VBIN's oil stock thread.

[EricL]

(03-28-2022, 09:29 AM)ConnerM Wrote: I only own CVX. Have been wanting to add some oil but feel like I missed the run. We have a nice dip today. Would y0u buy some good quality names today. Thinking DVN and EOG

Maybe quarter position today and add on dips?

I think that is a reasonable approach. Too volatile to go all in at once, but taking a bite at a time makes sense if there is a bigger pullback ahead.

[fenders53]

If this is a long-term hold I would add CVX only on a big dip. IMO it's highly likely CVX is higher this summer, but it will give much of it back when supply-demand is back in balance. That always happens. The time to steal CVX shares has passed.

[fenders53]

I caught the morning dip and sold EOG and XLE puts yet again. All of mine expire fairly soon. I think I will wait to see if peace breaks out and place my summer trades then. That will likely dump oil prices briefly.

[fenders53]

Not shocked the reserve will be tapped again, but the extreme level did surprise me. Clearly kicking the can down the road. May take some of the sizzle off the summer oil price spike. I am an optimist, and I don't want oil to crash it's own demand so perhaps there is no real harm in this? I wanted t load up on oil when I heard this news but I will wait and see if oil has a dip for a week or two, I'm not expecting that actually. At least not for more than an hour or two. This is not a coherent energy policy.

[EricL]

(04-01-2022, 12:57 PM)fenders53 Wrote: Not shocked the reserve will be tapped again, but the extreme level did surprise me.  Clearly kicking the can down the road.  May take some of the sizzle off the summer oil price spike.  I am an optimist, and I don't want oil to crash it's own demand so perhaps there is no real harm in this?  I wanted t load up on oil when I heard this news  but I will wait and see if oil has a dip for a week or two,  I'm not expecting that actually.  At least not for more than an hour or two.  This is not a coherent energy policy.

The announcement has knocked oil down to $100, but considering the massive release that was announced, the drop is pretty small.

I think the market is starting to wise up to the fact that there are long-term supply issues. While real-time prices dropped, the futures strip actually increased in price, and many oil stocks are higher now than when it was announced.


Cost inflation, labor supply, and lack of materials continue to hamper drilling. I don't see any material supply increase happening anytime soon.

[fenders53]

(04-01-2022, 01:21 PM)EricL Wrote:

(04-01-2022, 12:57 PM)fenders53 Wrote: Not shocked the reserve will be tapped again, but the extreme level did surprise me.  Clearly kicking the can down the road.  May take some of the sizzle off the summer oil price spike.  I am an optimist, and I don't want oil to crash it's own demand so perhaps there is no real harm in this?  I wanted t load up on oil when I heard this news  but I will wait and see if oil has a dip for a week or two,  I'm not expecting that actually.  At least not for more than an hour or two.  This is not a coherent energy policy.

The announcement has knocked oil down to $100, but considering the massive release that was announced, the drop is pretty small.

I think the market is starting to wise up to the fact that there are long-term supply issues. While real-time prices dropped, the futures strip actually increased in price, and many oil stocks are higher now than when it was announced.


Cost inflation, labor supply, and lack of materials continue to hamper drilling. I don't see any material supply increase happening anytime soon.

I agree. We'll get a little increased production from random sources around the globe, and I am sure our oil companies will try to be efficient and get what they can to market.  There is nothing wrong with $100 oil in April.  Our companies are going to print money.  I don't want the party to end and $200 might just do that.  There are some fragile economies in the world now that monetary policy is tightening.   Ours may be one of them.

[EricL]

(04-01-2022, 06:21 PM)fenders53 Wrote:

(04-01-2022, 01:21 PM)EricL Wrote:

(04-01-2022, 12:57 PM)fenders53 Wrote: Not shocked the reserve will be tapped again, but the extreme level did surprise me.  Clearly kicking the can down the road.  May take some of the sizzle off the summer oil price spike.  I am an optimist, and I don't want oil to crash it's own demand so perhaps there is no real harm in this?  I wanted t load up on oil when I heard this news  but I will wait and see if oil has a dip for a week or two,  I'm not expecting that actually.  At least not for more than an hour or two.  This is not a coherent energy policy.

The announcement has knocked oil down to $100, but considering the massive release that was announced, the drop is pretty small.

I think the market is starting to wise up to the fact that there are long-term supply issues. While real-time prices dropped, the futures strip actually increased in price, and many oil stocks are higher now than when it was announced.


Cost inflation, labor supply, and lack of materials continue to hamper drilling. I don't see any material supply increase happening anytime soon.

I agree. We'll get a little increased production from random sources around the globe, and I am sure our oil companies will try to be efficient and get what they can to market.  There is nothing wrong with $100 oil in April.  Our companies are going to print money.  I don't want the party to end and $200 might just do that.  There are some fragile economies in the world now that monetary policy is tightening.   Ours may be one of them.

I agree that a huge spike is the last thing we need. 

$90-$110 is just fine and will lead to some incredible cash flows for E&P's. Just look what EOG has been doing for special dividends already, and that's from last year's $60-$80 prices. Now they are debt-free with prices $40 higher, guessing there will be special dividends every quarter going forward.

[Kerim]

I feel like I've been sleeping on this one. You all still liking EOG at today's prices? Anyone following Berskshire into OXY?

[fenders53]

Yes, you missed the low risk-high payoff part Kerim. Will oil go higher? I really think it will. If oil it goes much higher will politicians try to punish them with tax proposals with an election coming? I think they will. Will those proposals pass? I don't think they will. Would the mere threat of a
windfall profits taxes keep a leash on oil stock prices? I think it might.

Watch for a dip. Big stock profits are not a slam dunk from here IMO.

[vbin]

(04-02-2022, 12:57 PM)Kerim Wrote: I feel like I've been sleeping on this one. You all still liking EOG at today's prices? Anyone following Berskshire into OXY?

I still had some oxy left. Bought more again after buffet started buying. Vicky is buying her own oxy too.

Oxy pumps ~2m barrels oil a day, 2*365 = 730m. If oil stays at 100 for 1 year, that’s 730*100 = 73,000m in cash flow. Do the maths where this company is trading at. This is misprinting at its best.

Edit: oxy pumps combined 1.9m oil and gas. Oil is approx 400-500m a year( based on what I found online). Still very cheap. They gonna pay down more debt, may be issue special divvy and I think their ratings will get revised.

[fenders53]

OXY share price is self inflicted. They should have it sorted out by the time EOG pays out special dividend #5.

[rnsmth]

(04-02-2022, 12:57 PM)Kerim Wrote: I feel like I've been sleeping on this one. You all still liking EOG at today's prices? Anyone following Berskshire into OXY?

EOG treated shareholders very well in 2021 at what they said was a $68 a barrel price.  

I am going to hold, I have a full position, along with overweight positions in PBA and ENB and a smaller one in KMI.  Given my overweight position in energy, I am not adding here.