Author Topic: Oil Investing  (Read 11974 times)

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #100 on: November 06, 2020, 12:03:46 PM »
China's growth has been a significant factor in oil demand.  But how many people will make an expensive purchase like a car.. from an unknown company?  Not only would companies in China need to ramp up, they would need to slowly overcome being an unknown brand.  I don't see that happening in just a few years at a scale that impacts oil demand.

This week Vanguard Total Stock Market (VTI) is up +6.26% according to etfdb, while SPDR Oil & Gas Exploration & Production ETF (XOP) is up +3.00%.  So oil still trails the market, and has negative performance over every time horizon, from 1 month to 15 years (according to Yahoo Finance).

The question for me is what happens when vaccine news arrives.  My Covid stock barometer is Macy's stock (M), which took a sharp increase back in the second week of June.  I believe that was the first week that new Covid-19 cases declined, and so is a good indicator of what happens with positive Covid news.  For XOP, the spike was even sharper, which gives me some hope that vaccine news could lift oil-related stocks.

No vaccine news yet, but maybe we'll know in the next month or so.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #101 on: November 09, 2020, 08:13:46 AM »
Change "next month or so" to "next week" - initial vaccine results show Pfizer's vaccine around 90% effective.  As more data arrives, they'll have a more exact measure.  Most likely, they'll apply to the FDA for emergency use authorization within weeks, and will probably be granted within weeks.  So there should be more good vaccine news ahead.

The market has been open about 40 min so far, this Monday:
Macy's stock is up +18%
XOP (oil/gas ETF) is up +13%

That confirms my theory, that oil/gas is related to Covid and will experience a partial recovery on vaccine news.  It's also fortunate for those who hold options, because a 90% effective vaccine can end an epidemic - well before options expire.


ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #102 on: November 09, 2020, 11:57:53 AM »
Been waiting for this day for months....  Hope to see if these gains hold up.

Just a few of my holdings.... 

SLB +21.5%
COP +16.4%
DVN +18%
TOT +16%
PBFX +11.3%
EOG +19.5%
PVAC + 29.0%
MGY +22.0
CPE + 34%
OXY +21%

Tankers
TNK + 11.8%
FRO +12%
GLOG +8%

Banks
FHN +15.3%
PACW +26.5%

and the Covid Darlings

AAPL +1.0%
TSLA 1.0%
ZM -13.6%
MSFT -.3%

Full disclosure:  This does not mean I'm even at break even for all of these stocks.  Unfortunately, I'm not because I've been accumulating some tickers for some time and the bottom REALLY dropped out the past six weeks or so and I was hesitant to average down on all of my oil positions. 
I'm hoping this is the beginning of a significant rotation back into sectors that have been crapped upon the past six months.  I stand by my original thesis on page one that we will be using oil and petroleum products for decades to come and we could well face a global shortage in the near/short term because capex spending has been so low the first 3q of this year.  We will see.  I wouldn't be all that surprised if a bunch of these tickers give back 10%+ tomorrow.  We'll see. 

« Last Edit: November 09, 2020, 12:00:17 PM by ice_beard »

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #103 on: November 09, 2020, 03:52:57 PM »
Zoom dropped further before the market close, down 17%.

Also wanted to update that Macy's and Oil & Gas ETF (XOP) are even closer together now:
Macy's (M) +17%
SPDR S&P Oil & Gas (XOP) +16%

That Macy's and oil stocks are so close together is a relief - it confirms the connection between Covid stocks and oil stocks.

