(03-07-2020, 09:23 AM)EricL Wrote:(03-06-2020, 08:40 PM)fenders53 Wrote: Oxy should be the one to pickup the shale slack when the smaller get squeezed out and demand returns. What happens to our big oil share prices until then might not be pleasant for us longs. We will have to see if opec and Russia cut production of run the frackers off now. They have not been threatening that to my knowledge.
I actually think OXY is in big trouble at <$40 oil. They took on tons of debt for the APC acquisition, and haven't been able to unload assets to repair the balance sheet like they'd hoped to because oil prices are so low. I haven't sold mine yet, and at this point I'll probably just hold it till the dividend is eventually cut. But if I was recommending to others in the current market, it would definitely be CVX or XOM first. EOG has a lower yield, but is also much stronger with the balance sheet.
We agree, but the forum is likely tired of "fenders the oil bear". This will be the third time I've been crushed by oil since the mid 90s. Each and every time, the popular forum of the day (S.A. this time) was swarming with oil bulls that just kept being wrong for years. This is the time for very strong balance sheets. Supply-demand is fundamentally flawed. It's likely we may be facing a global slow down for a minimum of a few quarters. Oil companies are hitting multi-year lows because it's actually rational. They are completely at the mercy of OPEC+ Russia. We'll see what they decide. I'm not cheering for oil to get crushed. I'll keep my BP shares. They may be sub $20 soon but they'll survive. I think OXY will survive too, but you won't like the share price and dividend cut if oil heads below $40 for long. It stinks waiting years to maybe get back to even. Every time oil shares spike, bag holders will be dumping. Only way you make money is if you get lucky enough to pick the bottom, whenever that is, then start leaving when every wildcatter on earth is borrowing money again. You'll know it's closer to the bottom when leveraged smaller oil companies start going BK. That happens every time. At some point low oil prices will help the rest of our ports, (and cheap gasoline prices). I guess that's the silver lining for many other sectors. That, and the majors will be able to pick up assets from banks and failing firms for 75% off if they actually need any.