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Message
Is "smart money" piling into oil once the calendar flips to January?
Posted on 12/27/15 at 8:46 pm
Posted on 12/27/15 at 8:46 pm
A few of my trusted sources say yes. What say the MT?
11
Posted on 12/27/15 at 9:21 pm to RidiculousHype
Could you give insight into why this would happen?
TIA
TIA
Posted on 12/27/15 at 9:47 pm to RidiculousHype
Sure oil will go back up but do you really want to buy it at $35 when it very well may be at $25 in 6 months?
Posted on 12/27/15 at 10:03 pm to C
quote:
buy it at $35 when it very well may be at $25 in 6 months?
This could happen, but at the same time the S&P 500 didn't do so hot this year either so a buy and hold for oil really wouldn't be giving up much opportunity cost if it takes another year for oil to recover and the S&P lags again.
Posted on 12/28/15 at 8:39 am to C
always trying to time the market perfectly
You buy at $35, then it does go to $25, but when it shoots back up to $65 or $70 you win either way
You buy at $35, then it does go to $25, but when it shoots back up to $65 or $70 you win either way
Posted on 12/28/15 at 9:07 am to RidiculousHype
I'm personally long oil for the first time since summer of 2014. Having said that, my position is not buy and hold and I'll be unloading in the 50 to 60/bbl range. On the downside, any breach of ~32ish and I'll be out.
Posted on 12/28/15 at 11:21 am to RidiculousHype
It's interesting how oil has become an investment vehicle (or that it always was).
Something so necessary for our economy, that is subject to wild price swings based more times on speculation than on underlying economics.
$100 oil is gone for a long while. If oil starts to jump, all of these new technologies for finding oil will restart long before it gets to $100 which will clamp a rapid rise.
I see nothing ahead that would indicate a change in the supply/demand in the short term. If anything, looks like supply is still too high.
Something so necessary for our economy, that is subject to wild price swings based more times on speculation than on underlying economics.
$100 oil is gone for a long while. If oil starts to jump, all of these new technologies for finding oil will restart long before it gets to $100 which will clamp a rapid rise.
I see nothing ahead that would indicate a change in the supply/demand in the short term. If anything, looks like supply is still too high.
Posted on 12/28/15 at 11:51 pm to RidiculousHype
What would be the best play solely based on oil price, USO?
I have been thinking about going long, and don't mind waiting a few years if I can possibly triple (or more) my money.
I have been thinking about going long, and don't mind waiting a few years if I can possibly triple (or more) my money.
Posted on 12/29/15 at 6:52 am to LSUFanHouston
quote:
$100 oil is gone for a long while.
Define a long while
A year?
5 years?
20?
Posted on 12/29/15 at 8:19 am to yellowfin
The last oil bear lasted 19 to 20 years. If this one does the same, or even close to it, $100 oil is over 20 years away as we are currently 7 years into the oil bear.
Having said that, in the last oil bear your big oil companies bottomed in stock price about 2 years after the oil crash. If one considers the 2014 event as the crash, we are almost at the 2 year point. I don't see these stocks taking off, but long term bottoms in companies like XOM, CVX, COP, BP, She'll, and Total could be happening soon. I plan on waiting for what I think is a USD top before dipping my toe in, which could be a year plus, but I'm watching the large players. For smaller oil companies, I'd think bottoms would occur later in the cycle.
Having said that, in the last oil bear your big oil companies bottomed in stock price about 2 years after the oil crash. If one considers the 2014 event as the crash, we are almost at the 2 year point. I don't see these stocks taking off, but long term bottoms in companies like XOM, CVX, COP, BP, She'll, and Total could be happening soon. I plan on waiting for what I think is a USD top before dipping my toe in, which could be a year plus, but I'm watching the large players. For smaller oil companies, I'd think bottoms would occur later in the cycle.
Posted on 12/29/15 at 9:54 am to RidiculousHype
Don't know if I'd call it "smart money". May be speculators making short-term plays.
Posted on 12/29/15 at 9:58 am to LSU0358
I don't think you can just make a blanket assumption that since the last oil bear lasted 20 years that this one will as well. Totally different circumstances, and the power structure isn't even close to being the same.
Posted on 12/29/15 at 10:08 am to LSU0358
So 20 years away from $100 oil?
Posted on 12/29/15 at 11:23 am to LSU0358
So oil going from $140 to $40/barrell in 2009 wasn't considered a bear market?
Posted on 12/29/15 at 11:41 am to Shepherd88
Barring some cataclysmic hitting the fan event I can't see anymore than $60-$65 per barrel as an average for the next 10 years or so....too much of it and too good of technology and bust my britches if the stuff doesn't appear to be renewable...contrary to the talk of the 70s and 80s
Majors are for long term holders
Majors are for long term holders
This post was edited on 12/29/15 at 11:42 am
Posted on 12/29/15 at 11:44 am to yellowfin
quote:
Define a long while
A year?
5 years?
20?
Short of some major geopolitical event that caused a crazy quick spike, I don't see it rising above $100 in the next 5 years. The market fundamentals just don't support that. And even if there was some major geopolitical event, I think it would be a very quick jump, as we have a ton of oil now in storage and we could turn on some additional sources pretty quickly (as in 1-3 months)
Oil is oil. There are different grades from different places, but it's not like there is new and improved oil that would command a higher price. We are getting it from more places. More companies and countries want to be and are in the exploration game. OPEC is essentially broken, especially since it's clear the Saudis don't give a crap about anyone but themselves. And the rest of the petro-countries have to keep producing as so much of their national budgets are based on oil. $40 a barrel is horrible for them but it's better than nothing.
Posted on 12/29/15 at 12:04 pm to RidiculousHype
quote:
A few of my trusted sources say yes.
I don't know if I trust them, but I don't know what you mean by smart money piling into oil. Do you mean futures, equities or private equity investment? I can't speak to the former 2, but as to PE investment the answer is that they have been "piling in" since the first downturn.
Posted on 12/29/15 at 12:10 pm to yellowfin
quote:
Define a long while
A year?
5 years?
20?
Current stip pricing in Dec 2019 is $52.
Posted on 12/29/15 at 12:27 pm to Shepherd88
quote:
So oil going from $140 to $40/barrell in 2009 wasn't considered a bear market?
2008 be the start of the oil bear in my opinion. From a big oil stock stand point though, several of those made higher highs after the 2009 bottom. For example, Chevron went up ~150% from its 2009 low.
Posted on 12/29/15 at 12:30 pm to yellowfin
quote:
So 20 years away from $100 oil?
If someone made me guess, that's what I'd go with. It might happen in 17 or 23 though. Projections 20 years out are tough to make.
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