Months ago I accurately predicted the second wave in the U.S., and speculated with put options to profit off it.  That speculation was a huge loss - the cases happened, but people ignored it.  I predicted the rising cases, but not people's reaction.  Now experts are predicting rising cases between Thanksgiving and Christmas holidays, and I can't predict how people will react.  So I'm just sticking with my current investments.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #104 on: November 10, 2020, 02:23:17 PM »
11/10/2020

PVAC up another 6.7% 
COP + 6.4%
TOT + 4.4%
PBFX + 4.5%
DVN +3.8%
EOG +4.7%
CPE -8%  (was up 33% yesterday)

Tankers

DHT +8.5% after impressive earnings
FRO + 5.3%
EURN + 4.4%
TNK + 4.3%
GLOG + 7.5% (LNG) after beating on earnings


AAPL -.3%
MSFT -3.4%
VGT (Vanguard Tech etf)  -2%

These assets are still incredibly BEAT DOWN but there is still a LOT of room to run.  Although a lot of the short term run-up might have happened. 

thedigitalone

  • Stubble
  • **
  • Posts: 168
  • Location: PNW
Re: Oil Investing
« Reply #105 on: November 10, 2020, 02:47:20 PM »
DHT +8.5% after impressive earnings

I've been playing with DHT (gambling more or less) for the past 45 days or so, bought a little each time it dropped below $5.00 and planned on selling when it cycled up 10% which never happened. Now the earnings are out and dividend set to $.20 and I need to decide if I should sell now, or wait for the dividend window (Nov 18th) and then sell.  It spiked today up to $5.60 so I'm up 13.8%, far better than what I was targeting.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #106 on: November 10, 2020, 06:52:55 PM »
DHT +8.5% after impressive earnings

I've been playing with DHT (gambling more or less) for the past 45 days or so, bought a little each time it dropped below $5.00 and planned on selling when it cycled up 10% which never happened. Now the earnings are out and dividend set to $.20 and I need to decide if I should sell now, or wait for the dividend window (Nov 18th) and then sell.  It spiked today up to $5.60 so I'm up 13.8%, far better than what I was targeting.

I'm wondering if I should sell too... but their 4th quarter charters have something like 70%+ of days covered at way over their very low break even rates.  I have a feeling their 4th quarter is going to be pretty strong as well, at least compared to their competitors.  Honestly I'll probably hold and  average down if it goes below $5.  I assume you've heard of the potential "super cycle"?  They are well positioned for such an event in the next few years. 

ChpBstrd

  • Magnum Stache
  • ******
  • Posts: 4100
Re: Oil Investing
« Reply #107 on: November 10, 2020, 06:56:23 PM »
Two weeks ago I never would have believed the narrative that many big tech stocks were priced on the assumption that a Covid vaccine would never be found, and that small caps, materials, energy, etc. were priced on the assumption that all of the vaccine announcements we were told to expect this quarter would be negative.

norajean

  • Pencil Stache
  • ****
  • Posts: 603
Re: Oil Investing
« Reply #108 on: November 11, 2020, 04:15:39 AM »
The vaccine is viewed as good for the US and global economy and thus lifted oil prices.  Oil company stocks almost always follow oil price swings.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #109 on: November 13, 2020, 10:28:15 PM »

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #110 on: November 23, 2020, 10:51:50 PM »
CPE up another 24% today.  OXY 17%, others I hold that were 10%+ today, MGY, EOG, DVN, CDEV.  Tankers up.  Most of the sector was at least +5% today. 
This party might just be getting started.  Some old timers are starting to reminisce about the great oil bull runs of the past... 

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #111 on: November 24, 2020, 11:20:39 AM »
Oil & Gas ETF "XOP" is up +5.6% ... but near the money options for 2022 are up +25%.

The biggest risk factor for oil stocks right now is what OPEC+ decides to do.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #112 on: November 24, 2020, 04:50:02 PM »
The biggest risk factor for oil stocks right now is what OPEC+ decides to do.

The market has pretty much already told OPEC that they must keep cuts in place for at least Q1 2021 and Q2 is also not a bad idea.  No way they open the taps starting in January and kill this nascent rally.  Everyone, especially Saudi Arabia and other OPEC members needs oil higher than this ~$40 crap.     
« Last Edit: November 24, 2020, 04:52:09 PM by ice_beard »

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #113 on: November 25, 2020, 08:14:29 AM »
Keeping production the same makes sense.  I assume Russia and Venezuela are struggling enough to agree to it.

I have call options in CPE and XOP, myself.  Of the two, I like XOP much better - better diversification, better profit so far.  The stock price is $58/sh right now after a -2.7% drop in early trading.  Drops are a good time to buy options, in my meager experience.

