muscle means the industry is going to drive supplier profits to nil. look for SLCA to try and gain market share but give up almost all of margins. Drive less efficient guys from the game. its OPEC all over again. May emerge 6-8 quarters from now with 80% market share in an expanding market. worth the effort, but not worth holding the stock thru the valley. Pick it up below 10.
its a 2003 Acura. I don't really care about SLCA, so you can go pound sand for all i care. Im interested in when tracking activity drops off the charts so that tight oil production starts to decline. And the Acura gets really poor milage, ( although prob better than the Peoples Car you drive) so i really care about oil prices.
every story needs a villain. N16, is not the true one. We should be looking at the institutional investors who sold out during the rout. No Nads, have they.
current margin for even unadvantaged crude vs. Brent is $12/bbl as of this morning. Then and the advantage on top of a good ( great where i live) crack margin, and we have the golden age again.
so, what nit wit is selling today?? the distribution coverage is fine now, trending better, and there is a 10% yield carrot. I think low 30s is the right place for this to land next month.
maybe a cross between strong and strange?
more important. just did the Q2 2015 strip for USGC crack spread. Its about 30$/bbl. add in sour crude discounts, and light crude discounts, and we are talking some real good margins. Plus demand is up 5% from last year.
correct. no institutional support. nobody wants to tell their boss that they were wrong to dump it. Its going to take a grass roots movement of little guys. I'm doing my part.
this is last of the small divvy. they are so going to raise it next quarter. cash is pouring in at these margins. faster than they can spend it.
lots of good info here, but still failing to highlight the key point. Not only is CBI not levered to oil price, nor to oil drilling, nor land based exploration; rather it IS levered to the price of North America Natural Gas, and NG Liquids. Specifically to the relative price of North Amer nat gas vs. world energy prices. That is the driver that spurs clients to do LNG, and big scale petrochem, pipelines, Gogen Power, and gas plants. It is also reliant on low interest rates to provide funding for large multiyear projects. All of those factors remain in place for now, so no change in award momentum, and no cancelled projects. If anything the slowdown in Fracland may improve the availability of craft labor, and reduce some labor costs on jobs already priced.
we are up 25% in past 30 days. that should dispel the doubts about how this story ends. A short program cannot survive that kind of momentum.
its not just the spread. The crack margin on the forward curve is as high as i can remember. diesel and mogas at $82/bbl, Crude at $51/bbl minus discounts.
gas to liquids and , ( worse) coal to liquids are the ultimate high cost energy products. No reason to think that SSL will come out well until oil goes back into shortage. Don't expect any licensing wins either for the Syn technology suite. They have a good project in progress for USGC petrochem, but its years and billions away from completion.
the pull back from the fast run up sounds right. But anybody with volume on the West Coast should be getting special attention. Mogas sales in Ca are 1 MM Bbl/day. Prices are $40/bbl above US avg. Thats $40MM./ day of added margin. PSX should get at least 10% of that.
VLO weekly spread sheet shows my point. not only has WTI/Brent expanded, but discounts for marker heavy Crudes vs. WTI have widened significantly. Gas and Diesel Crack spreads are at top of cycle highs, and Mogas crack is expanding at about $5/bbl each of last several weeks. West Coast Gas Crack is above $30, and the price on the street keeps moving higher with Torrance KOd.
VLO spread sheet shows crack margins rising to top of cycle levels. West Coast Gas crack( Brent) above $30, with impressive heavy crude discounts as well. WTI discount widening as well, so a triple bonus. Expect lots of Q1 earnings estimate increases going into the end of what should be price madness as we end March.
learn not to trust the one day price action on heavy volume days. These stocks will eventually follow fundamentals, and high volume means some stupid computer thinks it spotted something, that is likely transitory.
VLO spreadsheet shows expanding crack spreads, increasing heavy crude discounts, and widening WTI/ Brent spread. Triple whammy. Look for earnings estimates to rise quickly by end of March, and expect we could see better than Q1 2014 earnings results.
the us rig count means little as this is world wide supply demand balance issue. unlike Nat Gas where the market is geographically limited to NAmerica. Supply from other producing areas will drop as well. eventually.
US production doesn't have to fall to fix the price problem. it just has to decline to less than the growth in world oil demand . so less than say 0.5 MM B/D per year. We are almost there, and depletion will take us there in months not weeks.