"ARAB Opec producers expected global oil prices to rebound to between $70 (R810) and $80 a barrel by the end of next year as a global economic recovery revived demand, Opec delegates said this week in the first indication of where the group expected oil markets to stabilise in the medium term.
The delegates, some of whom were from core Gulf Opec-producing countries, said they might not see – and some might not even welcome now – a return to $100 any time soon.
Once deemed a “fair” price by many major producers, $100 a barrel crude is encouraging too much new production from high-cost producers outside Opec, some sources say.
But they believe that once the breakneck growth of high-cost producers such as the US shale patch slows and lower prices begin to stimulate demand, oil prices could begin finding a new equilibrium by the end of 2015 – even in the absence of any production cuts by Opec.
“The general thinking is that prices can’t collapse, prices can touch $60 or a bit lower for some months then come back to an acceptable level which is $80 a barrel, but probably after eight months to a year,” one source said.
A separate Gulf Opec source said: “We have to wait and see. We don’t see $100 for next year, unless there is a sudden supply disruption. But (an) average of $70-$80 for next year – yes.”
The comments are among the first to indicate how big producers see oil markets playing out next year, after the current slump that has almost halved prices since June. Global benchmark Brent closed at about $60 a barrel on Monday. Their internal view on the market outlook will provide welcome insight to oil company executives, analysts and traders, who were caught out by what was seen by some as a shift in Saudi policy two months ago and have struggled since then to understand how and when the market would find its feet."
"...A 2012 study by the Department of Justice’s Office of Juvenile Justice and Delinquency Prevention revealed that in 2010 black youths committed six times more murders, three times more rapes, 10 times more robberies and three times more assaults than did their white counterparts. Similar statistics were released by the Federal Bureau of Investigation (FBI) in the “Uniform Crime Reports.” They determined, “In the year 2008, black youths, who make up 16% of the youth population, accounted for 52% of juvenile violent crime arrests, including 58% for homicide and 67% for robbery.” By contrast, the only categories where white youths surpassed blacks were in liquor law violations and driving under the influence. Even black civil rights advocates such as Van Jones, President Barack Obama’s former green jobs czar, confirmed these findings. In his October 5, 2005 article, “Are Blacks a Criminal Race?” Jones wrote, “African American youth represent 32% of all weapons arrests [and] were arrested for aggravated assault at a rate nearly three times that of
I still like keeping the money small, in these "rig" stocks (and spread the bets)...and have cash on the side, if / when there are any dividend cuts to any of the ones I hold...double up....or if their 2015 /2016 revenue numbers get lowered from where they've already been lowered. Only once have I ever picked an exact bottom on a crushed stock. So, I learned to cost avg 'dogs'...generally put in 1/4 of the full bet, just to have em' on the screen, to watch...then I can avg them on % drops...or on news...or divy cuts...( but on the chance that they'll not go down from here...or not cut the divy, well, then I'll just hold the original bet, generally.) But I'd rather do this with many many stocks, in a recession...Right now tho, difficult to find 'value'/contrarian gems, ala 2002/2009....BUT GOOD LUCK TO ALL ...both long and short...gonna take at least 6 months to get a better picture, imo....or more.
The Texas Railroad Commission is definitely seeing a slowdown in activity as the price of crude oil nosedives.
The state agency issued 1,508 original permits to drill compared to 3,046 permits in October. The price of crude oil has fallen more than $50 a barrel since June. Fewer permits will trickle down to the oil fields where companies will likely begin cutting jobs. The Dallas Federal Reserve projects that Texas will lose 125,000 jobs related to the falling price of oil by mid-2015."
I've told my dad to go around the neighborhood (Woods at Deerfield...SA)...and find any wildcatters/drillers living there - low ball em' on their home sales...hahaha...whatever. Like a vulture.
