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  1. #1
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    Default Oil

    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.
    Hopefully you find my posts helpful, but in no way should they be construed as advice. Make your own decision.

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    FEAR n GREED JBmurc's Avatar
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    Yes reduced my O&G exposure weeks ago ...weakness could continue till next year ..
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

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    Quote Originally Posted by JBmurc View Post
    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

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    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by conventional
    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
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

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    Quote Originally Posted by JBmurc View Post
    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.

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    "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.
    Last edited by Valuegrowth; 07-12-2023 at 08:46 PM.

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    Quote Originally Posted by Valuegrowth View Post
    "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

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    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...putin_at_cop28

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

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    Advanced Member Valuegrowth's Avatar
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    Quote Originally Posted by mistymountain View Post
    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.
    Last edited by Valuegrowth; 08-12-2023 at 06:27 PM.

  10. #10
    Advanced Member Valuegrowth's Avatar
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    Quote Originally Posted by mistymountain View Post
    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.

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