What does that do for RIG? At least that is what the oil analyst for DB says. And he had very valid points. If that scenario comes to pass, RIG goes below $40 at some point IMO. Any thoughts about that??
Obviously, $72 oil would put a hurt on all energy stocks. Pick a name, any name.
A couple of points, he made that projection for 2013, not year end. His projection for US oil use to decline by 50% over 20 years is a little difficult to swallow given a background of even 2% economic and population growth, compounded per annum over 20 years. That's some rough math.
more likely if the market crashes, so does oil. assume europe doesnt fall off a cliff (yet to be seen), and our elections come and pass...the market will go up no matter who is elected (unless there is no deal on the US fiscal cliff). in this case oil will go up. China is still there, consuming every barrel it can at......oh wow 7% growth instead of 8%, and we still have the evil "I" saga (Israel and Iran) playing out and besides Iran's nuclear infrastructure, it will go for its infrastructure in general as well I would think (so more crude disruption) . Saudi talks big, but it cannot produce an over supply for very long. If RIG's ban in BRA holds, then even less oil on the market, and PETROBRA gets hurt too and not much spare capacity with Iran embargo and no real new unassigned ultradeepwater RIGS. And new work in Brazil will charge a much higher rate than now due to their moronic 20 billion USD suit for a few lousy K of surface oil. todays action could predict something is going on (i didnt see any news but didnt look hard either other than oil up a little) either with Brazil ban lift or positive work with the US govt. Everyone knows these are the downsides to this stock. The new builds and current rigs are leased for the long term not 3 months and those that are coming off now are being leased back for higher rates. use your brain, not somre retarded analyst who gets paid as a pumper or dumper for his firm or by hedge funds to move you one way or another.