gosh...who's to say...you'd expect 'free markets' to find the correct price...but yeah, you had a lot of trading by banks, etc etc (speculators)....some of that has gone away, with Dodd Frank?...I will say tho, that the cost of getting the "stuff" out of the ground should set the floor on pricing...and the easy oil has been found? And costs rise. So, who knows....but yeah, SAUDIS can pump out oil very cheaply...for quite awhile...I'd say that's where OPEC/SAUDIS still have some 'power'...i.e. to whack oil back down if it gets too high, bringing in shale, sands, etc.....Soooo, I'm sure the SAUDIS desire a price that gives them decent revenues, but not so high as to bring on more production . balancing act...If I had to guess, I'd say $70 WTI / $75 Brent is the price for 2015...and beyond, for a time...But if suppy gets out of hand again, then the Saudis can just "pull the rug out from under the oil market" again...and 'kill' marginal players, in shale, etc
profits?...do we have profits here? hahaha...oh, whatever...Actually tho, with the Saudis etc telling the world over the last month that they will NOT support oil, even if it goes to $40...or even $20...Well, that was basically a GREEN LIGHT to any SHORTS..."Have at it boys...shoot some fish-in-a-barrel...and we'll not disrupt your 'shorting' "...i.e. heck, I'm actually surprised they've not already driven oil to the $40's...heck, it's been a FREE PASS ! So, perhaps $55 WTI is around "fair value"...unless of course, we get a world recession soon...and a lowering of demand...So, heck, I do think $55-60 oil right now will probably do the trick of getting supply / demand back in balance...There are many many projects / future projects around the world that simply cannot / will not drill at these levels...Hence, once you get H1/2015 out of the way...the lag...well, we should see production pulling back or at least growing much less....(so, other than a recession...$55 looks ok here, for WTI, imo)
yeah...the divys are 'iffy' at best, if this drop in oil lasts awhile...plus, you'll have some 'capex' spending reductions...and lower day rates going foreward...for years?...and an abundance of new rigs...yadda yadda yadda...I'd definitely NOT be buying them for the "yields" now (just not safe)...but I'd surely buy em' if they cut the divys / get a big(ger) price drop...(buy)on the expectation that in the future, they'd go back to paying divys...but nothing is 100%
(but, well, if you can get stuff ultra cheap, then it becomes an interesting play on divy reinstitution...future...ala reits back in 2009). Sooo...yeah, I'd like to get the show on the road...cut all the divys on the 'rigs' I own...gidder over with...the final BASH...Then I'll get quite interested.
NOW DON'T GET UPSET...I'm "long", but I do hope they cut it, along with ESV / NE / NBR...I'd like to add to positions, so maybe in H1/2015, if any opt to cut, I'd like to see price drops...and probable overreactions...human stuff....Buy when people get upset ...or angry... or afraid....A nice divy cut always helps to get 'humans' aggravated enough to dump shares...Yeah, iz sorta human...but I tend to do the opposite of what people expect (hmmm)...so, I actually like those experts to go on TV, like Cramer...and 'dump" on stuff, as he did WAG, at 27.70 (he said 29...but he lied...and yeah, now he loves it after rising 150%+...really??? really?...how can you make decent money like dat?...he just a herd follower...play it safe, Cramer))
Yeah,....I'm just gonna be patient....have some dry powder & 4 piddly positions in "rigs"...and I'll either await a bigger drop in oil...or some divy cuts to the ones I own -and buy on any decent dips below where they are (20%)...I keep it small...the 4 'rig' stocks + FCX are sorta like 'spec plays'...only 10% of money in them...I actually would like some divy cuts to come in H1 / 2015 ...I look at 'divy cuts' as an opportunity rather than a 'negative', as I look out 3-5 years for these 'plays'...I do think it's gonna require patience (at lesast a yr?)...There should/could be times to get these cheaper...but if not, I have some money in them. (of course, if/when the next recession does come to the market, there will be even more gems...but right now, I don't see much that catches my eye...I like "cheap"...ala 2002 / 2009 ...so, other than some of these "rigs" that are already in recession territory, I don't see much else...More of a value / contrarian investor.
Of course you are right, Nadine....But...ahhh...look at it this way it's like an editorial page in the newspaper...people expressing all sorts of views...keeps their minds active...Probably a tad better than smoking weed and gazing at the TV 18 hours a day, in Denver?...It's like a lil' contest...and also allows for people to "get things out of their system"...you gotta take it all with a grain of salt...and yeah, there's a lot of ego being thrown around...that's fine...like betting on football games....hahaha...But heck, the world is INSANE anyway, imo, so we all have our lil' fun in here....ahaha...just don't take it seriously...it's all in fun - and nothing that gets posted in here is gonna move markets anyway....might shake some people out of positions, within the board...or vice versa...but quite limited in it's effects....But yes, Nadine...if you try to understand all these posts...you'd go crazy ! so...stay sane...and laugh at times...mostly for entertainment.
