One further note, VLO will be just fine and weather this "thing" either way.
Good management can do that sort of thing. :-)
Two reasons actually; 1.) it's better for "stability" for oil and our equities market and the world's markets (also). and 2.) see below:
Since OPEC no longer seems to be a cartel, why shouldn't we have a voice in "energy policy"? (Our own and "other places" as well.)
Should we just stand back and let the Russians and Iranians say it and do-it all for us?
I don't think that you have to be an expert or analyst or even an energy investor to see how that would turn out for America.
If Putin runs his energy policy like he runs his air force, they will be buzzing and mock-strafing our oil interests.
An unapologetic American-ski
(Let's let these Shale guys get back to work!) :-)
US shale may drive oil prices after Doha disaster
Patti Domm,CNBC 6 hours ago
U.S. shale drillers created the world's oil glut, and now they could be the biggest force in ending it.
With the failure of OPEC and other major oil-producing nations to reach a deal to cap output, focus shifts to the U.S. industry's role as a relatively new "swing producer."
"The U.S. has always been a factor. ... It will remain the biggest factor in the rebalancing of the market," said Edward Morse, global head of commodities research at Citigroup. "The U.S. is going to make a disproportional contribution to the market's rebalancing."
Morse said he expects 1.3 million barrels of non-OPEC production to come offline this year, and 600,000 barrels will be from the United States. The U.S. was the biggest force behind the world's oil glut, with the upstart shale industry helping to boost U.S. production by more than 4 million barrels over five years.
The drop in crude prices is hurting oil-producing nations which have been forced to cut budgets amid the sharp drop in revenues. Oil workers in Kuwait this weekend went on strike due to wage and benefit cuts resulting from the decline in prices.
Well, Alex, I think that it has been demonstrated since January (and before that) that lower oil prices are having an impact on not ONLY VLO but on our entire US equities markets.
I don't think that we are completely de-coupled from the effects of the oil market and trading, whether or not anyone is baffled by the effects or not.
Call it whatever you like, VLO seems to get treated like the baby in the unloved oil-bathwater. Personally, I think (and have for some time) that it is about oil speculators playing refiners right along with crude companies, like there isn't any distinguishing them.
And just for the record, I don't think that VLO stopped refining operations at either $30 per barrel crude or $120 per barrel crude. I understand the effect on margins and the like, but if VLO found a way to be profitable at $120 per barrel, then certainly I think that they will be profitable at $45 per barrel.
In the present oil market conditions (those going back far beyond January 2016) those that trade energy tend to treat refiners (including this one) in a certain manner; and that manner seems to be to lump refiners (including this one) in with the overall oil market.
I didn't say that I agree with it, or think that it's a fair thing to do. But, I am aware of the patterns of what has been happening for a long time and I try to plan accordingly to trade around it.
With VLO specifically, they will be fine (over the long haul). I am sure of that.
They are a smart and sharp company, running their business right (and that is "core").
Well, thankfully, it isn't that much worse. It's rebounding decently.
The market didn't go into a selling frenzy, although oil is down about 5%.
I think that the market is learning that when it comes to the Saudis, give them less than face value anymore.
Looks like they are setting up for trouble tomorrow morning. Put on your helmets and strap in.
But instead of a quick approval of a production freeze, the meeting of 18 oil-producing nations saw hours of debate and resembled the dysfunction of an unsuccessful meeting of the Organization of the Petroleum Exporting Countries in December that sent oil prices tumbling.
The fact that producers couldn't agree to a freeze, let alone a production cut, likely means oil prices will drop again as markets open Monday.
"Prices will trade lower. Maybe sharply lower," said Robert Yawger, director of energy futures at Mizuho Securities USA, noting the failure to reach agreement in Doha.
He noted that other factors were negatively impacting prices: U.S. crude oil storage remaining at all -time highs, Iran increasing production, and Libya looming on the horizon to boost output.
Speaking to journalists after the summit, Mohammed bin Saleh al-Sada, Qatar's energy and industry minister, tried to say the lack of a decision showed officials believed "the fundamentals of the market are generally improving."
However, he largely dodged the questions about whether another special summit will be called before OPEC's next meeting in June and whether Iran had anything to do with the breakdown of the talks.
My expectation is Monday morning energy market high-jinx as an outcome of this meeting.
Something which kind of grates on me about this OPEC business (since OPEC pretty much no long exists), is that instead of having the Saudis control / impact America's energy situation, it could be more like Putin and the Russians and Iran doing so. That would be a worse devil right there.
It's ridiculous; isn't it?
I used to follow Zacks when they would actually give a 6 month price target that was somewhat credible.
Nowadays, when you download one of their reports on any stock, they ALWAYS have a #3 rank (hold) on the report for the stock. It's kind of like "no rating" when every rating they give is the same.
You know how it goes with VLO, It's April / May. It's that time of year (boom, pow and down goes the stock).
We have to go through "this" (bad times now) to get to "that" in the late Summer (better times).
Hang in there and collect the divi. :-)
Wow, it actually began in less than a month from my above post.
