Early Retirement & Financial Independence Community

Early Retirement & Financial Independence Community (http://www.early-retirement.org/forums/)
-   Stock Picking and Market Strategy (http://www.early-retirement.org/forums/f44/)
-   -   I like Oil (http://www.early-retirement.org/forums/f44/i-like-oil-74689.html)

dallas27 11-28-2014 11:23 AM

I like Oil
 
Crude prices seem like they are entering a price range that is unsustainable long term. Seems like a softball pitch to me.

USO/UCO is where I'll be in the next week or two, probably UCO.

Argument against Oil rebounding significantly in the next 3 years?

Ed_The_Gypsy 11-28-2014 12:45 PM

I do, too. My oil portfolio does not seem to have dived at all.
I like pipelines better, though. They get paid no matter what WTI is. I am watching the dividends, though.
My HO: a good time to buy.

bld999 11-28-2014 12:51 PM

I liked oil a little too early.. . :laugh:

I'm patient, though.

Lakewood90712 11-28-2014 01:07 PM

Quote:

Originally Posted by dallas27 (Post 1523280)
Crude prices seem like they are entering a price range that is unsustainable long term. Seems like a softball pitch to me.

USO/UCO is where I'll be in the next week or two, probably UCO.

Argument against Oil rebounding significantly in the next 3 years?

Define "Significantly"

I like oil stocks too, for the dividends. Might buy some more when things settle down.

I don't like trying to catch falling knives.

dallas27 11-28-2014 01:25 PM

Quote:

Originally Posted by Lakewood90712 (Post 1523333)
Define "Significantly"

I like oil stocks too, for the dividends. Might buy some more when things settle down.

I don't like trying to catch falling knives.

I'm not talking company stock, I'm talking about direct play on the price of a barrel. USO/UCO track the market price. UCO is leveraged 200%.

Significant is at least 20% percent, in my mind. to each their own. Although I'm eyeing the leveraged play with UCO on this one.

aja8888 11-28-2014 01:26 PM

Wait until you read that majors (and some smaller companies) are shutting in wells and curtailing new drilling (cutting CAPX). Then wait a bit longer when auto companies can't build enough big trucks and SUV's. Then load up.

If you have midstream MLP's, hold them as they won't be affected significantly by crude or natural gas prices.

MichaelB 11-28-2014 02:30 PM

Actually, one bullish bet on a petroleum price recovery would be one of the Russia ETFs. RSX is the biggest but there are others.

Lakewood90712 11-28-2014 03:49 PM

Quote:

Originally Posted by aja8888 (Post 1523343)
Wait until you read that majors (and some smaller companies) are shutting in wells and curtailing new drilling (cutting CAPX). Then wait a bit longer when auto companies can't build enough big trucks and SUV's. Then load up.

If you have midstream MLP's, hold them as they won't be affected significantly by crude or natural gas prices.

When oil prices go back up , do the oil service and drilling co. stocks tend to lead, or lag the crude oil price run up ?

Maybe I can make enough money to buy one of those slick , $60,000, 11 mpg. Ford King Ranch pick-Up trucks.

eta2020 11-28-2014 03:57 PM

Quote:

Originally Posted by MichaelB (Post 1523357)
Actually, one bullish bet on a petroleum price recovery would be one of the Russia ETFs. RSX is the biggest but there are others.

With RSX you have to be bullish on Putin not invading another country as well.

Totoro 11-28-2014 03:58 PM

Quote:

Originally Posted by dallas27 (Post 1523280)
Argument against Oil rebounding significantly in the next 3 years?

I think a reasonably good bet that oil will go back up. Exactly when is tough to know.

Reasons it might not rebound are the same factors influencing it now:
  • Shale oil & gas extraction experience keeps growing, potentially making it ever more cheaper
  • Shift from oil to gas in some areas
  • Shift from oil to electric in other areas
  • Other oil substitutes keep getting cheaper, taxes keep going up
  • Some of the demand drops away through energy savings (insulation, efficiency)
  • Oil producers can't reduce production by much since they need the revenues now
I'd only play on a price rise if I could find a specific event which is very likely to happen before a certain time. Not sure there is one for oil though.

