraged nature of lots of the production forces pump at any price.
Not really, many operators have shut high cost wells in. And high cost wells are typically those with low production volumes. U.S, production is pretty steady and has dropped about 100,000 bpd in the last few months. we still need to import about 3 million bpd to meet internal demand on a steady state basis.

What's going on in the U.S. is the curtailment of drilling new wells since that is a high cost event.
__________________
*********Go Astros!*********
aja8888 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 10:54 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.