I like Oil

Ed_The_Gypsy said:
:(...but the dividends are still there and I can't lose much more if I hang on for a while.
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I'm not liking CVX right now. I'm down about 8% not counting dividend. SDLP is backto where I bought it but I got the 15% dividend so i'm somewhat happy about that one. Plan to hold long term and still feel confident i'll be ahead before too long.
 
aaronc879 said:
I'm not liking CVX right now. I'm down about 8% not counting dividend. SDLP is backto where I bought it but I got the 15% dividend so i'm somewhat happy about that one. Plan to hold long term and still feel confident i'll be ahead before too long.
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I dunno about SDLP, aaron. Comparing a drilling company to a world-class vertically integrated O&G company? Do you remember Reading and Bates? I am not in a position to buy more CVX, but I sure ain't going to sell it now and I wouldn't touch SDLP.
 
SDLP is not SDRL

SDLP is actually in fairly good shape. Not great shape, but fairly good shape.
 
Ed_The_Gypsy said:
I dunno about SDLP, aaron. Comparing a drilling company to a world-class vertically integrated O&G company? Do you remember Reading and Bates? I am not in a position to buy more CVX, but I sure ain't going to sell it now and I wouldn't touch SDLP.
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I have less than 1% of my portfolio in SDLP and a little over 6% in CVX. I know SDLP is much more risky but I felt like I got in at a good price and the upside is pretty big. I plan to hold CVX long term and if SDLP doesn't drop it's dividend then i'll probably keep that too for until there are some good gains to take.
 
aaronc879 said:
I have less than 1% of my portfolio in SDLP and a little over 6% in CVX. I know SDLP is much more risky but I felt like I got in at a good price and the upside is pretty big. I plan to hold CVX long term and if SDLP doesn't drop it's dividend then i'll probably keep that too for until there are some good gains to take.
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SDLP is more like a REIT. I don't think it really *can* drop the dividend since that dividend is how 57% owner Seadrill gets a portion of its cash.

Rigs on contracts are dropped down to SDLP from Seadrill, sort of like how a mortgage is passed from a bank to an investor group.

Wait, that didn't work out so well for investors...

Anyway I still think SDLP will be *ok*.
 
dallas27 said:
I predict we will see oil at ~$40/bl in the next 8 months, with maybe a very brief but dramatic crash into the 20's or 30's. I think there will be a story about a tanker driving in circles looking for a port to offload, or some such type event to crystallize the growing over supply building up. My bet is oil dependent countries are hurting for revenue, are going to continue to overproduce all they can to make of for the low price, exacerbate the oversupply, and in the end some government/region will be perceived as unstable, maybe a few small wars to disrupt supply and correct back to the 50's.
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Confirmation Bias, here I come....

Oil Tankers Are Filling Up and Raking It In - WSJ
 
brewer12345 said:
Actually the amount of floating storage is peanuts now.

Tanker rates are the best they have been in years, but well below the 2008 peaks.
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So you are saying the WSJ has it 100% backwards? You are gonna have to back that claim up somehow.


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dallas27 said:
So you are saying the WSJ has it 100% backwards? You are gonna have to back that claim up somehow.


Sent from my iPhone using Early Retirement Forum
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Floating storage during the crash was over 100MM barrels. It is a fraction of that.

A summary of tanker rates can be seen here: Intertanko
 
Watching the new lows and trying to put the pieces together.

What next?
Iran agreement? Opens fields. If not, alternate Iran oil markets
Russia? Putin to help Greece with energy?
US new drill employment from 2011 to early this year 170 jobs... recent losses 76,000.
Bonds supporting fracking in trouble
Potential China coal/oil markets
Refinery production curtailment
Too many political threats and agreements to count

What are the positives? Most current news and opinion is contradictory. How about a 6 month guess on WTI? $50 ? $60? $70? more? less?
 
