I like Oil

[audreyh1]

Quote:

Originally Posted by Nodak I lived in Mandan ND from 2011 to this past June. About twice a day a train with about 100 oil tanker cars would go through town headed east. I guess we were able to drill our way out of high gas prices.

Actually, the Saudis were tired of ND drilling, so they let the price drop big time to stop it.

[Running_Man]

Quote:

Originally Posted by aaronc879 I just caved and bought back into SDLP at $2.50/sh. It's now about 1.5% of my portfolio.

Wow and in 24 hours it is down 25 percent, this oil market is in a free fall right now, because in looking at the financials of the company it does not appear they are going to go under which is what the stock price is saying, unless there is something that the company is not saying that someone with deep pockets there knows....

[aaronc879]

Quote:

Originally Posted by Running_Man Wow and in 24 hours it is down 25 percent, this oil market is in a free fall right now, because in looking at the financials of the company it does not appear they are going to go under which is what the stock price is saying, unless there is something that the company is not saying that someone with deep pockets there knows....

Everything about the company says that it's worth more than it's share price. There is excessive panic selling going on right now. I expect that it'll come to an end soon then rebound to an accurate valuation which is above what I paid. It may take a while but the trade I made should be profitable, possibly very profitable after a couple years.

[hesperus]

+1
this has all the makings of panic

[DEC-1982]

Quote:

Originally Posted by audreyh1 That's the WTI price you're quoting above, and the one most often used for oil.

Thanks for explaining audreyh1.

[explanade]

So is shale oil production going to decline any time soon?

Seems producers all over the world are trying to maximize production and it's going to take significant drop in supply for the oil price to go back up.

But if it goes back up, a lot of producers will just go back online right?

[aja8888]

Quote:

Originally Posted by explanade So is shale oil production going to decline any time soon?

Production from existing wells is declining on a daily basis. That is the reason new wells come on line (new drills).

However:

We (The U.S. refiners) use ~12 million BPD here of crude oil in making refined products in the U.S. and import roughly 1/3 of that from over 20 nations (based on last time I looked). Canada is the largest exporter to us. The rest (2/3) comes from our wells.

As long as we are importing crude cheaper than we can drill for it, I suspect any new drilling to replace imports or our own current production won't happen. (This is what OPEC would like to see)

[wmc1000]

that is why i am buying Downstream MPC

[petershk]

I'm still thinking that it's a giant game of chicken and the losers will be the ones who run out of money first and the winners will buy them very cheaply. It also seems like the financing piece has to work itself out.

At some point the price of oil caused by the oversupply will do that but so far the cars have remarkably brave at crashing into each other .

As long as there's no big drop in consumption I suspect the price will go to where enough oil is made to satisfy the need and still make a profit. If technology makes oil as userful as whale oil.. that's another story... But I don't think that's happening right now anyway.

Sent from my HTC One_M8 using Early Retirement Forum mobile app

[explanade]

Jamie Dimon said barring a recession, which he doesn't believe is going to happen this year, oil is suppose to end at about $40 by the end of this year.

But he says he's not an oil expert, just something JPM's economists/experts are forecasting.

[aja8888]

Quote:

Originally Posted by explanade Jamie Dimon said barring a recession, which he doesn't believe is going to happen this year, oil is suppose to end at about $40 by the end of this year. But he says he's not an oil expert, just something JPM's economists/experts are forecasting.

Let's see, that is 11 1/2 months from now and oil companies can't forecast out one month. Gotta love those talking heads.

[Running_Man]

The devastation of the BDI index of falling nearly 80% off of a prior 80% decline from the 2008 top shows what deflation can do to an industry, this fall is just as bad as the 2008 fall only no-one is paying any attention to it, but I think it is showing severe drop of economic activity

[OrcasIslandBound]

In early December I bought $11k of VDE, a Vanguard index of oil. It was down 18% the other day so I bought another $11k. Still down overall, but I feel better.

Sent from my Nexus 4 using Early Retirement Forum mobile app

[Brat]

BDI is picking up the drop in natural resource mining.

[audreyh1]

BDI is also reflecting a huge increasing in capacity - a lot of new ships.

You have to look at the supply story, as well as the demand. Just like with oil. There is some demand drop, but far more oversupply, and expectation of more oversupply, driving down the price.

This is 10 months old, and I understand many more freighters have come online since: Why the Baltic Dry Index is at an all-time low http://www.economist.com/blogs/econo...ist-explains-7

[Brat]

My son, a maritime academy graduate, told me several years ago that maritime shipping is cyclical. I think he was implying that it is a trader's stock and not a suitable investment for his father and I.

More new ships, less demand for cargo, BDI will drop until shippers decide that it costs more to sail than set anchor.

Most of those newer ships were constructed with borrowed money, lenders will 'arrest' them should their owners default, put them up for sale at a discount. Shipping companies with cash in their pocket will buy at the right price.

[Mulligan]

Quote:

Originally Posted by Brat My son, a maritime academy graduate, told me several years ago that maritime shipping is cyclical. I think he was implying that it is a trader's stock and not a suitable investment for his father and I. More new ships, less demand for cargo, BDI will drop until shippers decide that it costs more to sail than set anchor. Most of those newer ships were constructed with borrowed money, lenders will 'arrest' them should their owners default, put them up for sale at a discount. Shipping companies with cash in their pocket will buy at the right price.

I agree....If you want a fail safe systematic system that can separate you from your money.... Be a buy and hold investor in shipping companies.


Sent from my iPad using Tapatalk

[Brat]

Woe be to the lender who 'arrests' a ship as they are responsible for costs until the vessel is sold.

[Nemo2]

[petershk]

HP had a nice pop today. I like their management a lot and they have a strong financial position. Granted... Their stock has been pummled last year but I hope 2016-2018 is a good run for them NOV and Exxon.

Sent from my HTC One_M8 using Early Retirement Forum mobile app