# Oil Stocks.. Have we Bottomed?



## BrentPv2 (Feb 9, 2015)

Despite Oil dropping again this week, Stocks in the industry have started rising constantly and not responding to oils price. Suncor is up over $3 this last 7 days, on good news, and oil, but so are many others.

Oil surplus is still at the highest levels but gas is now showing "demands", but isn't April usually less demand month?

I kick my self for not stocking up last week, but was sorta expecting/hoping for a April drop.

So do folks think we've bottomed?


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## Fraser19 (Aug 23, 2013)

Don't know. But I seriously doubt there is a lot of room left for it to go lower. Reality is oil has dropped over 50%, most blue chip stocks are already selling for much less than 6 months ago. Hard to not make gains if you were to buy companies like Suncor and hold it for several years.


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## rick (Nov 26, 2013)

I'm no expert when it comes to the price of oil BUT, I do know that if oil stays at 50$ or lower for say, 1 or 2 years, we haven't seen the real drop in the oil stocks yet.
Many would go bust from way too much debt.

If oil did bottom here around 50 and will recover to 60's then 70's in the next few months, oil stocks will do real good.

If you can predict the price of oil, you'll have your answer. Saudi seems to want it lower for a whole lot longer, I'm not betting my few k's against their hoctomegatrizillions.


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## Westerncanada (Nov 11, 2013)

Agree 100% . 

if you believe companies like suncor, cenovus and husky will not recover from these price points regardless of how low hey dip.. that would be a foolish assumption based on history alone.. nevermind fundamentals


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## slinger (Apr 10, 2015)

I don't believe we've seen oil bottom out yet. The world is still oversupplying oil at a rate of 1.5M barrels/day. Reserves are still increasing. If the US signs the nuclear deal with Iran, we could see Iran's oil flow into an already oversupplied world market. This would surely dilute the price even further. OPEC are not cutting production rates so the price remains low and weeds out competitors with higher cost operations (North American fracking) in an attempt to regain market share. We will find out this summer if the nuclear deal is signed between the US and Iran. If so, we will see another large drop in oil prices. Couple this with further oversupplying, we will see new lows. I am holding off for now.


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## MrMatt (Dec 21, 2011)

Don't know. The thing is that there are some companies still profitable, they'll be in great shape when the price recovers, and you can afford to wait.

The ones a few quarters from collapse are the ones to avoid.


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## newfoundlander61 (Feb 6, 2011)

Price of oil seems to be slowly moving up, not sure if the largevoil inventories being talked about in the media are a little over blown.


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## Hawkdog (Oct 26, 2012)

IMO we see 70 bucks by the end of the year. Exploration is grinding to a halt, US shale plays are slowing.

Everything you do requires oil in some form. As the middle class grows in countries like China and India oil demand will grow. Look at car sales in China.

Stocks like Cardinal or Vermillion are still paying juicy dividends, seems holding a few shares might not be a bad thing. 
Cardinal has 30% of its production hedged at 80 bucks a barrel for the rest of the year.


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## Jon_Snow (May 20, 2009)

Sure hope CPG doubters plugged thier noses and bought some in the mid-20's.


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## zylon (Oct 27, 2010)

Anyone buy this story?
It's been my observation that Casey Research is wrong at least as often as it's right.










source: http://www.caseyresearch.com/articles/betting-on-a-quick-oil-recovery-beware-the-fracklog


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## Toronto.gal (Jan 8, 2010)

For the most part, I paid little attention to the various oil price predictions, and instead just focused on the fire-sale prices of stocks, buying/increasing positions from -20% to -74%.


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## Getafix (Dec 29, 2014)

I wish i would've done the same, need to stop being influenced by forums/articles.


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## KaeJS (Sep 28, 2010)

Getafix said:


> I wish i would've done the same, need to stop being influenced by forums/articles.


This is the key to being successful...


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## daddybigbucks (Jan 30, 2011)

T boone says that oil can still go lower but that a bottom is forming. He says to wait still before going all-in.