If I had to invest right now in oil stocks, I'd buy call options on XOP.  I'd want to buy long-dated call options to give oil more time to recover, with the longest-dated call options being Jan 2023.

$58 strike costs roughly $15/sh: 100% to 0% loss from $58 to $74, but then 4X leverage
$45 strike costs $20/sh, which means 33% to 0% loss from $58 to $65, then 3X
$30 strike costs $30/sh, or 7% to 0% loss from $58 to $60, then 2X profits

There's also much riskier plays, like 2020 Dec 24 options in XOP:
$40 strike costs $18-$19/sh, so profits and losses are 3X from here
$50 strike costs about $9/sh, with roughly 5X leverage for one month
$58 strike costs $4/sh, so a $62/sh breakeven, and then 15x leverage

PaulMaxime

  • Bristles
  • ***
  • Posts: 304
  • Age: 58
  • Location: San Francisco, CA
  • Absolute power doesn't corrupt, it reveals.
Re: Oil Investing
« Reply #114 on: December 02, 2020, 12:40:35 PM »
Interesting article on Bloomberg about Peak Oil

https://www.bloomberg.com/graphics/2020-peak-oil-era-is-suddenly-upon-us/

A year ago, if anyone in the petroleum business had suggested that the moment of Peak Oil  had already passed, they would have been laughed right off the drilling rig. Then 2020 happened.

Planes stopped flying. Office workers stayed home. ďZooming with the grandkidsĒ replaced driving to see family. A year of global hunkering yielded the sharpest drop in oil consumption since Henry Ford cobbled together the first Model T. At its worst, global demand dropped by a staggering 29 million barrels a day.

As a once-in-a-century pandemic played out, British oil giant BP Plc in September made an extraordinary call: Humanityís thirst for oil may never again return to prior levels. That would make 2019 the high-water mark in oil history.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #115 on: December 02, 2020, 10:03:42 PM »
Peak Oil articles are about as common as the "People are Fleeing California in Droves!" articles I've been reading since I moved here over ten years ago.  Yet traffic doesn't get better (except during a pandemic, it's been great!) and housing certainly isn't getting cheaper.  People may be leaving, but they keep coming too.   

As for peak oil demand...  I can see it for wealthy European countries like Norway, Sweden, Denmark, maybe Germany.  But you convince people living in Indonesia, India, Malaysia and the Philippines to charge up their car overnight on their un-reliable grids vs. existing, cheap gasoline/diesel.  This is where the growth in auto sales is.  The petrochemical sector of OG isn't going to be replaced any time soon either.  I don't doubt the growth curve is going to be effected, but we will be powering a lot of things with dead dinosaurs for awhile.  The market currently seems to think so as well.   

I don't know how long I'll hold my positions, but likely a few years, maybe longer. 

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #116 on: December 03, 2020, 11:51:11 AM »
Here's some 1 month performance for some selected oil investments:
XOP up 31.77%
OXY up 64.66%

Which means my call options on those have had rather insane performance recently.  Oil offers me a combination of two investments: oil is beaten up to historic lows, and oil stocks are additionally suffering under Covid.  I can make gains off either recovery.

Someone buying $17 call options on OXY that expire in Jan 2022 could gain significantly in a recovery.  Options offer almost 4x leverage, but if the stock gains +30% the options would just break even (+0% performance).  Stocks are best for capturing smaller gains, and options better for capturing very large gains.  I view the downside risk, of bankruptcy, as being equally harsh to stocks or options.

A more broad index may appeal to some investors reading this:
Energy Select Sector SPDR ETF ("XLE"), up 28.38% in 1 month, -33.02% YTD
Direxion Daily Energy Bull 2X ETF ("ERX"), up 58.72% in 1 month, -91.62% YTD
(ERX started the year as a 3X fund, took 3X losses, and switched to 2X...)

