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Apache Corp. Message Board

  • michaelkosanovichkosanovich michaelkosanovichkosanovich Dec 1, 2012 2:37 PM Flag

    CRUDE REALITYS

     

    Hello friends, hope you all had a nice.Thanksgiving. I spent a considerable amount of time in the last few days reading up on oil, shale, worldwide production, and price manipulation of oil prices. Now, i believe i know why APA and other energy companies sold off in November. We are in the beginning of a perfect storm surrounding oil prices. US production is going up enourmously, Russian production scheduled to increase twenty percent in 2013. China, South America, and other countries are in the very early stages of shale extraction. Also, offshore Africkan production going up. Finally, if the pipeline from Canada is approved, which i think it will, the collossal Canadien oil sands from up north will flood supply even more. More supply is coming, that is undeniable. Demand you may ask? US demand going lower and lower every year due to the 30 mpg vehicles. Heck, 40 mpg cars are being produced now. This is not going away.Nat gas vehicles may even appear. These are the reasons the hedge funds and others have been selling APA, along with other energy companies. Finally, regarding price manipulation It is well known that WTI crude is controlled by the Nymex cartel. These are about 200 people that basically set WTI price. They are allowed to have thousands of barrels of oil ordered, yet NO regulation requiring them to take delivery! They simply cancel orders within 30 days to avoid delivery. Remember in 2009? WTI 30 per barrel? Credit lines werestopped for many many things, including oil speculators. So as a side effect, 30 dollar WTI was the only price these crooks could bid up to. Now, with easy money available, you see 89 WTI. Yes, a threefold increase in price from 2009!
    The Obama administration is aware of this. Early this year they looked into this practice of not taking delivery of ordered oil. Nothing, absolutely nothing came out of this. Future regulations may happen with the second term, but who really knows. My best guess is the Nymex cartel were basically warned that if you jack up the prices again you will be required to take delivery of ordered oil.
    Remember 2002? 140 oil? i do. Then president bush famously called the King of Saudi Arabia to ask him to increase production, The president wanted lower oil prices, The kings response should not be forgotten, he replied WE HAVE NOWHERE ELSE TO STACK THE BARRELS OF OIL WAITING TO BE SHIPPED! Yes the Nymex cartel took advantage of the Bush Administrations lack of regulations and oversight. At last my APA, I purchased my shares about 2 and a half years ago. So yes, im in the hole like many of you. I thought oil would only go up, However, sadly, so so many things against that thesis. Any bump into 80 i will sell at a loss. 100 APA is only a long lost fantasy. GOOD LUCK TOO ALL OF YOU BEWARE

    Sentiment: Hold

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    • The state of the oil industry is such that it confirms oil as the #1 fuel as far as the eye can see.
      A surplus of oil indicates that the industry is vital and viable well into the future. Established oil companies of all stripes are operating and making profits and will for a long time. APA has been a laggard, but now it is trading near book value and should rate a hold or better, not a sell.

      Sentiment: Buy

    • Michael, thanks for the assessment. Some factors to add to your observations.
      Japan (#3) and Germany (#4) have committed to eliminated nuclear generating plants. Plus, France (#5) which generates 75% of electric from Nuclear is not far behind, not to mention the whole EU. What will the replacements be based on? Some green, the rest oil & gas.
      Not to mention emerging countries (China, India, Mexico, Brazil, Argentina, Indonesia, Africa, etc) will need additional +300M auto's during the next 10 years!

      Sentiment: Strong Buy

    • The only problem with your thesis, Michael, is that all those new sources of supply require $100/bbl to be economical. Ex. The cost of extracting from the Canadian tar sands is $90/bbl, plus you burn more than a barrel to extract 3, so the supply is overstated. The cost of compliance for offshore drilling after The Horizon debacle continues to escalate. As far as fracking goes, the environmental jury is still out on that one, but even so, it ain't cheap. On the demand side, with virtually the entire planet in a global depression for the last 5-6 years, demand has only fallen marginally. What do you think will happen when the economies of the world do recover? China alone, is projected to add 125 million cars over the next 5 years, which is equal to half of the entire United States fleet.

      The energy industry is the mother of all cyclical industries. When it's on the downswing, it looks hopeless, when it's on the upswing, it's a Kingmaker.

      APA will double in the not too distant future. Probably within 3 years or less.

      Sentiment: Strong Buy

    • blah blah blah....another one for michael ! up on high volume today Michael how do you explain this? What is going on here? Fuel efficient cars are hitting the road every day? OMG...

      Sentiment: Strong Buy

    • Arthur Berman, who is the Nouriel Roubini of the oil patch, claims shale gas is building to a bubble that will pop and litter the landscape with several large players.

    • thanks for insight. I may sell too,. been getting pounded. I never thought we would touch $70's but now I am concerned that $60's are even closer.

 
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