If I had to guess I'd think oil will be in a $50-70 holding pattern for a while. Then again, my track record (or lack thereof) in making oil plays is well known here.
 
ziggy29 said:
If I had to guess I'd think oil will be in a $50-70 holding pattern for a while. Then again, my track record (or lack thereof) in making oil plays is well known here.
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i spent 30 + years in the business and I can only say oil won't go to $0.
 
I guess it depends on what you look at. Short term I have no idea... Iran, Greece, opec blah blah blah.

Longer term (5-40 years) I suspect more people will use more energy and oil will remain a major piece of that for at least a few decades. Thus I think the large integrated companies will continue to do well and these 2-5 years will look like a great buying opportunity.

Another possibility is that oil is rapidly going away from use and will be replaced much faster than that and as demand drops rapidly... The companies will have much smaller margins and eventually go under.

If you believe that... Then I'd sell all oil type investments and go elsewhere because who knows which companies will win in the new battle.

I happen to believe that oil will be around through most of my lifetime (Im 40) and the price control will stay with big energy companies. The current situation is noise... But it's very loud noise that can last longer than we may like :)

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This seems to be a time of fear in oil, and as such I see this as a prime opportunity to pick up big oil at great value. The problem is how to catch a falling knife. Even though I'm already overweight in oil, it's hard to pass up some of these low prices. For the long term, it seems a very good time to buy. I only wish I was short in my AA and could use this time to bring my allocation to where it should be, rather than feeling I need to hold back to keep from going further overweight.
Anybody else out there already overweight in oil and trying to justify picking up more shares?
 
hesperus said:
This seems to be a time of fear in oil, and as such I see this as a prime opportunity to pick up big oil at great value. The problem is how to catch a falling knife. Even though I'm already overweight in oil, it's hard to pass up some of these low prices. For the long term, it seems a very good time to buy. I only wish I was short in my AA and could use this time to bring my allocation to where it should be, rather than feeling I need to hold back to keep from going further overweight.
Anybody else out there already overweight in oil and trying to justify picking up more shares?
Click to expand...

Me.

(Licking my chops on Exxon/Mobil, Chevron and Phillips 66, but haven't committed yet.)
 
Buying the dip should payoff right after any announcement that iran will be able to sell oil again. If that news doesn't create a short term bottom, i would be surprised. The risk of course is a longer term downtrend that creates a real price drop crisis, but to me that means it would be time to double down and wait for price stability.


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Seadrill went down to $8.97 today and then shot back up to near $10...all in a couple hours.

Volatility!
 
What specific companies or ETFs are you adding or waiting to add :confused:
 
Personally for me it's more about the particular company. I added NOV today because they got hit hard by a few things. I also added to HP (oil company not computer company :) ) and Exxon.

I think NOV and HP are very well run companies with low debt a d differentiated offerings. I like Exxon because they are massive and also relatively good at managing debt.

I'm avoiding the higher dividend payers that also run huge debt loads and payout ratios approaching or exceeding 100%. If interest rates go up they will struggle and it's hard to break a debt addiction in a low oil price environment. That will allow the companies with string balance sheets to have more decisions: acquire, shore up, etc.

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I am tempted by the refiners, because they must be making money hand over fist with current gasoline prices and the low cost of oil.

I was inches away from taking a large stake in Valero when it was $35...now it is $65 :facepalm:
 
Fermion said:
I was inches away from taking a large stake in Valero when it was $35...now it is $65 :facepalm:
Click to expand...

We've all 'been there' unfortunatly :mad:

As far as oil stocks, I started a position in Conoco Philips (COP) back in /march ?
Bought 50 shares in the mid 60's & 50 more for around 61.

Sold June 29th for a small loss.
Just don't trust oil in the current political environment.

The militant ones are even against natural gas. (not clean enough for them)
I believe the next president will also be a democrat & don't see the forces against oil doing anything but strengthening going forward.

All this IMHO
 
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