EDIT: Deleted duplicate paragraph.
« Last Edit: December 04, 2020, 06:27:29 AM by MustacheAndaHalf »

blue_green_sparks

  • Stubble
  • **
  • Posts: 236
  • FIRE'd 2018
Re: Oil Investing
« Reply #117 on: December 03, 2020, 01:18:15 PM »
Yeah, VDE shares up 31%...guess I will keep until vaccines are starting to help.

meghan88

  • Pencil Stache
  • ****
  • Posts: 830
  • Location: Montreal
Re: Oil Investing
« Reply #118 on: December 03, 2020, 02:56:07 PM »
Good on you, OP.

I have some "play money" in Whitecap on the TSX (WCP).  Bought 5000 shares at an ACB of 2.91, now it's at 4.01.  I'm holding but keeping an eagle eye on it.  In the meantime I've been getting a dividend of $74.10/month.  I don't love the industry, but I couldn't resist buying low.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #119 on: December 04, 2020, 07:15:07 AM »
Thanks, and maybe picking November is being too selective, but it was the point of my investment thesis.  A recovery favors beaten up stocks.

Speaking of which, Whitecap (WCP) is currently $4.01/share, but a year ago it was $4.04/share.  Has the Covid recovery already happened for Whitecap?
https://ca.finance.yahoo.com/quote/WCP.TO?p=WCP.TO

What do you think of Vanguard Energy sector ETF (VDE)?
Vanguard's VDE is down 1/3rd, which in a recovery potentially translates to +50%.  When I look at WCP, I see it's down 1/4th, so it has about +33% to rise before it breaks even / recovers.  Not only does VDE have more upside potential, but it invests in 115 companies instead of just 1.

---
Yesterday, considering the uncertainty of the OPEC+ meeting, rising cases, and having 10% in cash, I increased my investment in Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (aka, "GUSH").  It's underlying index, which I believe is XOP, gained +34% in November.  GUSH in that same month gained about twice as much, +72%.

Note that derivative ETFs like GUSH cannot "recover", and have weird characteristics.  An example is probably better than a description, so take the S&P 500 and a 3X S&P 500 ETF ("UPRO").  How did they perform in the past 12 months?
S&P 500, "VOO", gained +20%.  UPRO, with triple the price moves, gained +15%.
https://etfdb.com/etf/VOO/#performance
https://etfdb.com/etf/UPRO/#performance

If there's too much volatility, GUSH could perform worse than XOP.  But with vaccine news ahead, I'm investing on there being more upside than downside.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #120 on: December 04, 2020, 10:47:13 AM »
What a rip today!  I'm contemplating selling some things.  I think this rally is getting ahead of itself. 

meghan88

  • Pencil Stache
  • ****
  • Posts: 830
  • Location: Montreal
Re: Oil Investing
« Reply #121 on: December 04, 2020, 03:07:38 PM »
Thanks, and maybe picking November is being too selective, but it was the point of my investment thesis.  A recovery favors beaten up stocks.

Speaking of which, Whitecap (WCP) is currently $4.01/share, but a year ago it was $4.04/share.  Has the Covid recovery already happened for Whitecap?
https://ca.finance.yahoo.com/quote/WCP.TO?p=WCP.TO

What do you think of Vanguard Energy sector ETF (VDE)?
Vanguard's VDE is down 1/3rd, which in a recovery potentially translates to +50%.  When I look at WCP, I see it's down 1/4th, so it has about +33% to rise before it breaks even / recovers.  Not only does VDE have more upside potential, but it invests in 115 companies instead of just 1.

Hmm.  I hadn't considered any other buys in energy, aside from pipelines.  IMO, the trouble with investing in 115 companies is that not all might make it, though some might get acquired.

