VBIN threw this up in "What did you buy today thread". It deserves conversation over time IMO. He stated....
"Given a lot of oil acquisitions/ consolidations are happening and more will happen while the production declines. I am getting bulish on oil 4-5 years from now.
Seriously thinking to add more oil( I am already waist deep in it). Can oil trade at $100 a barrel before 2025? @fenders53 and other more seasoned folks would love to hear some thoughts on this again."
Over the past 25 years I have lost money off and on in oil, in about every imaginable way. Offshore drillers, small start-ups, oil service stocks, pipelines, and recently even the majors. I am done with large investments in oil and here is why.
Oil is in secular decline. I think it's delusional to think otherwise but I'll entertain other views of course. Right now it's cyclical decline as well. There is obviously a demand problem right now with Covid. Recessions will come and go worldwide. IMO it's a supply problem that will never be fixed. It's not that demand will never grow. At some point it will, and perhaps for decades. I have zero confidence any demand spike won't be quickly met with sufficient supply. OPEC has lost control of their cartel, the US is far more efficient at extracting oil by the month. Therea re major producers under sanction of they would flood the market by themselves. Most agree long-term that oil demand will decline. There is motive to get those reserves out of the ground while they still have value. Many of those countries have no significant industry other than oil. Green energy is a bigger problem every year. Renewables get more efficient, and will consume energy demand growth. Countless oil companies in BIG debt trouble looking for an opportunity to sell oil and maybe survive.
I think oil will struggle to get above 60 without being met with excessive demand. I don't think even a significant war could spike it to 100 for long. A large scale and protracted war might be the exception?
I will play some spikes and keep my RDS and ENB for now. I am hard pressed to even think of a worse sector to invest in long-term. Things have changed and I believe it's permanent. It will never be more than a swing trade for me and I don't know what would change that. I have zero faith in the 100s of S.A. authors won't convince me. I've seen how much money they have lit a match to in just the past few years. They seem like old school investors that can't accept a changing narrative. Seems they will go down with the ship, while cursing TSLA and renewables to the bitter end. Companies like XOM will keep enabling with their irresponsible dividend.
"Given a lot of oil acquisitions/ consolidations are happening and more will happen while the production declines. I am getting bulish on oil 4-5 years from now.
Seriously thinking to add more oil( I am already waist deep in it). Can oil trade at $100 a barrel before 2025? @fenders53 and other more seasoned folks would love to hear some thoughts on this again."
Over the past 25 years I have lost money off and on in oil, in about every imaginable way. Offshore drillers, small start-ups, oil service stocks, pipelines, and recently even the majors. I am done with large investments in oil and here is why.
Oil is in secular decline. I think it's delusional to think otherwise but I'll entertain other views of course. Right now it's cyclical decline as well. There is obviously a demand problem right now with Covid. Recessions will come and go worldwide. IMO it's a supply problem that will never be fixed. It's not that demand will never grow. At some point it will, and perhaps for decades. I have zero confidence any demand spike won't be quickly met with sufficient supply. OPEC has lost control of their cartel, the US is far more efficient at extracting oil by the month. Therea re major producers under sanction of they would flood the market by themselves. Most agree long-term that oil demand will decline. There is motive to get those reserves out of the ground while they still have value. Many of those countries have no significant industry other than oil. Green energy is a bigger problem every year. Renewables get more efficient, and will consume energy demand growth. Countless oil companies in BIG debt trouble looking for an opportunity to sell oil and maybe survive.
I think oil will struggle to get above 60 without being met with excessive demand. I don't think even a significant war could spike it to 100 for long. A large scale and protracted war might be the exception?
I will play some spikes and keep my RDS and ENB for now. I am hard pressed to even think of a worse sector to invest in long-term. Things have changed and I believe it's permanent. It will never be more than a swing trade for me and I don't know what would change that. I have zero faith in the 100s of S.A. authors won't convince me. I've seen how much money they have lit a match to in just the past few years. They seem like old school investors that can't accept a changing narrative. Seems they will go down with the ship, while cursing TSLA and renewables to the bitter end. Companies like XOM will keep enabling with their irresponsible dividend.