VBIN's oil stock thread.

[EricL]

(10-11-2021, 06:13 AM)fenders53 Wrote:

(10-10-2021, 10:27 PM)EricL Wrote:

(10-07-2021, 06:06 AM)fenders53 Wrote: And just like that oil is not $80.  I realize it's meaningless soon enough but I will always be amazed how easily oil can be jawboned 5% without actually doing anything.  It really is a lot of money though.

Three days later and it's pushing $81.



The rally is just starting guys. $100 oil by Christmas...

Can you hear the fracking rigs firing up yet? 

I hope they are, or we're going to see an oil crisis like in the 70s.

[fenders53]

Are we are gonna have to start limiting your time on the S.A. boards?  

My EOG shares were called away.  I will lose some XOM and XLE soon.  On a happier note this may be the year I don't lose money in oil.

[EricL]

(10-11-2021, 07:26 AM)fenders53 Wrote: Are we are gonna have to start limiting your time on the S.A. boards?  

Ha! Thanks for always offering the counter argument. 

Don't worry, I'm not going crazy buying or anything, just holding and enjoying the ride. I've been waiting seven years for this.

[fenders53]

(10-11-2021, 07:40 AM)EricL Wrote:

(10-11-2021, 07:26 AM)fenders53 Wrote: Are we are gonna have to start limiting your time on the S.A. boards?  

Ha! Thanks for always offering the counter argument. 

Don't worry, I'm not going crazy buying or anything, just holding and enjoying the ride. I've been waiting seven years for this.

I know you have and glad to see it paid off.  I completely understand why oil trend looks bullish for years.  I completely don't get how we fundamentally get from 65 last month to 100 by DEC but stranger things have happened.  It's not like 2020 negative infinity oil made sense either lol.

I think some investors will get destroyed on commodities.  Oil looks safer as long as the rise is rational.   Unlike lumber for instance where it clearly wasn't sustainable. Far better to stay in the zone for many quarters.

[fenders53]

(10-11-2021, 07:40 AM)EricL Wrote:

(10-11-2021, 07:26 AM)fenders53 Wrote: Are we are gonna have to start limiting your time on the S.A. boards?  

Ha! Thanks for always offering the counter argument. 

Don't worry, I'm not going crazy buying or anything, just holding and enjoying the ride. I've been waiting seven years for this.

I appreciate the dissenting opinions from you on some other stocks you have talked me out of due to balance sheet/debt issues.  You have saved or made me some money.  I am just trying to keep things real on this thread.  Oil just might go to $200 and XOM to $125.  If it happens it will be fleeting.  I've been sucked into the oil FOMO  too many times.  Easy to buy the narrative from very intelligent oil bulls that have 80% of their port in oil (which isn't all that intelligent BTW but you know that).  I'd prefer to read the bull thesis somewhat filtered here because I know you and VBIN are watching.  I would be crushed if I dare say anything negative on an oil thread on the net.  The only message I have to any lurkers here is be careful.  If you had the courage to buy the lows last year you scored.  If oil hits $100, folks will be tripping over each other to buy the FOMO, and most of them will mess up the execution at some point.  It's arguable whether oil is a buy and hold investment going forward.  If you don't buy it scary low I don't even think it's arguable.  Something will come along and put a stick in your spokes and you are enduring the pain for years.  I could direct this same statement to at least half of the commodities we can easily invest in.

[vbin]

I think the we had ~18 months to load up on oil. If someone did not, right now is a time to be a little cautious while starting a new position.

I won't be going crazy on oil at this point. To buy leap calls or to buy quality names might be the way to go get more exposure right now.

[fenders53]

I've entered mid-cycle a few times and managed to give back gains and a lot more. Fast forward to MAR 22 and suppose XOM is at 75. They are chugging along and paying off debt and covering the dividend. These days they aren't leveraged up where it might double again fast. But what about that sexy little leveraged up oil driller over there growing REVs at 75% the past few quarters. Moon shot baby! We are gonna be rich in a year and all the cool kids are buying it. No different than tech when it hits a lull in the big caps. AAPL and AMZN are flat lately so lets do something stupid for a quick double instead. Way back I got killed on offshore drillers. Good companies like Diamond Offshore and Transocean. The story changed and I didn't recognize the trend. I also failed to respect the enormous debt that was quite normal for the sector. It all came tumbling down. This way back in the late 90s.

I'm embarrassed to admit I got sucked into Seadrill. Motley Fool was hyping them and they have an OK rep. They didn't give up soon enough and neither did I. I averaged down more than once and basically lost it all.

I got "kindered" by KMI. Cramer was hyping the hell out of it and Rich Kinder was n the show with a compelling story. I don't feel too bad for that one. The market crashed and I had time to cut my losses. But I stubbornly held and it was a huge mistake even halfway through this price cycle.

Averaging down has got me in every one of the above situations. It just made things worse without exception. You know what would have fixed it? Admit the cycle may be in for a long downturn and I owned debt laden junk. I didn't have to bail on the sector, but hunkering down in XOM-CVX and the other majors would have been far less devastating. Returns wouldn't have been amazing but I could have closed my eyes and collected the Div. A 2% total return for a decade is a helluva lot better than a handful of 90%+ tax write off losses. It's hard to make up for that later.

The averaging down thing is something I have control of going forward due to my experiences. Just sell or hold what I own and give it time, because it might be years. No, it will almost certainly be years for most commodities. The urgency to buy more so I can at last get back to even was always in my head and not reality.

I hope somebody might benefit from my oil spleen vent. It's not easy and it never will be.

[EricL]

LINK

   

[EricL]

Counter-seasonal draws from Cushing yet another bullish indicator on crude supplies.

LINK

   

[vbin]

Oil inching to $84. There is another article on oil which said a bunch of oil nation's don't have the capacity to expand the production due to disinvestment in capex or no investment in new oil atall. https://oilprice.com/Energy/Crude-Oil/Ho...y-Add.html

[fenders53]

I don't know where oil is in two years but it looks about crash proof for awhile.  That's really all you need.

[EricL]

Jeff Currie from Goldman Sachs,  part of transcript from a discussion this morning on the commodities super cycle.
 
Jeff-

   Yeah, it's far more bullish than, you know, we could have ever envisioned. Let’s take oil. The deficit that we can measure at the end of last month was running somewhere around 4.5million barrels per day. That's nearly 5% of the market is in a deficit. That is such a large hole that OPEC the U.S. administration, nobody's going to fix this. This is like, you know, the train is off the track and you're watching it in slow motion.
 
  But it's not just oil. You see it in copper,copper inventories dropping 8%, 10% week after week. These are numbers I have never envisioned or never seen before. You know, and you can think about what is going on here. And I think, you know, it goes back to Tracy's point about that zinc smelter shutting down in Europe. Problems in one market create problems in the other. So we think about, you know, first it was coal in China, then it became gas in Europe. Then it became aluminum in China, which then impacts copper elsewhere in the world. And it keeps this chain reaction going and each one of these markets get tighter and tighter.
 
So what is it about oil that makes this deficit so much larger than we could have ever envisioned? It’s because you now have oil being used in lieu of both coal and gas because of the shortages in those markets. So bottom line is, you know, we see a lot of up side risk from these price levels, which are far greater than the price levels we were forecasting when we spoke, you know, nine months ago. So bottom line, the underlying picture is far more bullish than what we had expected nine months ago, but the drivers of it are pretty much in line exactly [with] what we thought just in a much larger degree than what we thought