I bought WCP after reading up a lot about them.  They're a light crude producer and they are well-managed.  I'd bought a bit, then when the price plunged in March, I picked up a good chunk at 0.83/share.  Since then I've been regretting not buying more, of course, but at least I had the guts to buy what I did.  They're up again today to 4.23 - a recovery from the low last March, for sure, but they fell faster and harder than the bigger names.  Makes up for other dumb things I've done, and it's fun to watch, so I'll see where it goes.
« Last Edit: December 04, 2020, 03:09:41 PM by meghan88 »

Ricochet

  • 5 O'Clock Shadow
  • *
  • Posts: 31
  • Location: District of Corruption
Re: Oil Investing
« Reply #122 on: December 04, 2020, 04:09:10 PM »
CPE up another 24% today.  OXY 17%, others I hold that were 10%+ today, MGY, EOG, DVN, CDEV.  Tankers up.  Most of the sector was at least +5% today. 
This party might just be getting started.  Some old timers are starting to reminisce about the great oil bull runs of the past...
Iím all in too, on these! Today and yesterday have been epic, and itís just getting started. Some of my energy stocks are over 100% up since I got them around April.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #123 on: December 04, 2020, 08:30:54 PM »
CPE up another 24% today.  OXY 17%, others I hold that were 10%+ today, MGY, EOG, DVN, CDEV.  Tankers up.  Most of the sector was at least +5% today. 
This party might just be getting started.  Some old timers are starting to reminisce about the great oil bull runs of the past...
Iím all in too, on these! Today and yesterday have been epic, and itís just getting started. Some of my energy stocks are over 100% up since I got them around April.

I'm not "all in" on oil and gas, I'm not that brave.
The trick now is when to sell??  How much is enough??  How big can this rally get?  Today was actually a very good sign because stock prices rocketed but WTI was only up .99%.  Today's rally was likely related to OPEC cuts more than anything, but if huge price gains can be had without topping out on WTI, I take that as a favorable sign.



MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #124 on: December 05, 2020, 08:56:48 AM »
ice_beard - Don't forget the interaction between oil stocks & Covid.  The first vaccine was announced Nov 9th, with 90% effectiveness - far better than experts predicted.  XOP went from 40.59 (Nov 6) to 47.16 (Nov 9), a gain of +16% in one day.  There's many other examples of how vaccine news has the largest impact on oil stock prices.  Oil consumption picks up as vaccinations pick up, so the connection makes sense.

Ricochet - Oil investing is part of my risky approach, but I also invest in retail (like Macy's), airlines, cruise lines, hotels, etc.  There's lots of opportunities outside the oil sector, which can add some diversification while also having high potential returns.  I've bought dozens of non-oil stocks and had no bankruptcies.  I bought 4 oil stocks, and half went bankrupt.  Diversification is important, in my view.

meghan88

  • Pencil Stache
  • ****
  • Posts: 830
  • Location: Montreal
Re: Oil Investing
« Reply #125 on: December 09, 2020, 07:55:39 AM »
Small victories - WCP is buying TOG, and raising the dividend by 6% in March. WCP is up 10% so far today.  I think there will be a lot of M&A in the space, as the survivors snap up the weaker companies/assets at depressed prices.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #126 on: December 12, 2020, 12:09:25 AM »
meghan88 - How unusual: on Wednesday, both companies jumped up in price.  Normally the company being bought (like Slack) goes up sharply, while the acquiring company's stock takes a hit.


Occidental Petroleum (OXY) is up +104% in 3 months, according to morningstar.  My call options are like having leverage on that stock price, so they're doing much better than the stock.
https://www.morningstar.com/stocks/xnys/oxy/trailing-returns

meghan88

  • Pencil Stache
  • ****
  • Posts: 830
  • Location: Montreal
Re: Oil Investing
« Reply #127 on: December 13, 2020, 05:08:11 PM »
MustacheAndaHalf, nice one on OXY!

I think the reason that both SCP and TOG went up is because they are both well-run companies to begin with, and will achieve even greater synergies combined.  It's an at-market all-stock deal, and the market really seemed to like it.

I can't help to think that there might be a bit of a pullback in the commodity price since things shot up so fast, and also because I can't imagine that consumption is approaching anywhere near what it was pre-COVID.  But the share price is heading in the right direction and I'm inclined to hold for the long term, especially given the dividend hike.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #128 on: January 05, 2021, 11:20:57 AM »
In today's trading, OXY is up +11.5% which cancels out a lot of the December drop and brings it to +88% over the past 3 months.  Sometimes on the forum I'll mention "insane returns" and refuse to give specifics.  Just imagine call options earning a multiple of the stock return.... and OXY is still down 56% from 1 year ago, so I'm not selling yet.

