Oil

[Daytr]

Crude prices are starting to look pretty attractive here. A bit of backwardation to be had as well.
Have started a small position this morning & may look to build it up from here.

[JBmurc]

Yes reduced my O&G exposure weeks ago ...weakness could continue till next year ..

[Daytr]

Yes reduced my O&G exposure weeks ago ...weakness could continue till next year ..

Perhaps JB, however there isn't much margin for Shale Producers in the US with WTI at $69/bbl

[JBmurc]

Perhaps JB, however there isn't much margin for Shale Producers in the US with WTI at $69/bbl

fine by me have nil shale investment ..only O&G holdings at present is MAY/IVZ both look to have HUGE conventional O&G resources ...

If shale is uneconomic then that will push consumer demands towards lower-cost producers and investment ..if you're a major O&G player do you want to secure $69bbl cost means of production or sub $50...

if indeed we have lower prices for longer .. also not only does shale .tar sands cost more you have to continue to re-drill -frac new wells as the production decline is so steep ... I invested into CE1 who had sort of mix of tight shale O&G and smaller pools of heavier crudes .. they have to drill several well pa to just keep production flat ... also as shale oil usually has high levels of Nat gas you have to find a buyer ..and when you look at some of the Nat Gas prices in the US/Can the likes of CE1 break even on Gas production ..

Did much research into O&G in North America and was surprised that they are one of the largest exporters of O&G light oils these days yet still import 8Mmbbls per day of petroleum products much of that heavier sour crudes that can be refined into much-needed Diesel /kero / engine oil etc ... US light oils great for petrol plastics etc

[Daytr]

fine by me have nil shale investment ..only O&G holdings at present is MAY/IVZ both look to have HUGE conventional O&G resources ...

If shale is uneconomic then that will push consumer demands towards lower-cost producers and investment ..if you're a major O&G player do you want to secure $69bbl cost means of production or sub $50...

if indeed we have lower prices for longer .. also not only does shale .tar sands cost more you have to continue to re-drill -frac new wells as the production decline is so steep ... I invested into CE1 who had sort of mix of tight shale O&G and smaller pools of heavier crudes .. they have to drill several well pa to just keep production flat ... also as shale oil usually has high levels of Nat gas you have to find a buyer ..and when you look at some of the Nat Gas prices in the US/Can the likes of CE1 break even on Gas production ..

Did much research into O&G in North America and was surprised that they are one of the largest exporters of O&G light oils these days yet still import 8Mmbbls per day of petroleum products much of that heavier sour crudes that can be refined into much-needed Diesel /kero / engine oil etc ... US light oils great for petrol plastics etc

My point is if marginal shale becomes unprofitable then there will be less production.
Less supply, should support higher prices.
Obviously this doesn't play out overnight.
I don't think OPEC will be happy with the current price either.
Putin's recent flying visit to Saudi could be for a number of reasons but it wouldn't surprise me if production cuts were discussed, but I am guessing.

[Valuegrowth]

"JBmurc;1032818]Yes reduced my O&G exposure weeks ago ...weakness could continue till next year .."?

I completely disposed my commodity stocks last year and replaced them with a strong balance sheet firm. Probaby, we may get another opporunity to buy commmodity stocks at some point.

[mistymountain]

"JBmurc;1032818]Yes reduced my O&G exposure weeks ago ...weakness could continue till next year .."?

I completely disposed my commodity stocks last year and replaced them with a strong balance sheet firm. Probaby, we may get another opporunity to buy commmodity stocks at some point.

I'm continuing to HOLD : HZN . Based on their Cash Flow distributions. Small spec hold in other ASX Oil. But enjoy US Royalty Stocks eg Kimbell , Sabine. Will continue to dollar cost using their monthly returns.

Am confident over next 2 - 3 years Energy commodities will hold their Value ; with cash flow as a bonus.

If a Market Crash (Financial due to US debt servicing) and the majors drop 50 % eg Exxon / Woodside could be a great BUYing opportunity...

Cheers

[mistymountain]

Of interest, for any Investor in Energy, is the Northern Winter thematic. Obviously a short term consideration. But I've been tracking since November.