I take from that this this upbeat is a bit of a bubble so I do have some sell orders in.

"Deciding how much profit to take" is a great problem to have though.


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## BrentPv2 (Feb 9, 2015)

How is it, despite all the over production, Oil still rising?

Looks like I really should of bought in last month, with most Cdn companies up 10+% it looks.


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## yyz (Aug 11, 2013)

Tensions in the middle east right now are helping oil out.
The cures for low oil prices are 
1)low oil prices
2) someone in the middle east sneezing


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## humble_pie (Jun 7, 2009)

daddybigbucks said:


> T boone says that oil can still go lower but that a bottom is forming. He says to wait still before going all-in



why would anyone go all-in? me i respect boone a lot more than jim rogers but still there's a long summer of LOP ahead. Maybe long long year(s) of LOPs.


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## dogcom (May 23, 2009)

Good advice humble pie I wouldn't go all in anything. If you look at gold and silver especially the stocks you would think go all in for sure but that has not been a very good idea at all. I did want to go all in but I knew from past experience years ago to never do that no matter how good something seems. Of course one could hit it right and win the lottery but most often you just lose a lot of money going all in.


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## daddybigbucks (Jan 30, 2011)

actually T boone did use the word "all-in."
but I gathered that to mean all the free cash you have at the moment in your stock accounts.

NOT sell everything you have to put into oil stocks.


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## doctrine (Sep 30, 2011)

There is a divergence between what analysts are saying (oil will go lower and avoid energy) and what is actually happening (oil prices at year highs, oil companies and oil service companies moving higher). Very interesting, indeed.


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## humble_pie (Jun 7, 2009)

dogcom said:


> ... I wouldn't go all in anything



i didn't go *all-in* since i'm not quite sure what that means, but since december/14 i've bought up a storm of canadian energy stocks. Also worked options strategies like mad.

bought XEG 2017 LEAPs calls, bought shares in CPG, ARX, BNK, SNM & GTE, sold puts in ARX & CPG, worked a new version of the continuous short strangle that i maintain perpetually in US CNQ options.

the only new item that hasn't done well in the very short term is the obscure & tiny oil explorer in kurdistan. Presumably the war against ISIL is not helping it.

these days i'm paused in buying energy. Although the runup has been sharp, i wouldn't dream of selling. It's far too early days in the next resource sector boom. Which has perhaps not yet even begun. But eventually it will arrive.


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## AaronJBoxer (Apr 1, 2015)

I think there is still plenty of potential in the market. Both Shell and Tullow's share prices are expected to rise, could be worth a punt?


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## 1980z28 (Mar 4, 2010)

I believe that in the next few months it will go lower,unless there is unrest in the Middle East and Russia

I have personally sold my oil only 95% still hold 5 %

If holding for the long term,,,WCP,CVE,SU still look good for canada


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## zylon (Oct 27, 2010)

*Good luck with the translation*










source: http://armstrongeconomics.com/archives/30105


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## zylon (Oct 27, 2010)

*The danger of higher oil prices too soon*










source:
http://www.otterwoodcapital.com/2015/05/07/the-danger-of-higher-oil-prices-too-soon/


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## StockTrader (Apr 21, 2015)

I think oil wel remain within the current range. Most shale oil rigs break-even at 65$ per barrel, which will ensure that the price doesn't go up that much in the near term.


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## Edgar (Mar 24, 2014)

Have most analysts factored Iran into their predictions? With the nuclear deal being finalized, I'd imagine sanctions will eventually be lifted which could pump in plenty of low-production cost oil into the market. If that happens, I'd imagine we'd see a decrease in oil prices of a dollar or two (assuming it hasn't been factored in).


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## zylon (Oct 27, 2010)

source: (May 14 2015)
http://shortsideoflong.com/


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## sags (May 15, 2010)

There was a recent story on a company that is manufacturing wind turbines without the blades. 

They are cone shaped, and produce no sound or damage to birds or the environment.

My son is scheduled to put security fencing around yet another large solar farm in Ontario in a few months. I believe this will be the 7th solar farm for them.

