The stock came off of its 28 lows to move up to 33 in just three sessions and has held 33 for the most part since. I thought feye might retrace some of that huge move up after Wednesday's close but feye looks like it wants to move up again. Unless the overall markets take a breather, Feye may see 40 soon.
Add in the troubles in Liba and oild today is down 2% to lows of the day.
WS has no conviction of a stable oil price. Recent buying of stocks by owners (like JF) and hedge funds hasn't helped.
I thought things would be stable by now but they are not. It may be awhile before pig-headed, greedy stupid arrogance is replaced by common sense OPEC reductions in output. Until than, everyone in oil in anyway other than shorting are going to be stung.
on a much better day for oil prices. Until today, they have been trading in lock-step.
Unless some more step up like they did this morning, daytraders will take the $1 high move away penny-by-penny over the balance of today.
You are missing the message. JF, Hamm, Picken's and more, they all put real money to work on their bets. Hamm's bet is stated in the original post. JF bought 4million shares this month. Picken's also bet on it, just like all the producers. There was no bias at all. They truely believed oil pricing was one direction, up.
I remember everyone on CNBC and Bloomberg saying with conviction that oil would not drop below 70 and 100% of them said that OPEC will announce a cut in production. I took a stake in SDRL before OPEC meeting at 13.80 thinking they were right and the sector was due for a bounce. Ha! Still waiting. Pickens interview this morning was telling. No one seemed to see this coming.
bashed JF on his timing in buying shares of SDRL.
The following story is about Harold Hamm of Continetnal Recources...
"He is so bullish on oil prices that in late October and early November he monetized all his crude price hedges. By unwinding its array of puts and calls that protected it from falling oil prices, Continental received $433 million in cash, but left itself fully exposed to crude swings."
I don't think they will change the current dynamics as most producers aeem to be in a frenzy to produce and sell whatever they can and no one is willing to trust the other producers or change that fact.
They all complain about the low price, but they won't change the supply/demand imbalance. Who knows where it stops?
Most hard commodities/materials are at decade lows and as oil has just joined them. Maybe the world is much slower than what we think it is, or maybe all producers are operating on the same strategy of trying to kill the marginal players.
The only ones failing are the hedge funds who made big bets on these commodities. The prodcuers are still standing and struggling. like shareholders.
The globe is bigger than ever been before in the sense of how much oil will be needed. None of todays factors matter for what happens to demand when the global economies tick up by just a tiny notch, when today's oversupply becomes tomorrows shortages. Any slowing of US supply should be picked up by the SDRL of the world.
All established wells have a vey low cost basis. They can go toe-to-toe with the Saudi's. They may not extend to new areas, but they will produce at low costs on anything established.
on WS believed it would drop below $80, than 75, than 65, than---now they do not think it will stay above 50.
They know as much as we do.
Whenever prices snap, watch out.
And the psyco traders with split personalities trade on each release: One day oil is up on hopes the worst is over and the next day oil is trashed on their comments. like we will never produce another drop of oil again. As you said, I hope their comments will get old soon and moreover, I hope those frickin OPEC ministers wake the hell up and realize that US production is not going away like I think they think it will and so something to stabilize pricing. I think OPEC has lost its mind, certainly their influence, but they haven't figures out the later yet.
Maybe it turns out to be another idiotic call by GS, like their forecast for 200 oil this year?
The brilliance of making ca call after a stock crashes.
I suspect JF would not have bought 4million more shares earlie this month if he thought SDRL was going away?
compared to the pre-market action all week long. Maybe the Glodmann downgrade has no legs, like so many of their calls this year, including their foercast for $200 oil.
I only read the headline on the cut with no explanation. has anyone read their reasons for this call?
The 8 million shares or so that traded in the first hour may have been the capitulation selling that produced the lows for CLF. The next week could confirm this, or she could re-test.
shares traded in the first hour taking CLF to its lows of the day then back up to 6.25 and it held that level for the rest of the day. There were several 10-20k blocks that traded here and there over the day, maybe some short covering, but I suspect most of the volume after the first hour was from bargain hunters.
We all have been wondering what the low was for CLF and I wonder if this was the line in the sand? CLF likely benefited from a great tape and the fact that the other IO producers had a great day. I am still afraid of CLF because of the macro issues for global GDP's, along with the fact that no matter what commodity you want to look at (hard or soft), most are at lows on demand concerns and/or over supply considerations.
With yesterday's downgraded given how well CLF came back and held enticed me. I waited until mid afternoon to take a position because I wanted to be sure this time, as My YTD losses in CLF are huge. I will not go long until I am convinced but it felt good to have a positive trade. It will take me a lifetime of these trades to cover my CLF losses.
I looked at 7 oils tocks this pre-market and they are all up with oi and brent being down. While pre-market does not mean much, these stocks over the past two days look like they are disconnecting from the prices of crude itself, it just needs to last.
Look at a 15 year monthly chart of SDRL. Other than during the 2008/09 recession, where the sever drop in its SP happened over a span of 5 months, SDRL shows a constant asending chart pattern with some normal smaller blips along the way followed by a quick return to growth. Volume over tha last four months was 5 - 8 times normal vol levels of the past 15 years, even harsher than the 08/09 time frame. The drop in SP this time happened over 4 months, with most of it coming from the divi cut.
Given these variables I suspect the worst for SDRl is behind now (unless a global crisis happens). Does anyone really think SDRl is going away? WS already pulled the guts out of this stock (along with all oil stocks that have near identical charts).
SDRL is a victim to what is happening to the entire sector.
Oil will adjust and so will SDRL. It is hard to imagine SDRL falling on fundamentals much below this level.
How long does this move up hold and for how far?
So much damage was done to the sector. Incredible.
Whatever the reasons for why it is happening, the consequences of this are going to be lethal. Commodity prices have been in free-fall for most of 2014 and not showing any signs of reversing.