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Old 02-21-2016, 02:27 PM   #861
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Probably nothing new to you folks in this reuters report:
Saudi oil minister to face rival U.S. producers as price rout bites | Reuters

but I found the numbers of bankruptcies, rig count, and comments from pissed-off people interesting.
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Old 02-22-2016, 12:23 PM   #862
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So has David Tepper. He also bought AMLP and a few other MLPs.

Buffett And Tepper Buy Stakes In Kinder Morgan - Kinder Morgan, Inc. (NYSE:KMI) | Seeking Alpha

Tepper makes big bets in Kinder Morgan, Energy Transfer, Williams Partners

AMLP going up pretty fast this week. I think the announcement by SA and Russia may have set a floor on MLPs if not oil...

Now my problem might change into one of getting as many shares as possible while its still low... I have 19,280 shares right now.


Congratulations - you're doing well in AMLP.

I initiated a small position in the low 9's recently ( just 200 shares ) so hope it will recover to the teens as the O&G picture brightens a little.

Perhaps OPEC has felt enough pain to really want to do something, despite the mutual distrust and suspicion.
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Old 02-22-2016, 12:48 PM   #863
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Thanks Coolius,

I have 19,880 shares of AMLP at an avg cost per share of $13.83.

I didn't time the bottom very well but historically for the fund my share price is very good.

I'll probably keep adding as long as I can reduce my avg cost. My guess is that will last maybe all of 2016.

IEA data shows almost no overproduction by 2017 and large deficits the years after that.

I'm looking forward to buying something else. It's getting boring, but I'm gonna keep getting while the getting is good as long as it lasts.


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Old 02-22-2016, 12:52 PM   #864
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Once I'm done with AMLP maybe I'll add some preferreds (probably PFF etf). Also considering REM etf for mortgage reits.


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Old 02-23-2016, 06:13 PM   #865
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The direction today didn't help AMLP....

I bought ERX at the close. We are going to ping pong around for quite a while.

AMLP ... I like your thesis. It's just gonna take a lot of patience - a couple years - even to get to your break-even let alone some real gains.

Do you have a target price to sell ?
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Old 02-23-2016, 11:33 PM   #866
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The direction today didn't help AMLP....

I bought ERX at the close. We are going to ping pong around for quite a while.

AMLP ... I like your thesis. It's just gonna take a lot of patience - a couple years - even to get to your break-even let alone some real gains.

Do you have a target price to sell ?

I'm confident that I'll have capital gains eventually, my guess is within the next 5 years. Not that it matters all that much as I'm not selling. I'm going to keep it for the dividend income for the rest of my life. It will be a core part of my investment income.

My guess is that oil will be priced around $60-$70 sometime in 2017. Once that happens I'll probably have a capital gain. The yearly dividend growth rate will probably get back to 6% or so by then as well.

My goal is to ESR (i.e. switch to part-time work until 60 or so) in 5 years at age 45. My living expenses are around $28k. I'd like to have investment income of $30k+. Right now I get roughly $24k from AMLP. So I'm confident I'll hit $30k, but I need to diversify my income as much as possible the next five years. Age 45 is a good target as I'll have 20 years vested in a gov pension by then, which I'll be able to start collecting on at 60. With the pension and social security I will be set 60+ (not mention I have money in 401k and Roth IRA). Just need to fill the gap from 45 to 60. My guess is I'll be able to make at least $20k pretty easily working part-time in IT. The other $8k of living expenses will come from investment income.
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Old 02-24-2016, 09:40 AM   #867
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Given the impact that this worldwide pumping is having on the price of oil, effecting global markets and hurting US shale companies, I don't see why the US should not declare a moratorium on purchasing any foreign oil. Seems to me that would cause further woes for the Saudis who seem to be waging an oil war on the US. Thoughts?
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Old 02-24-2016, 09:58 AM   #868
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Given the impact that this worldwide pumping is having on the price of oil, effecting global markets and hurting US shale companies, I don't see why the US should not declare a moratorium on purchasing any foreign oil. Seems to me that would cause further woes for the Saudis who seem to be waging an oil war on the US. Thoughts?

Well not to get political but I think the current administration doesn't like the oil industry. So probably a non-starter.

It doesn't really matter anymore anyway. The surplus will be all but gone by 2017. There has been a tremendous amount of capex canceled. So we will probably have huge supply deficits starting in 2018.

