berger mnaking cuts
http://r.smartbrief.com/resp/gEgpCopnAuCOephJCidLfXCicNbYJM?format=standard
Same until I read fooled by randomness. Now I question questioning of questions.
Okay, we may need to start this thread back up.
Oil moving lower again rather rapidly, what’s up?
people are crapping their pants about china is what. look at copper today and yesterday. bloodbath.
^even gold is getting crushed.
Disinflation roaring it’s head. Great time to be in cash, 6-10 more months IMO.
But don’t worry guys, gas prices are still only 10% off their 12 month high! Yay for me!
Iranian oil’s entry into the global chain is imminent.
Iran and China mostly. And the rig count stopped falling and went up slightly. Reuters analyst Jon Kemp wrote an interesting piece on availabiltty bias on US data when impacting global markets.
Re
I wouldn’t really say the rig count has been contributing to the oil price decline in the last few weeks. NAm rig count fell back to the lows this week, and while there may not be that much downside, it doesn’t seem like it will have much beta to the upside in the near term.
Anyone else see Bloombergs peice on CMA’s announcement that they have >$3b in HY loans to Oil & Gas companies?
That’s almost half their market capitalization!
50% of their market cap in oil/gas wouldn’t be very much. It sounds like a lot, but banks are leveraged entities. But it did cause quite the stir today and I spent the majority of my day dealing with it. But I think most people expected this (at least most people who are active in the space).
Lots of pain in offshore oil services (onshore sucks, too). It’s very unpopular right now. Book value isn’t a good indicator of value, but some of these companies viewed to have attractive assets one year ago are now trading at 50% of book value (ATW). Less attractive areas I even see at 25% of book value (GLF). It’s really pretty terrible.
If you’re someone like Schlumberger (a fantastic company), you’ve got a lot of opportunities in the market right now. I’d buy OII if I were them, but they know more than I do. Offshore is ugly, ugly, ugly right now but it won’t be forever.
Interesting enough, there is a lot of PE/VC money flowing into oil/gas right now. I haven’t heard as much of it on oil field services, but a lot of production guys are recieving insane interest. Makes me think marginal producers are artificailly being held afloat and supply/demand getting artificially skewed due to people seeking out returns in “under valued” assets in our current environment.
I agree that the E&P is more attractive form an investment standpoint compared to services.
I think the services companies have no major need to raise capital, unless its for maturing debt, so naturally there should be less activity. There’s a surplus of equipment in the industry, so they don’t have much capex needs. E&P’s are always thirsty for capital.
as always tommy. you kno ur shit.
My company has been saying for months that rig count is really not as meaningful as the talking heads would like you to think. I mean Bakken rigs are down something like 50% and production isn’t rolling over. Companies are simply drilling the better wells and not doing any of the science/2nd tier stuff like they were 12 months ago. Not to mention there were/are hundreds of good wells sitting drilled but uncompleted that can be brought online - rig count doesn’t have anything to do with that.
Google this article and read it Kanuck (link won’t work due to pay wall):
Oil statistics haven’t kept pace with evolving industry
And this is the Kemp piece: http://www.reuters.com/article/2015/07/07/usa-oildata-kemp-idUSL8N0ZM35B20150707
Might want to read the book again. If there wasn’t people consistently beating the market, it wouldn’t be random.
US to stsrt exporting oil to Mexico