It looks like OPEC just reached a compromise to maintain current production levels through March, which is why oil stocks got a boost.

Back in August while buying call options I made a mistake with the expiration date, and accidentally bought CPE stock (Callon Petroleum) at a shorter expiration of Jan 15 2021 (next Friday).  Fortunately it was a small position, so the loss is small.

But today is interesting: the options doubled in value, since CPE stock went from $13/sh to $14.78/sh (+12%).  Currently, these call options are 40% intrinsic value and 60% time value (of 9 days!).  That time value should fade incredibly fast, and I don't expect more events on the scale of OPEC reaching a compromise.  So I think I should capture today's time value, and sell at a smaller loss than I was expecting.

Looks like a very good day for oil stock investing.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #129 on: January 10, 2021, 08:56:17 AM »
It looks like OPEC just reached a compromise to maintain current production levels through March, which is why oil stocks got a boost.
...
But today is interesting: the options doubled in value, since CPE stock went from $13/sh to $14.78/sh (+12%).  Currently, these call options are 40% intrinsic value and 60% time value (of 9 days!).  That time value should fade incredibly fast, and I don't expect more events on the scale of OPEC reaching a compromise.  So I think I should capture today's time value, and sell at a smaller loss than I was expecting.
The OPEC compromise was the last big positive event for CPE stock before those call options expired 2021 Jan 15.  I sold for $1.45/sh, although on Yahoo Finance's graph the highest Jan price was $1.25/sh.
https://finance.yahoo.com/quote/CPE210115C00014000?p=CPE210115C00014000

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #130 on: March 03, 2021, 11:16:26 AM »
It's worth bumping this one today...

Important week with OPEC+ meeting trying to decide if there will be an increase in production and/or how much. 
In North America, output totals, refinery runs, builds and draws are incredibly screwed up after the huge power outage mess in Texas, but in general, the trend is for increasing demand.

I wonder if things are getting ahead of themselves a bit today.  Some names are up BIG... 

CPE, the little penny stock that could broke $30 today, +16% (was $5.70 in September after a decimating reverse 10:1 split in August.)

OXY is about to break $30 as well, +5% (was < $20 at the beginning of Feb.)  The warrants are ripping to the sky as well. 

CDEV is now > $4.50, +14.5% (traded as low as the .30s last spring/summer)

MGY announced a non-dilutional secondary offering yesterday and the stock offered a nice pick up price at < $11 this morning, which is now long gone.  $11.67 as I type this.

PVAC + 11% today

There are still some plays left in this field...  I'm watching GTE closely.   
« Last Edit: March 03, 2021, 11:24:41 AM by ice_beard »

Ricochet

  • 5 O'Clock Shadow
  • *
  • Posts: 31
  • Location: District of Corruption
Re: Oil Investing
« Reply #131 on: March 04, 2021, 09:14:44 AM »
CPE broke $35 today, another crazy 15% run up. This was one of my best purchases.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #132 on: March 04, 2021, 09:14:52 AM »
Meanwhile my oil picks are 6% of my portfolio, or about 2.5 times the U.S. market weight.  So when I talk about oil investing, I'm talking about 6% of my portfolio.
That was me six months ago, and oil investing is now about 20% of my portfolio.  I'm not sure if I addressed each point and people faded away, or if that post stressed my lower risk level, so I thought an update is in order.  My current allocation is 8x higher than the market, so it's significant.

My largest allocation is to OXY call options, which have outpaced almost everything else, and have room to recover, still.  If OPEC+ elects for significantly higher production, that could hurt oil stocks until demand catches up.

Today so far, CPE is up +15%... maybe on earnings expectations?  It's actually above where it was in Aug/Dec of 2019, after adjusting for share dilution (which was very significant).