Well...ummm...I'd had such big 'up' moves in the rigs I owned that my piddly positions became 'less piddly' and I wanted to keep it 'small'...So, ...well...I did put in some 'sell orders/on the open', over weekend / soze I could sleep...just wanted to reduce the %age of holdings within this sector....So, actually worked out ok...got great sell prices on the open...then they cratered a bit....and glad I dumped SDRL as well, right at the open. Now, don't get any ideas I'm giving up on the sector...ACTUALLY, I HAVE NO IDEA WHERE THESE "THINGS" go in the next 6-12 months...Just like to keep a tad on the board, to follow them...and yeah, the remainder I own now, have drooped...hahaha. At least, it isn't boring....but 90%+ of funds are in preferreds...Primarily RSO-C....decent...goes x divy very soon...around 9.45% yield...29th x date.
Pretty much the way I view my small holdings in about 5 "rig stocks"...If they do cut the dividend...and/or if oil does get into the $40's to cause more panic...then I'd add 'on the fear'...I'd just add small amts to current small positions....But if they don't cut the divys on them, then I just hold on to what I have. (personally, I'd like to see oil drop into the $40's area....and maybe hold until summer...that ought to do the trick, on shale projects...and just let "depletion rates" take their toll on production of existing wells....North Sea oil will get killed too, with their high costs of production...and forget Arctic drilling...need $100 oil, I hear) This may have a long while to play out, so don't get too exicted...save your energy...and have some dry powder, as you say.
If they did ever cut / suspend the divy, then I'd look to add more, on the drop....Not saying they will, but IF,...and then you get the shares ultra cheap(er)...and wait a year or so, to have them reinstitute the divy, in some form...and the stock would bounce back....(and basically, your lower price would magnify any divys going foreward, again...Same thing happened to REITS in 2009...CBL / DDR...and later, they raised the divys back up...If you got those cheap, the divys became a large % yield....just had to be patient)...Also, when NADL / SDRL suspended the dividends, the whole sector plunged that day, so some of that angst is probably priced in...My thought was to wait for $40-45 oil to add to positions - but I'd also look at any divy cuts in some of them, to add...I doubt we'll see those low oil prices...but, never know.
if you'd have told me that oil would plunge this much today, and with huge pops yesterday in the stocks, I'd have bet they'd all be back down again 1-5% ...so, yeah...sorta stunned actually....Only the big boys know what's going on....For me, I just grabbed some stocks weeks ago...spread the bets...then put em' away...Would be best to just follow oil - see where we are in DEC 2015...If oil is back up nicely, then check out the prices...I go into computer to check my preferred stocks...so, I do get to see the 'rigs' prices...but you could go loco sweating things, daily....I'm glad I just have a little money in them...It was just a game for me...to catch knives (was bored) - but actually, I can see them as being potential divy payers in the future, to go with my 'cash flow' preferred stocks.
hmmmmmmmm....yep....get oil lower now...to go higher, later...gotta crush some SHALE...should see an impact by June, on output ...onshore permits drying up...new loans/credit drying up...so, supply will go flat / fall a bit...(love what Russia is going thru....)
Given that we had huge gains in the rigs yesterday...and then had a 'crash' back down in oil prices today...well, the 'rigs' had every reason to pull back.... A LOT. But all the ones I hold were all green today...from RIG up 0.27%...to ESV up 5.24%
That's quite impressive....looks like a decent bottoming for them...yeah, they'll go up-and-down over time...but was sorta amazed today...
And like I said, who'd hold RIG as a short, thru all of 2015, and have to pay the huge dividend...I calculated the break even would be around $15 ...then the shorts begin to make money...That is a lousy bet...imo
I was still looking for around $20...by mid-late January,... assuming oil stays where it is...I think we'll get that 'post tax selling' pop...seen it before in other bashed stocks.
Yeah, that was a good article...So, basically, we'll see that 17% dividend thru 2015...nice "buffer" for any stock downside action...And...ummm...I suppose the shorts had better expect at least a stock price downside of greater than 17% on their 'shorts" (from here)...because they'll have to pay the 17% divys on the short positions...Doesn't seem like a decent bet here, to be short...have a 17% hole to cover...imo