Currently Russia / Scandinavia having their coldest in decades.

Germany's Munich record snow.

The temperatures in Oslo way below freezing for next fortnight. Think max of - 12 c.

The USA winter lags Europe.

----
Coal Price beginning to rise .

If Gas turns then Oil will follow.

Uranium continuing to Moonshot...

---

Go those Energy Commodities: after all people need Power, Heating and the Lights to stay on.

And even the Big Boys are beginning to Talk Shop. https://www.democracynow.org/2023/12/6/vladimir_putin_at_cop28

Its a pity our Woke Green NZ Government doesn't support the Nuclear thematic...

[Valuegrowth]

I'm continuing to HOLD : HZN . Based on their Cash Flow distributions. Small spec hold in other ASX Oil. But enjoy US Royalty Stocks eg Kimbell , Sabine. Will continue to dollar cost using their monthly returns.

Am confident over next 2 - 3 years Energy commodities will hold their Value ; with cash flow as a bonus.

If a Market Crash (Financial due to US debt servicing) and the majors drop 50 % eg Exxon / Woodside could be a great BUYing opportunity...

Cheers

Thanks smistymountain for your ideas. At some point something big is going to happen as a result of loose monitory policy, rising debt and inflated asset prices. At one point oil sector was hot. Later, Others like vegetable oil and palm oil also followed the trend. COVID-19 situation made situation worst. Sudden shortage led to huge price increase for selected commodities. When I visited supermarkets for weekly groceries I found the trend for all types of vegetable oil. Fortunately, I was in a good commodity position where I was able to make above average capital gain which helped me to recover some losses made in the past as well as some capital for new investment.

[Valuegrowth]

Of interest, for any Investor in Energy, is the Northern Winter thematic. Obviously a short term consideration. But I've been tracking since November.

If Gas turns then Oil will follow.

...
I thought natural gas futures will hold around $3/MMBtu. Now it has dropped below $2.60. Lower gas prices are boon for some industries.

[Valuegrowth]

https://www.newshub.co.nz/home/money/2023/12/kiwis-could-see-drops-in-petrol-prices-this-summer-aa-says.html

Drop in oil prices is a warning sign for other overvalued assets.

[JBmurc]

Of interest, for any Investor in Energy, is the Northern Winter thematic. Obviously a short term consideration. But I've been tracking since November.

Currently Russia / Scandinavia having their coldest in decades.

Germany's Munich record snow.

The temperatures in Oslo way below freezing for next fortnight. Think max of - 12 c.

The USA winter lags Europe.

----
Coal Price beginning to rise .

If Gas turns then Oil will follow.

Uranium continuing to Moonshot...

---

Go those Energy Commodities: after all people need Power, Heating and the Lights to stay on.

And even the Big Boys are beginning to Talk Shop. https://www.democracynow.org/2023/12/6/vladimir_putin_at_cop28

Its a pity our Woke Green NZ Government doesn't support the Nuclear thematic...

I agree and have shifted some funds into a couple of undervalued COAL stocks ..if the Northern Winter stays colder for longer

I think O&G could stay low till early-mid next year...but at some point, the lack of investment over the last many years is going hit hard when the economies demands for the liquid energies rise once again ..

[nztx]

Interesting that Woodside & Santos reported in past week to have had discussions on possible merger
& Santos making noises about review & releasing value within it's camp.

[JBmurc]

Interesting that Woodside & Santos reported in past week to have had discussions on possible merger
& Santos making noises about review & releasing value within it's camp.

Yes looking for a trade in STO hoping for a decent move higher on a merger deal price maybe $8-$9 ..STO has had a history of bidders being turned down ..

[Valuegrowth]

I thought natural gas futures will hold around $3/MMBtu. Now it has dropped below $2.60. Lower gas prices are boon for some industries.
NG tumbled by 10%. Will oil follow next?

[Daytr]

Ended up being a pretty good trade to finish the year. Flipped it at $81.40 to short & now out. Might see short covering into the end of year so may re-establish short in Brent.