VBIN's oil stock thread.

[vbin]

(11-10-2020, 10:50 AM)fenders53 Wrote:

(11-10-2020, 10:11 AM)EricL Wrote: Here's a new oil market analysis from one of the research firms I follow:



Well worth a read for those considering energy.

Long article but I read a lot of it.  It reminds me of a lot of S.A. articles.  IMO only the foolish consider it a worthless commodity going forward.  I've lost a lot of money over the past three decades believing that is all I needed to know.  Just keep the faith and my day would come.  Where I screwed up was thinking it was a long-term buy and hold investment like a blue chip DGI stock.  It simply wasn't during most of my investment lifetime. 

VBIN is fairly deep in XOM at $60.  It looked like a good deal to me as well but I bailed and placed my capital elsewhere when it didn't appear to be so.  I do believe XOM might return to $60 in 3 or 5 years.  If the dividend holds it would be a decent enough return IMO.  He needs it to go to $100 in five years for it to be a truly good investment.  Opportunity cost matters in an epic bull market.  You have to make money when we aren't in a five year sideways market.

It's not a small problem that "ethical" investors have shunned oil for years.  What would change that?  I definitely don't invest like that, but if the millennials adhere to the narrative it becomes a self fulfilling prophecy. It doesn't matter if oil goes to $100 BBL if fund managers won't buy the stock. It really is about market sentiment and that's not a original thought for sure.  60yr+ old plus investors will keep the faith alive for now, and write lots of compelling articles.  Convincing young investors is the task at hand and they just voted in an anti-oil  president.  He was quite clear he believes oil will become a smaller part of the energy future and he has some influence on that outcome.  He is wrong in the near-term but we'll see how much that matters.

Fenders XOM isnt the only thing I have but it's the largest. Oxy at $15, dcp, Wes, xle, psx. Excluding xom and oxy, I am making money in rest of the oil as of now. I made the mistake of going in too fast in xom.

Why you lost money in oil in last 3 decades? Xom has performed very well, if you bought it 3 decades ago and held on to it and a lot of other oil companies as well.

[fenders53]

I haven't owned much XOM over the years. I always made similar mistakes though. Oil drops for a year and I'd start averaging in. A few years later the company is BK or just struggles for a decade. DO, RIG and SDRL were the worst. KMI still down about 75%. Gave up on anything buy majors. XOM BP and RDS wasn't rewarding the past three years. I have made money on a few oil stocks but I'll never invest enough to ever get even. I can't really think of any commodity I am confident will match the SPY over time. They are tricky.

[EricL]

14 million barrel draw from today's API report, compared with a 5YR average build of 4 million barrels for this time of year.

#Crude -5.147 #Cushing -1.17 #Gasoline -3.297 #Dist -5.619

[vbin]

(11-10-2020, 10:11 AM)EricL Wrote: Here's a new oil market analysis from one of the research firms I follow:



Well worth a read for those considering energy.

Eric, Thank you so much for sharing. Very interesting read. What oil stocks or ETFs are you looking at? How are you planning to invest in oil? I checked out your website but did not see anything specific to current events with oil.

[fenders53]

I think Eric is currently in CVX, XOM, KMI in his income growth port? I think OXY got booted. What have you owned in the past.

Do either of you know what % of oil is used by aviation and how much of that is passenger? It would seem that ground transportation dwarfs it but maybe not?

[EricL]

(11-11-2020, 02:51 AM)vbin Wrote:

(11-10-2020, 10:11 AM)EricL Wrote: Here's a new oil market analysis from one of the research firms I follow:



Well worth a read for those considering energy.

Eric, Thank you so much for sharing. Very interesting read. What oil stocks or ETFs are you looking at? How are you planning to invest in oil? I checked out your website but did not see anything specific to current events with oil.

I'm pretty boring with my investments, as I hold CVX, EOG, KMI, and XOM in my DGI account. Also own ENB and OKE in another account, and EGY for a speculative position. For my DGI account, energy is currently a 5.6% weighting, you can see how much of each position I hold about 3/4 of the way down this page.

I don't follow ETF's much, but just looking at the top holdings of XLE, I think that would be a reasonable approach, as CVX/XOM/KMI/EOG represent about 50% of the assets.

