Author Topic: Energy Sector  (Read 51999 times)

Stuart D

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Re: Energy Sector
« Reply #140 on: March 28, 2020, 05:44:23 PM »
Is OXY a good buy here?

I would avoid it.  Anything in hydrocarbon exploration and drilling is going to get fucked.

Might be worth looking at the bonds ranking ahead of BRK’s $10b preferred stock. From memory I think the debt maturing 2022 was selling for 60c.


sleepydragon

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Re: Energy Sector
« Reply #141 on: March 29, 2020, 06:16:06 AM »
Is OXY a good buy here?

I would avoid it.  Anything in hydrocarbon exploration and drilling is going to get fucked.

But over longer term this price is not sustainable. Saudi and Russia will have to work out something so everyone can win. If OXY issue more equity, they might be able to survive. Or now Icahn is on the board, they may sell it to a bigger company— maybe Berkshire?

I am a newbie in this. Not much insights.
I bought some OXY but it’s not a big conviction holding.

Might be worth looking at the bonds ranking ahead of BRK’s $10b preferred stock. From memory I think the debt maturing 2022 was selling for 60c.

SharperDingaan

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Re: Energy Sector
« Reply #142 on: March 29, 2020, 06:42:14 AM »
For those who know squat. TTEN on the TSX
If you think you can do better than this basket, for the same risk, then good on you.

SD
« Last Edit: March 29, 2020, 07:55:22 AM by SharperDingaan »

opihiman2

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Re: Energy Sector
« Reply #143 on: March 29, 2020, 01:09:49 PM »
https://www.youtube.com/watch?v=DSBl70-3euY

Also, Canadian crude is now cheaper than a fucking pint of beer.  Why the fuck would you go long on Canadian oil?  I wouldn't start making bets on energy / oil until we see some kind of direction from OPEC+.  Anything else is just pure gambling at this point. 

I would advise any newbies on here to read the insanely STUPID Sandridge Energy and CHK threads on this forum.  You pretty much could have bypassed the idiocy with one simple question: If these companies can't make money near $100 oil, how the hell are they going to make money at $50 and less?  It was a stupidly long discussion and a big waste of time.  Even Goldman was calling for $200 oil back then.  Fucking retarded.

montizzle

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Re: Energy Sector
« Reply #144 on: March 29, 2020, 10:01:36 PM »
i am not sure if that has been stated before, but i mention it anyways. Russia's oil industry has a ruble-based cost structure whereas Saudi's oil industry has a riyal-pegged-to-USD cost structure.

What it means is that as the barrel drops in USD, the commodity-based currency ruble plunges and so does Russia's cost base, whereas for the Kingdom, they get fully crushed on their margin, because their production cost are all effectively USD. All this to say that Moscow has a built-in damper that helps it a bit when the barrel drops. Inversely as barrel shots up, ruble may appreciates too much and that would cap their gain as well.


If I follow this right, would it be fair to say Canada is in a similar position as russia, where CAD tanks with the price of oil lowering the cost base of oil sands players?

ratiman

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Re: Energy Sector
« Reply #145 on: March 29, 2020, 11:39:37 PM »
Something like 5% of global production will be permanently shut-in and oil declines by 5%+ per year so there are some serious shortages ahead, plus there haven't been any big fields discovered in a long time. Canada with it's non-shale production should be in a good position to provide that supply if it can manage to survive. I know that sounds stupid after a six year bear market in oil but it's not going to last forever.

opihiman2

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Re: Energy Sector
« Reply #146 on: April 01, 2020, 08:27:14 AM »
I believe this:

https://www.rigzone.com/news/april_to_be_one_of_toughest_months_in_oil_history-01-apr-2020-161597-article/?utm_source=SOCIAL&utm_medium=REDDIT&utm_campaign=ANDREAS

Even if Russia and SA cut production massively, oil is going to be oversupplied by the coronavirus.  Estimates are something like by 85% due to demand drop. 

Also, we're seeing the beginnings of the bankruptcies:

https://www.marketwatch.com/story/whiting-petroleum-files-for-bankruptcy-has-enough-liquidity-to-keep-operating-its-business-2020-04-01

Physical crude is already below $10.  It's just a matter of time before WTI / Brent prices reflect reality.  Damn, never thought I would ever see single digit crude again in my lifetime.  Saw it during the Gulf War, and now this.  Holy shit.  Life is nuts.

BG2008

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Re: Energy Sector
« Reply #147 on: April 01, 2020, 08:52:36 AM »
Something like 5% of global production will be permanently shut-in and oil declines by 5%+ per year so there are some serious shortages ahead, plus there haven't been any big fields discovered in a long time. Canada with it's non-shale production should be in a good position to provide that supply if it can manage to survive. I know that sounds stupid after a six year bear market in oil but it's not going to last forever.

Everytime I think oil is cheap, it finds a way to impress me on the downside. 

SharperDingaan

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Re: Energy Sector
« Reply #148 on: April 01, 2020, 09:09:12 AM »
I believe this:

https://www.rigzone.com/news/april_to_be_one_of_toughest_months_in_oil_history-01-apr-2020-161597-article/?utm_source=SOCIAL&utm_medium=REDDIT&utm_campaign=ANDREAS

Even if Russia and SA cut production massively, oil is going to be oversupplied by the coronavirus.  Estimates are something like by 85% due to demand drop. 

Also, we're seeing the beginnings of the bankruptcies:

https://www.marketwatch.com/story/whiting-petroleum-files-for-bankruptcy-has-enough-liquidity-to-keep-operating-its-business-2020-04-01

Physical crude is already below $10.  It's just a matter of time before WTI / Brent prices reflect reality.  Damn, never thought I would ever see single digit crude again in my lifetime.  Saw it during the Gulf War, and now this.  Holy shit.  Life is nuts.

The US, Canada, and Mexico make up roughly 24% of global oil consumption. The EU is another 15%.
Net the two regions together, and they are largely self-sufficient in the supply of oil/gas.

Most folks expect the emergence of a tariff wall around these regions within the next few months. Most likely a NA tariff first at around USD 62 WTI. EU to join later at a pegged Brent-WTI spread. We end up with a cartel of supply (Opec+), plus a cartel of demand (The West). Game changer.

We live in interesting times.

SD

 

james22

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Re: Energy Sector
« Reply #149 on: April 01, 2020, 09:53:34 AM »
Most folks expect the emergence of a tariff wall around these regions within the next few months. Most likely a NA tariff first at around USD 62 WTI. EU to join later at a pegged Brent-WTI spread. We end up with a cartel of supply (Opec+), plus a cartel of demand (The West). Game changer.

Would you buy in anticipation of such a tariff, SD?
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