No news, (except maybe the inventory report, but that is just a bs excuse), no real reason for today's drubbing.
I would say that the run is over until mid-June, friends.
Same game as last year, same set-up. Con everyone with the rosy recommendations and then let the hammer fly. Pathetic. They get away with it year after (a-cursed) year.
They got started 5 days later than they did last year, but this most likely isn't over yet.
My guess is a re-visit to $56.
For those not in yet, don't rush; VLO probably won't pull out from this until mid-June.
So far, it seems to be going right along by the hedgies and big banks playbooks.
Hang in there folks and don't listen to "idp".
saying that, "we like this...." and "we like that...."
"Danger Will Robinson". DON"T believe it don't buy it now.
They did the SAME THING last year about this time (all the reasons why Goldbrick Vampires LOVED VLO), and then VLO started tanking like made in the beginning of April.
April is only a couple of weeks away. Just watch what happens to VLO in April and May.
The CNBC trick is like a bad nightmare designed to trap shareholders.
Just before earnings they will pump it, "how great the earnings will be...", Zacks will probably put out several of their pump traps as well.
Even if the earnings reports shine like the Sun, let it all crater through April, May and early June and THEN look for an opportunity to get back in.
I just traded a small load yesterday looking to test the waters and see if VLO was as strong as the recent run up that it has been on, and, well, it wasn't. I got lucky and got out by the skin of my teeth (thankfully).
I had hopes that a run to $68 might still be in the cards in the last sands of March, but nope.
Today doesn't look too good and I now see that CNBC is starting with their early April Fools games.
Be careful friends, good luck and all of that, I come back around to take another look at VLO in early-to-mid June. :-)
That is actually a headline on Yahoo World News.
Buckle your seat belts kiddies, the Lord only knows where the world will land as a result of this.
This can ONLY be good for oil (although bad for humanity).
Saudi Arabia Goes to War
The National Interest 13 hours ago
Well, the %-age of short interest is still kind of high.
According to my brokers site, it is 30%+. That is kind of sizeable.
Just something to keep in mind. I'm not short, nor do I sympathize with them or for them.
But things can change in either direction between Friday and Monday morning.
Yep. So was I (one day off); "A day late and a dollar short", as my Mother used to say (God rest her soul).
Oh, well. I'm a big boy, I can take it. I got my capital back fully, that is what I was concerned about at the time. ;-)
Looks like RIG has closed the $8.60 gap that was open. There is still another gap up higher ($9.90 or so). No telling if she keeps going to close that or if it sees retracement first.
But RIG is doing nicely today. :-)
I thought that Saudi oil minister coming to Texas (CERA Conference) was pretty damned nervy. That "B" had some pretty big stones to show up and tell everyone, "cut your costs or just go out of busniess." And then later on he tells the conference members that his country isn't at war with the American shale industry and that they welcome even the shale industry in future oil markets.
It's blatantly obvious who they are executing their strategy to weaken.
Saudi Arabia doesn't want oil prices at or under $30. One of their representatives made a statement back in January that it was "irrational" at that range. Their strategy works best between $33 and $35. Prices not so high that the shale players can start back up, but not too low or lower than they want it.
The "rub" is in there. All the Saudis can do is "tap on" or "tap off". That is all they can really do.
The oil speculators (that control prices) though can inflict the damage on the Saudis.
Keep the prices too low for the Saudis and they feel the pain too.
Other world events (war entanglements) may make it hard for the Saudis to keep the oil spigots open and achieve their policy. If anything major happens that force the Saudis to turn off their spigots, then their game plan is done and the shale industry survives. And I think those events are a very real possibility, especially when the Saudis are speaking and acting like they want to engage their chief rival, Iran.
As the other poster stated, "time will tell".
The American shale industry has already been more resilient than the Saudis anticipated, so there is some hope there.
Well, yeah. That is the way it's trading, I guess(lately, and maybe for awhile now).
I hadn't realized that was how it was going with RIG. I really hadn't watched it trade a whole lot before jumping in.
I checked a couple of sources which indicated that RIG is oversold (but not extremely oversold), and the earnings weren't a disaster, they were actually pretty positive. So I figured that she might have some vigor to close a small, fairly low (60-ish cents?) gap. No such luck.
I went back to recheck the short percentage on RIG at my brokers site.
They are indicating 32.4% shares short (after 4PM EST), so that would be a big measure of why this thing can't even cover a small gap. The short ^&*9*&&& have this thing nailed down SO tight.
If all of the oil mess cleared up (like they keep promising) and enough time goes by for the oil majors to put their plans back in order, RIG will probably be just fine and be able to get back to a normal run of business and stock growth.
But look who is involved in holding this stock down alone, Citi-poop and Credit - Floozy. They're on the shady side of things no-doubt and just like the actual oil trade, they are making far to much payola shorting the heck out of oil and any stocks like this. What are their price targets for RIG? Like $5 and $2?
That for a company that makes these big, giant, drillng platforms? Outrageous.