[fenders53]

(11-11-2020, 09:09 AM)EricL Wrote:

(11-11-2020, 02:51 AM)vbin Wrote:

(11-10-2020, 10:11 AM)EricL Wrote: Here's a new oil market analysis from one of the research firms I follow:



Well worth a read for those considering energy.

Eric, Thank you so much for sharing. Very interesting read. What oil stocks or ETFs are you looking at? How are you planning to invest in oil? I checked out your website but did not see anything specific to current events with oil.

I'm pretty boring with my investments, as I hold CVX, EOG, KMI, and XOM in my DGI account. Also own ENB and OKE in another account, and EGY for a speculative position. For my DGI account, energy is currently a 5.6% weighting, you can see how much of each position I hold about 3/4 of the way down this page.

I don't follow ETF's much, but just looking at the top holdings of XLE, I think that would be a reasonable approach, as CVX/XOM/KMI/EOG represent about 50% of the assets.

I'm not a huge ETF fan, but this one of those times I could get onboard with XLE for a couple reasons.  The strongest players dominate it and the sector is down pretty hard.  Not saying any of those top holding are cutting their Div, but the sky is still a little black and and if they cut those individual stocks would get whacked hard.  VBIN already owns a fair amount of XOM and some diversification within the sector makes a lot of sense to me.  If all is well soon, the ETF will do well enough vs the majors.

[divmenow]

Oil will fall right back where it was last week. Don't get too excited lol

[kblake]

(11-11-2020, 10:48 AM)divmenow Wrote: Oil will fall right back where it was last week. Don't get too excited lol

Your probably right. But it still represents great value at these levels if these companies can maintain their dividends. The vaccine news wont even be available until next May. So people will still be staying in doors and do less driving.  And even then people will still travel less. But I'm betting on a descent 2022 

I actually just bought XOM and VLO

I cant wait 3-5 years to make 25% 

[EricL]

(11-11-2020, 07:57 AM)fenders53 Wrote: Do either of you know what % of oil is used by aviation and how much of that is passenger?  It would seem that ground transportation dwarfs it but maybe not?

This article is a few years old, but I doubt the percentages have changed much. 

Here's the relevant image from it:


As of 2015, vehicle transportation represented about 20% of liquids demand, trucking ~20%, and ship/trains/planes ~10%.

[fenders53]

(11-11-2020, 10:56 AM)kblake Wrote:

(11-11-2020, 10:48 AM)divmenow Wrote: Oil will fall right back where it was last week. Don't get too excited lol

Your probably right. But it still represents great value at these levels if these companies can maintain their dividends. The vaccine news wont even be available until next May. So people will still be staying in doors and do less driving.  And even then people will still travel less. But I'm betting on a descent 2022 

I actually just bought XOM and VLO

I cant wait 3-5 years to make 25% 

You're gonna be rich Kblake!!!  Actually I am getting near a re-entry point for a trade.  I was waiting for something that looked like a bottom.  That down everyday thing is hard on your morale. If I can hold for 6 months for a pop and grab a div along the way I'll call it a win.  Oil will pull back a bit as the pandemic gets nasty for a few months.  OPEC just adjusted demand projections down again.  That's a good thing IMO as they have to keep a leash on suppliers through the winter.  I may be full of it but you gotta have a narrative right? 

[fenders53]

(11-11-2020, 11:05 AM)EricL Wrote:

(11-11-2020, 07:57 AM)fenders53 Wrote: Do either of you know what % of oil is used by aviation and how much of that is passenger?  It would seem that ground transportation dwarfs it but maybe not?

This article is a few years old, but I doubt the percentages have changed much. 

Here's the relevant image from it:


As of 2015, vehicle transportation represented about 20% of liquids demand, trucking ~20%, and ship/trains/planes ~10%.

Thanks Eric.  I think we can add our little tweaks to the curves knowing what we know today about growth rates (or lack thereof) for our UTEs production, general direction of renewables, pandemic etc.  I asked the question because I have read comments that seemed to over-react to the passenger air travel peaks and valleys.  Doesn't seem to me it makes or breaks oil demand in the big picture.