VBIN's oil stock thread.

[fenders53]

Positive trend, especially given the Covid unknowns. They are acting responsible and not dumping excess on the soft demand yet. If you get another 10% pop in oil maybe they will finally have some breathing room.

My XOM strike 45 put expires Friday. I might keep doing that until I get pulled in or not.

[vbin]

But dollar expected to go.higher. isn't that bearish for oil( don't know.rhe reason, may be just becouse it costs more for nations to import?)

[fenders53]

You are turning into the bearish but what if guy. There are countless things that can swing energy prices some in the short term. I would base my decisions on oil supply/demand in the midterm. Macro world economy and the reports Erik shares. You are willing to hold so MAR21 isn't overly important, and the market doesn't care much about 2025 either. My lack of trust in the long term will affect how I invest but we don't share the same thesis which is OK.

[vbin]

It's all about learning @fenders53 . I try to learn, when someone gives a bearish opinion I throw bullish thesis at then and vice-versa. And I do learn a lot from this forum.

[fenders53]

Fair enough. All commodities are tough. Oil or anything mined are particularly hard to predict in my experience. There are an almost unlimited number of factors. Boom and bust cycles are a certainty. I would concentrate on the supply and demand with your economic thesis. And don't read too many articles with blind faith. Bull articles outnumber bearish 10 to 1. It's been that way since I invested in oil almost 30 years ago. That hurt me more than it ever helped.

I just wouldn't worry much about interest rates, currency exchange rates etc. They are fluid and you can't predict them accurately enough. Even politics often have a different outcome than we expected a few years earlier.

[vbin]

What sector or commodity is easy to predict? I might stick with those.

[fenders53]

Easy isn't the word I would use to describe any natural resource commodity.  Pull up a chart on gold, silver or copper.  They can boom in short order.  Look how long a bust cycle can be.  If you get impatient and build a position quick you can easily wait 5 years.  I've had good luck selling puts on major gold miners like Newmont and Barrick.  Premiums then dividends if exercised.  I try not to chase them.  Decent hedge against an aggressive port but less so lately as they've moved with SPY.  Copper was good and a stock like FCX mines copper and a bit of gold.  I don't bother with small cap miners but that is where bigger gains can be made.  It's hard enough without adding bankruptcy risk.  Coming out of a recession can be lucrative for industrial use commodities like silver and copper.  This is a small part of my game.  I'd have no use for this at age 30.  Late 50s and it seems like a useful skill.  If you decide to learn try a put in ticker GOLD.  Low SP and premiums usually decent.  Watch how it moves when the FED or political narrative swings from money printing or deficit spending. It's not going to outperform a good growth stock over a decade. Gold vs oil? I would have said gold a year ago but it's had a decent run in 2020. Some say bitcoin is digital gold. I say they are entitled to their opinion. I see no mention of bitcoin in the Bible lol. Gold and silver will never be worthless.

[EricL]

The last time exploration budgets were this low was '05/'06, which precluded the price spike to $140 in 2008.

And the 2021 budgets are even lower than what's shown because they've been cut more in recent quarters.

   

[fenders53]

Sometime this summer we are going to come back around to Erik and my difference of opinion on the OPEC+ suppliers. Can they increase output in a month or two as I believe they can? If so, will they allow somebody else to steal market share because somebody is going to cheat if oil heads higher. Or will they just enjoy some higher oil prices for awhile? If they can't increase production, then why the hell do they even have meetings about limiting output every few months?

[vbin]

(02-03-2021, 09:13 AM)EricL Wrote: The last time exploration budgets were this low was '05/'06, which precluded the price spike to $140 in 2008.

And the 2021 budgets are even lower than what's shown because they've been cut more in recent quarters.

Thank you for sharing this Eric. Fenders this is a cyclical commodity, and we are at the bottom or near bottom. Guess what's next int eh cycle?

[fenders53]

(02-04-2021, 03:57 PM)vbin Wrote:

(02-03-2021, 09:13 AM)EricL Wrote: The last time exploration budgets were this low was '05/'06, which precluded the price spike to $140 in 2008.

And the 2021 budgets are even lower than what's shown because they've been cut more in recent quarters.

Thank you for sharing this Eric. Fenders this is a cyclical commodity, and we are at the bottom or near bottom. Guess what's next int eh cycle?

The bottom was negative something.  I'm not certain where we are TBH. Good luck.

[vbin]

(02-04-2021, 04:17 PM)fenders53 Wrote:

(02-04-2021, 03:57 PM)vbin Wrote:

(02-03-2021, 09:13 AM)EricL Wrote: The last time exploration budgets were this low was '05/'06, which precluded the price spike to $140 in 2008.

And the 2021 budgets are even lower than what's shown because they've been cut more in recent quarters.

Thank you for sharing this Eric. Fenders this is a cyclical commodity, and we are at the bottom or near bottom. Guess what's next int eh cycle?

The bottom was negative something.  I'm not certain where we are TBH. Good luck.

That was an market anomaly.