It's like the shipping companies. Crazy.
But, until things change with all of that, this puppy will be held down like cement, mafia-suitcase.
I was in RIG today for a trade, up until about 2/3 of the day.
There is an open, upward gap around $8.50 - $8.60; I bought this morning thinking that would be safe enough to see a gap-fill (based on the earnings beat). When it didn't happen, I decide that getting my money back was more important than getting stuck (for, possibly, months).
I got back out with effectively no gain; but I didn't lose anything other than my time and I got my capital back.
There is another open gap up between $9.90 and $10.20; but if it won't fill the $8.60 gap, then how is it ever going to get higher?
The short interest is still pretty high as well (20 or 30% on my brokers site). Meaning that you have too many %^$& shorts camped out here for RIG to go anywhere but where they want to steamroll it.
There are also at least 2 banks that are restating price targets lower than where RIG is now ($5 and $2 , I think?).
RIG might be like XOM; they may be set with enough money to weather the storm; but that storm has to come to some sort of end before RIG's money-paying clients come back and sign platform contracts.
Many interesting thoughts; I don't really know about all of them though.
For instance, you are the ONLY one which I have heard (or read) that is talking about a "major oil shortage".
But, whatever, this is (afterall) electronic flypaper and it's solely meant for the purpose of getting ideas out there and what-not. I think you've done that, at least. Please, take no offense.
Plainly and simply, the Saudis cannot get into a shooting war (with anyone) with the oil spigots wide open and the price of oil where it is. It won't even pay for 15 minutes of ANY war.
They have literally pushed themselves into a position in Syria (solely because of Iran).
They have some monkey-business going on in Yemen that has already seen missiles being traded.
Again, because of Iran.
They are in a winner take all price war with American shale oil. They no longer have a working cartel (OPEC); it does exist, but they really aren't in complete control of it like they used to be. Fine.
That is some of their problems.
BUT, if they turn off the spigots tomorrow morning at 9AM EST, that doesn't mean that RIG will be 100% in recovery the day after.
RIG needs the oil majors to turn their "project books" back on and get back to renting or leasing the big platforms that RIG supplies. That won't happen for awhile longer, I suspect.
The big companies that utilize RIG's platforms and operations need to get back to a point where they "see" a bottom to all of this mess and a way forward to "getting back to business of E&P".
That might take a while. Hang in there. GLTY.
Well, it looks like you got the $60 price which you were looking for previously.
Was that still a win for you? (If yes) Then it couldn't have been that bad of a day.
The inventory report seemed to have gone well for gasoline. That "surplus and demand" business seems to get cleared up and straightened pretty quickly.
Hope you made some Cha' ching today, there Jet. :-)
Why just go to the grocery market in some little car, when you can go there in your giant Cadillac Escalade or your massive Hummer? Or a little girl's birthday party in our fancy off-road SUV?
Because, "more", that's why.
We've been sold "more" and we want "more". Absolutely.
Really, who DOESN'T want "more". We all visit it somewhere, on some level.
It's definitely an American "thing"; but it's also a "Human-thing", because people immigrate here and they adapt to that ideal VERY quickly. (I've got in-laws that I could tell you about for HOURS. But I won't).
The only one I can think of that didn't want "more" was Henry David Thoreau. All he got out of it was his name attached to some pond and maybe a couple of books that almost no one reads anymore.
It kind of reminds me of the Jib-Jab skit "This Land" (lampooning Kerry and Bush).
In one scene, a single native indian declares, "This land was MY land" (in front of a western background). And then 1 scene later all of the big-box stores and oil company logos crowd in and declare (in unison), "But now it's OUR land !!"
We've been sold "more"
And when the cost is even lower, we want "still more". It's "natural", I guess?
Fill 'er up and go baby!
(BTW, I love the part in that skit where Hillary walks in and slaps Bill, and Bill asks, "What'd I do???")
There is some proof behind what I had read on the internet being true.
That being that, it will be us (Americans) bailing the world out of the oil mess. And it will most likely with headlines showing exactly what you are showing above. Drive, road-trip, nomads, whatever you want to call it. Cars, boats, ATVs, ski-doos, lawnmowers............you pick it, we will drive it or use it. That glut will be gone soon enough.
Some guy named Yergin (David, I think) was on CNBC today (I saw it via PC), he was saying that he expects the oil market to be balanced in late 2016 to early 2017 (supply and demand curves, I guess).
Only WE are going to ride to our rescue.............so fill 'er up and go! ;-)
Thanks Fan. :-)
My expectation is that the tide is going to roll back towards $53 here. Don't freak out.
It doesn't mean that VLO will get there.
There is support at $54.84, single, strength 5, +/- 0.82.
That support is good down to $54.02.
Also, whatever is at $53 has held, even at the height of the turd storms of January and earlier this month.
IF VLO gets below $54.02, I doubt (seriously) that it will get below $53 without some serious bad-news aid.
I would expect that this is part of the bottoming process.
Stiff upper lip and all of that traditional rubbish. :-)