There's also a very real possibility of various oil exporting countries imploding. I wouldn't be surprised if Iraq were to become a failed state soon. In Syria we could see Russia and Iran, in a direct war with Turkey and Saudi Arabia. The market price for oil is not factoring in any supply shocks.
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Old 02-24-2016, 10:04 AM   #869
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How about leaving the politics out of the discussion, eh?
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Old 02-24-2016, 11:53 AM   #870
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Given the impact that this worldwide pumping is having on the price of oil, effecting global markets and hurting US shale companies, I don't see why the US should not declare a moratorium on purchasing any foreign oil. Seems to me that would cause further woes for the Saudis who seem to be waging an oil war on the US. Thoughts?
Here's some thoughts:

Well, first of all, crude oil is traded by brokers widely to minimize tankering costs and curtailing foreign oil purchases would be like untangling a ball of snakes floating down the Mississippi. We buy and trade oil with quite a number of foreign entities (over 20 last time I checked the EIA). Our biggest import of crude is from Canada and then Mexico. Saudi's are third I think.

Plus, the Saudi's own three U.S. refineries and over 400 terminals in the U.S. that were bought from Texaco in the late 1980's (I worked on that transaction for ARAMCO at the time). The Venezuelan's own a refinery in Lake Charles, Louisiana and other assets in the U.S. (at least they did recently). Foreign asset owners has rights to bringing in their crude for processing with their assets so curtailing them will be difficult.

Another reason is that we are not completely able to provide our full crude slate here in the states with our U.S. producers. We are short a few million BPD and it would take several years to get to the point where we can produce enough crude oil to meet demand and add a replacement buffer percent.

Also, in recent years, as an example, Anadarko partnered their Eagle Ford assets with the Korean National Oil Company to the tune of $2 billion in funding for future drilling. The Korean's would sell their portion of the crude here. There also have been some Chinese deals in the U.S.

There are many more deals like this that throw a wrench into the soup if the U.S. were to limit foreign crude purchases for our domestic use.
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Old 02-24-2016, 03:12 PM   #871
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Thanks aja for the detailed answer. Certainly more going on here that I was not aware of, and unfortunately it looks like no easy way to turn this situation around, but I do wish we would at least do something to send a message to the Saudis in particular.
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Old 02-24-2016, 08:35 PM   #872
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Thanks aja for the detailed answer. Certainly more going on here that I was not aware of, and unfortunately it looks like no easy way to turn this situation around, but I do wish we would at least do something to send a message to the Saudis in particular.
I wish there was an easy solution to $70/BBL oil (which we all need), but there doesn't seen to be one.
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Old 02-25-2016, 04:26 AM   #873
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Controlling oil imports sounds like the beginning of a trade war. I thought that high tariffs and trade wars were what caused the great depression in the 30's. I'm thinking there might be a better way.

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Old 02-25-2016, 05:34 AM   #874
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Our biggest import of crude is from Canada and then Mexico. Saudi's are third I think.
Saudi is second
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Old 02-25-2016, 05:40 AM   #875
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How about leaving the politics out of the discussion, eh?
Agree! Certainly politics has never been a part of the oil industry.
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Old 02-25-2016, 06:01 AM   #876
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Agree! Certainly politics has never been a part of the oil industry.
Thanks for your support.
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Old 02-25-2016, 06:30 AM   #877
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Controlling oil imports sounds like the beginning of a trade war. I thought that high tariffs and trade wars were what caused the great depression in the 30's. I'm thinking there might be a better way.

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I wouldn't term this thought as a trade war, but what is wrong with supporting the industry within your own county, particularly if another country is out to kill your market growth.
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Old 02-25-2016, 07:21 AM   #878
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Thanks for your support.

Now if only we could get the politicians to agree! -ERD50
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Old 02-25-2016, 07:23 AM   #879
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I wouldn't term this thought as a trade war, but what is wrong with supporting the industry within your own county, particularly if another country is out to kill your market growth.
In some cases, the other countries retaliate with their own trade barriers.

Also, if we can get a product cheaper from outside our borders, shouldn't we do that? Isn't that good for our economy? Better to produce the things here that we are good at, and sell those to people outside our borders who cannot produce it cheaper than we can.

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Old 02-25-2016, 07:37 AM   #880
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In some cases, the other countries retaliate with their own trade barriers.

Also, if we can get a product cheaper from outside our borders, shouldn't we do that? Isn't that good for our economy? Better to produce the things here that we are good at, and sell those to people outside our borders who cannot produce it cheaper than we can.

-ERD50
In general, I agree with what you are saying. However, we have nafta with canada and mexico, and could continue to buy from them and use our own oil production. Certainly the OPEC countries are not buying our oil.

It seems to me, we forget the lessons learned from the 1970s and why being energy independent from foreign energy sources has been a long time mantra, but never seems to be realized.
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