Green energy is making technology leaps and bounds and will replace oil much sooner than anticipated.

_When a cylindrical structure such as a fireplace, is put in the way of something fluid like the wind, a phenomenon called the Von Karman vortex street occurs. The fluid forms a cylindrical pattern of a swirling spiral motion that hits the structure and makes it swing from side to side. Many towers and chimneys suffered its effects until the physicist Theodore von Karman deciphered the aerodynamic explanation of this event in 1911.

Since then, engineering provides these vortices and prevention methods are available to prevent the robustness of an infrastructure to be compromised. Now the Spanish start-up Vortex Bladeless has decided to shift the approach and exploit this phenomenon to generate wind power. It created Vortex, a wind turbine without blades oscillating from one side to another according to the wind to capture the wind’s kinetic energy.

"*These vortexes are a problem that usually engineers try to avoid at all costs because they cause buildings to fall*," explains co-founder of Vortex Bladeless, David Suriol. The manager explained that his idea is just the opposite: "*We will find the vortexes and optimize them deliberately*".
_

http://www.fondoemprendedores.fundacionrepsol.com/en/up-to-date/news/vortex-windmill-without-blades


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## AltaRed (Jun 8, 2009)

sags said:


> Green energy is making technology leaps and bounds and will replace oil much sooner than anticipated.


It will never replace oil, but will displace at least some oil (which is a good thing). Hard to put wind turbines and solar panels on passenger jets, tractor trailers, naval vessels, tanks and the like. Transportation is by far the largest user of liquid hydrocarbons world wide and it continues to grow. Petrochemicals, pharma, et al will continue to increase demand. However, usage will no doubt continue to shrink in the electrical generation sector, currently only in the order of 10-12% globally.

http://people.hofstra.edu/geotrans/eng/ch8en/conc8en/oecdoil.html


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## mrPPincer (Nov 21, 2011)

I should really look into that report past the first page before commenting, but really?

First sentence first page,



> What is Transport Geography?
> Author: Dr. Jean-Paul Rodrigue
> 1. The Purpose of Transportation
> In an ideal world, transportation would comes at no effort in terms of cost and time and would have unlimited capacity and spatial reach.


^transportation would comes??
looks like a joke paper to me

But it's done by 3 academics, all in montreal, so maybe translation errors could be excused, but scanning further, still looks like a joke paper to me, or (worse) a lame industry lobby paper

That said I'm no academic so wutevah..


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## AltaRed (Jun 8, 2009)

That was the simplest way to show relative uses of liquid hydrocarbons without digging up all sorts of IEA papers, etc, etc. with pie charts, tables, bar graphs and the like. The paper itself is not important. For sure, it is a percentage comparison rather than quotations of whole numbers, but since we do know oil demand has continued to increase over the last 40 years, a percentage comparison (and trend) IS the relevant point for this discussion. Even if the percentages are slightly off, the trend IS correct.. as I saw it evolve over a 40 year career.

Transportation continues to take a bigger slice of oil demand specifically because of growing motor vehicle use in developing countries such as India, China and even Russia, even as it declines in developed countries. Transportation use will continue to increase simply because the expansion of electric vehicles cannot possibly cope with the increasing absolute number of vehicles on roads and in developing countries, electricity is so short in supply, it is more importantly used for uses other than powering vehicles.

It is also fact much of heavy industry has weaned itself off oil since the oil crises of 1973/1974 and 1979/1980 and industry has migrated significantly to natural gas, cogeneration, and in some cases third party electricity. So industrial use has gone down as a percentage of oil use and is likely to shrink a bit more, but there is not much more to go from an industrial perspective. In the case of electrical generation, oil was one of the first things to go...where it was possible to decrease it, simply because of the 1973/1974 and 1979/1980 crises. Granted it is still used in many isolated locations and small countries, e.g. Caribbean as an example. Solar and Wind thus are not going to reduce oil consumption in the electrical sector very much further. Places like Japan depend more and more on LNG rather than oil for electrical generation. What Solar and Wind will do mostly is reduce coal usage in bulk electrical generation. 