Totoro 11-28-2014 04:05 PM

Quote:

Originally Posted by MichaelB (Post 1523357)
Actually, one bullish bet on a petroleum price recovery would be one of the Russia ETFs. RSX is the biggest but there are others.

It's a dual bet though in the case of Russia: you are betting that the sanctions against Russia won't escalate.

Gazprom specifically is getting silly in terms of valuation, now listed at roughly twice its typical earnings (!).

eta2020 11-28-2014 04:23 PM

RSX price is driven by geopolitical risks hence loss or gain can be much huge.

There is no real private property since Putin can put anybody to jail and confiscate the companies that they own. Yevtushenkov is last such case.

That makes RSX a trade. I like buy and hold :)

Economically China is a winner having Russia as source of cheap natural resources. I would rather buy China as benefactor of cheap oil and Russia selling natural resources at discount price due to growing sanctions. Those are smart guys negotiating natural gas deal for last 10 years until they got super price for 30 year deal.

imoldernu 11-28-2014 04:32 PM

I wasn't smart enough to predict the current drop in prices.

I KNOW I'm not smart enough to predict future prices. :frown:

FUEGO 11-28-2014 04:44 PM

Interesting. DW (who has no interest in the markets at all) just commented now is the time to buy oil not more than 1 hour ago.

dallas27 11-28-2014 06:34 PM

Quote:

Originally Posted by aja8888 (Post 1523343)
Wait until you read that majors (and some smaller companies) are shutting in wells and curtailing new drilling (cutting CAPX). Then wait a bit longer when auto companies can't build enough big trucks and SUV's. Then load up.

If you have midstream MLP's, hold them as they won't be affected significantly by crude or natural gas prices.


Agreed, in fact i think this is the aim of opec's endgame.


Sent from my iPhone using Early Retirement Forum

Ed_The_Gypsy 11-28-2014 09:11 PM

Quote:

Originally Posted by dallas27 (Post 1523342)
I'm not talking company stock, I'm talking about direct play on the price of a barrel. USO/UCO track the market price. UCO is leveraged 200%.

Significant is at least 20% percent, in my mind. to each their own. Although I'm eyeing the leveraged play with UCO on this one.

Oh. Sorry, not acquainted with trades on the commodity itself. Too tricky for me.

I PREDICT (ahem) that the price WILL go up again. :coolsmiley: But I have no idea when. Meantime, back to the pipeline dividends. :)

Ed_The_Gypsy 11-28-2014 09:24 PM

Quote:

Originally Posted by Ed_The_Gypsy (Post 1523324)
I do, too. My oil portfolio does not seem to have dived at all.

I spoke too soon. The Thanksgiving holiday closed the markets. LNCO (why? they are hedged) and Canadian Oil Sands took hits, but Matthews Asian Growth and Income (indirect play on China, subject opened earlier in this thread) went up. Pipelines/midstream relatively stable. I am not doing anything until the new year when I start doing the Backdoor Roth. Long and staying long.

Sunset 11-29-2014 12:41 AM

Well prices for crude fell about 2007 from 145 bbl to 40 bbl in about a year, and took about 3 yrs to climb back to 80 bbl.
So really prices could fall another $20 a bbl pretty easily.

frayne 11-29-2014 06:11 AM

Quote:

Originally Posted by imoldernu (Post 1523399)
I wasn't smart enough to predict the current drop in prices.

I KNOW I'm not smart enough to predict future prices. :frown:

Ditto ! :facepalm:


Interesting read and some think low prices are here to stay for awhile.


http://www.bloomberg.com/news/2014-1...-to-shale.html

heeyy_joe 11-29-2014 07:45 AM

UPS & FDX are big beneficiaries of lower energy prices. Shoppers pounding the pavement wearing out their shoes, go long DSW.


All times are GMT -6. The time now is 04:23 PM.

Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.