oil up 90 cents since I shorted… boourns
Just keeps climbing. You’re trying to fight fundamentals shorting this. The price overshot on the downside. Commodities will be priced at the marginal cost (ignoring noise) in the long run. Demand is growing, marginal cost of the next barrel is higher than $40, especially since OPEC is tapped out running full throttle. Prices will continue to climb.
While I don’t disagree, how about handicapping it properly. Give us probabilities and expected moves. Something actionable. Stating it will continue to climb is meaniless as far as allocating capital, unless you are assigning 100% certainty. In that case, margin everything.
I’m comfortable up to $50, then take some profit. I’d add to my position below $35. I’ve got about 15% of my portfolio long quality juniors and another 25% in midstream at this level.
Any thoughts or ramblings in the local press about Bellatrix? I’m in below a buck US. Thinking about adding. I see a positive expected return, but maybe fifty percent chance of survival or extreme dilution over the next two years. The upside possibility makes it enticing. Multi-baggers make up for a lot.
You have a lot of certainty about an uncertain thing. Inventories are still building though, and piling up on levels that are literally the highest they’ve ever been. it’s not a guarantee. I was long until literally yesterday, but the bullish sentiment seems overblown to me, hence the short
Brent continues to be slightly backwardated for the next month. So…more expensive to buy oil now than a month from now…suggesting demand is picking up.
I think we’ll have modest/moderate growth in prices. Not to the $100 level, but probably the $60ish levels. KSA and Iran will keep pumping oil to screw each other, but shale will cut back.
Not that familiar with Bellatrix, but I took a look. Debt 6x operating cash flows for 2015? I don’t know. It’s certainly higher risk than where I play. Sure there is upside but this could be a troubled firm in a hurry. Not sure about asset quality though. If high quality, then maybe someone buys them out on the cheap.
Buy five of these risking plays instead of one more secure position with the same funds. The expected return is usually much higher and your total risk could end up lower as well. A win, win.
I’m not certain the price will be higher tomorrow, but I am certain oil is trading below its marginal cost. You might be making the better trade, but I am 75-80% confident I’m making the better investment. Also remember, the price will turn before the inventories do. If you wait until the news that inventories are down, there will be nothing to trade. Be greedy when others are fearful, don’t buy when there is no risk left. Anyway, we are at $44.30 this morning. You’re getting crushed.
You’d be insane not to right now.
of course my most recent trade is down, but I’m not getting crushed - I’ve only got 20 shares of dwti. I got them for $116, and they’re worth 105 now, so I’m down like $220 - my portfolio’s worth just over $50k. That said I’ve been trading oil for the better part of a year now -if you find my posts, you can see that things have mostly gone my way. I’m not telling you oil will go up or down - I’m saying it’s unclear, and it’s ludicrous to think you know. There are bearish and bullish forces in play - Iran is still ramping up, the US has not dropped its production much, and with the price staying north of $40, I don’t see an incentive to turn off the taps. Even GS is cautious on oil, saying the jump has been a bit extreme (read the article in reuters). The trade I’m doing is for some pullback, maybe to $40 or so. As for your certainty that the current price is below oil’s marginal cost… there isn’t one cost, there are many. Arab marginal cost per barrel is probably like $10-$15, but for canadian oil sands, it’s probably like $70 or higher. Shale producers can clearly get by on $40 no problem. seems like u taking this whole discussion pretty personally
The question is for how long. Another few months at $40, most probably can. Another year? Some can, most can’t. Capital structure means a lot looking at these smaller companies.
I dunno. I just closed my short though - this pullback does not seem to be happening. just now sold dwti @ 101 for a sweet loss of $15 per share (or $300) and going long again (buying uwti @ 28.50)
WTI $50/bbl gents. Yeehaw.
just spent an hour with eric nuttal. he’s got a pretty damn convincing case for a decent move up about 1 year out. he says it’s six months away but i’d say it’s a year or so based on his data. he’s short-term bearish with over 60% in cash as i type.
Note date of article. http://www.cnbc.com/2016/01/19/fund-managers-take-second-look-at-indebted-drillers.html
Saudi Arabia’s plan is working.
Yes our investment in the sector has dropped off a cliff. Despite that, our oil production is set to increase substantially over the next 2-3 years. This is due to large scale oilsands projects which already had large sunk costs and subsequently will be coming online soon. ----- That’s just what i read from our provincial government’s budget. I don’t know for sure because I haven’t checked for that information from the companies themselves. Temporary setback with the wildfires up here, but that is just temporary. It’s been raining alot the past week, people should be going back to Fort Mac. soon.