He was going to lead a protest Sunday. I think he was killed 20 minutes before market close.
Putin will investigate ... took the investigation under his control.
This year the Gulf will be producing more, and wells added. The new drilling techniques are being applied in the Gulf. These are wells that will produce for 10+ years.
Lots of things changing, and it is hard for people to discern what is real, and what is a head fake.
If you take eps last year and knock it down to $5/shr. due to labor costs, and assume Brent goes to $80 (not saying it will), then the fuel savings should be another $3/shr. So, that is $8/shr. if Brent is at $80 for the full year, which it won't be. In 2016 it could be at $80 for the full year, but by that time synergies plus normal demand should kick in and that makes up for the labor costs knock off in 2015. So, $8+ with trading between a 5 and 8.5 PE.
ae ... Brent doesn't come here, but we import products made with Brent, and our refineries just sell their products at the same price as the products imported because they can. It's been going on for years.
So, as long as the WTI-Brent relationship holds, lower WTI doesn't translate to lower product prices, but translates to higher refinery prices for products even if they use the lower cost WTI.
This is like watching paint dry ... The CFTC put the position limit and aggregation proposal out for public comment again ... 4th+ time in a year. And this has been going on for over 5 years. Essentially, it will limit positions (aggregated across entities with ownership control) for 28 agricultural, energy and metal commodities. The comment period closes on March 28th. The CFTC needs to do this without watering the proposal down ... they've watered it down some already.
There is huge pushback from some industries and those that like their derivative swaps and don't want transparency, or if transparent, not to be accused of manipulative positions. Shortly after the Commodity Modernization Act of 2000, which deregulated derivatives, and the few years it took to come up with creative derivative products ... you know, commodities and other areas of the financial world have been screwed up. We've all been fed cool aid ... yup, supply and demand. Well, commodities look to futures for determining price ... not necessarily supply and demand. Since the early-mid 2000 commodity derivative swaps with no position limits gave the futures market something to "key off of" for price discovery, and subsequently the futures market provided price discovery for the commodities ... how accurate was our futures market?
Don't get me wrong, speculation is necessary, but just as there can be too little speculation, there can be too much. The CFTC has already come out and said they feel there was 20-25% manipulation (whisper number higher) with oil at $70 and that was a number of years ago when the dollar was weak ... that's in the Federal Register.
The CFTC needs to do what is right. Inaccurate prices in an economy leads to a misallocation of resources ... and an economy that is less than it could be.
// ... please go to EIA site, they show daily WTI, Brent, Jet Fuel, heating oil. //
unc it was your "project" (showing the price comparisons) ... I was just saying if you used Brent it might give a better relationship ... but there is that lag. Anyway, was just commenting because you posted it and thought it was something you were interested in.
unc ... since jet fuel is priced off of Brent ... how does the comparison work with Brent? And then it would have to be jet fuel from Brent with the production lag ... (still probably is goofy)
unc ... if the only part of delivered jet fuel that changes is the oil component ... every $10 change in Brent is about 25 cent per gallon.
cav ... understand what you're saying. Re: Helane Becker, it looks like she is assuming revenue pressures because of lower oil, but assumes too that oil will rise. We'll see how that plays out.
cav ... It seems you are double adjusting for risk. One for potential lower earnings due to oil going back up, and again using a lower PE. Anyway, take what you think will be an after tax earnings and use a 12-13 PE (or an 8.5 pre-tax PE). Anyway, it seems there is a double risk adjustment.
Let's assume they make only $5/share with oil at $100. Oil at $80 is a 50 cent savings from $3.00 jet fuel, or 50 cents times 4.4 billion gallons. That puts eps between $8 and $9/share not counting potential synergies. Using an 8.5 PE is reasonable for figuring price target.
If you assume oil is going back to $100 (difficult with currencies the way they are), and there are some synergies, the stock is fairly valued in this area.
// Were just betting on oil prices going down? //
I would think it is more like betting oil will stay below $70-80, and/or synergies come in as expected.
You have to wonder about the market. Why leave a gap, if it has to go back and fill it? It's like leaving something at home realizing you'll have to turn around and go back and get it.
dmspilot ... thanks for looking it up ... saved me the "bulk" of the work.
Re: the use of the word bulk from Kirby, it's difficult to parse in relation to Kerr's answer in the Q&A without another question. I think that 25% could be a lot, if I'm thinking about it right. The cost synergies, I believe, were net of labor costs. So, that plus 50% in later years could be considered the bulk. But is the other revenue 50% already "had" or coming in 2015 (his "bulk" comment)? If the latter, that is more bulk. Anyway, thanks.
// ...I don't recall them giving a % number. //
Ok ... now you have me questioning it ... listened to too many of them. I'll go back and listen to it again ... but maybe this weekend. Pretty sure they gave the % for the cost portion.