Wednesday, October 04, 2006

Where is the crude headed???

With oil trading at 58$ it might be a good time to wonder when will it be a good idea to make the leap of faith into oil stocks.

I'm posting this to get opinion on how to judge when the oil/gas sector will be a good buy???

go ahead and blog this!

posted by guycharles at 10/04/2006 10:18:00 AM

7 Comments:

  • Two weeks ago we suggested mid-50's:
    http://stockmarketbeat.com/blog1/2006/09/21/oil-vs-dow-does-2006-rhyme-with-1987/

    By Anonymous Trent, at 2:02 PM, October 04, 2006  

  • crude is headed lower my friend

    By Anonymous Anonymous, at 2:46 AM, November 01, 2006  

  • Some predict crude will go as low as $35 in 2008...depends on world wide demand particularly in emerging markets, and how much oil comes online from current exploration projects, plus OPEC's decisions regarding quota's, future Iran tensions, instability in Nigeria, etc.

    Remember, oil driller's are much more cyclical than conglomerates...I know Buffet made a big investment in Conoco Phillips (COP) because of its historically low p/e...I'd say any company with some sort of internal hedging would be a good bet right now, timing the price of oil is way too hard

    Apache, for example, hedges with future contracts...their cost of production is only around $15 a barrel, they've been raking in cash with oil in the 60's, and buying future's contracts with their cash position.

    Other companies I like are involved in exploration and shipping...even with lower prices, many companies are back logged for years out and can charge premium rates. HOS has 40% operating margins right now as a result of record day rates for its supply vessels...earnings tripled on a YOY basis...yet the stock is still at a low from the May sell off

    By Anonymous Anonymous, at 3:48 PM, November 05, 2006  

  • I think that crude will be lower in the next 2 years due to a slowdown in the growth of demand.

    It is not unreasonable to expect oil prices to fall below $50 per barrel

    The USA consumes 25% of worlwide oil production.

    An economic slowdown in the US and European economies will moderate the demand for oil.

    Supply of oil should increase from increased production in Saudi Arabia, Russia and Canada.

    One key question is whether the political situation stabilizes in the Middle East.

    If the war in Iraq ends, then it is likely that oil exploration and development will resume.

    Iraq could produce up to 6 million Barrels per Day ( BPD) . It currently produces about 2 million BPD.

    From an investment point of view, it would be a good idea to invest in companies whose reserves are located in stable countries.

    Major oil companies are being discouraged from investing in Russia and Venezuala.

    Look for a takeover of Canadian oil companies, even if oil prices fall.

    TLM would be a attractive takeover candidate.

    Demetre Deliyanakis
    BCOM 90 DPA 93

    By Anonymous Anonymous, at 10:14 AM, December 10, 2006  

  • This blog hasn't been updated in over 13 months.

    By Anonymous Anonymous, at 9:50 PM, April 29, 2007  

  • A liar is not believed when he speaks the truth. .........................................

    By Blogger 幸田來蔚, at 9:44 AM, January 29, 2010  

  • nice job! waiting for your new artical...................................................

    By Blogger 剩沒底天, at 9:58 PM, February 22, 2010  

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