Hence the point is valid. Green energy is not going to make much dent in oil consumption. It will make more of a difference in coal consumption. The current environmental lobby has thus been tremendously misguided and will be disappointed.


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## mrPPincer (Nov 21, 2011)

^I agree it probably won't get done (my interpretation of the above) if it doesn't happen at the consumer level.
which is why I find these KoL-type arguments so depressing.. people actually believe we humans are unable to change our path

There is a lot of potential in green energy industry imho, but we need to develop a will to get it done.
Legislation and awareness are a needed part for sure though.

->added These kind of talks only make me want more to retire the car, fully retire, and jump on a bicycle


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## Vicjai (May 15, 2015)

BrentPv2 said:


> Despite Oil dropping again this week, Stocks in the industry have started rising constantly and not responding to oils price. Suncor is up over $3 this last 7 days, on good news, and oil, but so are many others.
> 
> Oil surplus is still at the highest levels but gas is now showing "demands", but isn't April usually less demand month?
> 
> ...


Brent, I don't look at or even try to guess where prices are gonna go. Is oil going to go up or down? Because any direction you guess, you are about 50% correct! =) or 50% incorrect =( Instead of predicting it, a more sensible way is to react to it. I think a lot of people have energy (no pun intended) placed into predicting whats gonna happen and its really a waste of time - because no one knows for sure, unless you have a crystal ball. 

What I do is I have a target price as to when to buy and sell that takes the guess work and worry out of it all. Because I know prices will rise and fall with no one knowing 100% where its gonna go in the future. Using your example, before I even buy Suncor, I would already have set entrance/exit price targets. Say I buy Suncor at $36, i would have a plan of something like 'if it hits $40, i sell half, if it drops to 32, i buy 50% more.' I've been doing this method for a while and its been one of the most effective ways to sleep at night for me (and profitable). 

Hope i make sense :rugby:


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## zylon (Oct 27, 2010)

I'm not as optimistic as these dudes.



> Will energy prices continue to recover back to old highs, or will they dip back to recent lows? This week on the Big Picture, Jim moderates an Energy Roundtable with Robert Rapier, Director of Alternative-Fuels Technology at Advanced Green Innovations LLC, Kurt Wulff CFA, Independent Energy Analyst at McDep LLC, and Dan Steffens, President of Energy Prospectus Group in Houston. They discuss the current trend, what could reverse that trend, and where prices may be heading in the next few years. *The price direction will likely not be smooth or without reversals, but the general consensus of the panel sees a slowly growing demand for oil, and a supply that is slowing.*


http://www.financialsense.com/finan...cture/energy-roundtable-rapier-wulff-steffens


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## daddybigbucks (Jan 30, 2011)

june 5 is the opec meeting.
Can go two ways: Either Opec goes status quo and we are looking at 60-70 oil for rest of the year OR
Opec cuts and we all get a pay day.


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## AltaRed (Jun 8, 2009)

My bet is Saudi will hold course, i.e. not give up market share. But since I have virtually no skin in the resource and associated infrastructure game anyway, I won't be actively watching.


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## daddybigbucks (Jan 30, 2011)

interesting.
I'm betting they will cut because Saudi's want oil at $90-$100 as well.
But I'm also the opposite as you with a lot of disposable cash in the game and I will be actively watching.


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## thepitchedlink (Feb 17, 2014)

Any thoughts on what's going on lately? ECA,COS,CVE all getting close to new lows (52s). I'd love to average down a bit, but wondering if this little slide will keep going for a bit.....thoughts?


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## none (Jan 15, 2013)

Some schools of thought think that b/c china is taking quite a beating that demand for oil will fall even further which will reduce demand on an already over supply.


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## BrentPv2 (Feb 9, 2015)

As well as the Oil Iran has stockpiled and ready to come online, I'm thinking there still is a bit of fall left.


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## westcoast (Jan 28, 2013)

No, we haven't bottomed. With no one willing to reduce production the bottom looks like $15 a barrel.


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