At some point, I have to decide how much of my oil investing was based on a Covid recovery, and how much is speculating on oil production reverting to the mean.  After a Covid-19 recovery, I expect people to be very interested in traveling for the first time in a year, and that demand to translate to oil demand.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #133 on: March 04, 2021, 10:25:20 AM »
OPEC+ has decided to not increase output through at least next month.  The oil bull run will continue. 

There could seriously be a tight market going into the summer and OPEC knows this.  They absolutely want oil above $80/barrell and we just might see it by May. 

It will be interesting to see how tight it becomes with speculated pent up travel demand combined with massively reduced Capex spending in 2020.  There aren't nearly as many wells prepared to come on line this year because oil cos slashed their spending on exploration and early stage production work.  Things could get interesting and potentially painful at the gas pump as a result.
« Last Edit: March 04, 2021, 10:28:49 AM by ice_beard »

trollwithamustache

  • Handlebar Stache
  • *****
  • Posts: 1079
Re: Oil Investing
« Reply #134 on: March 05, 2021, 09:48:05 AM »
OPEC+ has decided to not increase output through at least next month.  The oil bull run will continue. 

There could seriously be a tight market going into the summer and OPEC knows this.  They absolutely want oil above $80/barrell and we just might see it by May. 

It will be interesting to see how tight it becomes with speculated pent up travel demand combined with massively reduced Capex spending in 2020.  There aren't nearly as many wells prepared to come on line this year because oil cos slashed their spending on exploration and early stage production work.  Things could get interesting and potentially painful at the gas pump as a result.

You gotta be careful trading OPEC. All of those countries need the cash bad to balance their budgets. its game theory... yeah they want 80 a barrel. At 40 it was easy to cut back. But at 60? everyone is tempted to cheat. Who will cheat how much?

Long therm, everyone remember OPEC has like 7.5 or so Million Barrels per day in spare capacity. that can come online when they hit their desired price. For the next year or two I suspect that caps oil prices. At 70-80 dollar oil for a few months every piece of Shale (well ok, on private land!) goes into bonkers production again. That is likely not what the Saudi's want.

Practice safe position sizing.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #135 on: June 01, 2021, 10:10:36 PM »
Gotta bump this thread.

5-15% increases across the board with several prior March highs eclipsed. 
I do wonder how long it will last.  Some say that global stockpiles are still significant.  OPEC+ not making any production changes.   

DVN +13.6% to 30.20 (!!)
CPE +12.2% to 43.14
CDEV +10.2%
PVAC +10%
OXY +9.6%
FANG +8.0%
MGY + 6.5%
COP + 4.7%

and the ultra speculatve plays...

TELL + 11.1% (up 100% in < 1 month) this one is a hundred bagger or bankrupt that landed another buyer for ther LNG project last week 
https://www.retailbull.co.uk/blog/tellurian-a-potential-100-bagger-stock

GTE +6.5%  (fingers crossed)
BORR + 7.4% (fingers and toes crossed)

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #136 on: June 02, 2021, 06:37:08 AM »
Year to date CPE has tripled, with call options doing even better.  Owing to volatility, I've sold some of my CPE calls, but kept most of them.  The 2023 calls were too expensive, so I only have calls that expire in 2022.  CPE has already recovered to it's pre-Covid market cap, after factoring in their 2x dilution of stock.

Looks like OXY is up +60% YTD.

OXY-WT are warrants which give the holder the right to buy OXY stock at $22/sh until Aug 2027.  So it's like having a $22 call for 6 years.  Running the numbers, OXY +3%/year for 6 years will break even, so that seems like a good deal to me.

Many countries still have low vaccination rates, and even lockdowns.  The less travel, the less oil demand.  So I think the recovery has more room to go.  If OXY overcomes it's debt load and recovers to 2019 levels, it could reach $40-$50 range.  Or if the market decides that debt is more manageable.

BicycleB

  • Magnum Stache
  • ******
  • Posts: 4106
  • Location: Colombia
  • Older than the internet, but not wiser... yet
Re: Oil Investing
« Reply #137 on: June 02, 2021, 01:06:36 PM »
What's the difference between OXY/WS and OXY.WT?

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #138 on: June 02, 2021, 06:07:09 PM »
What's the difference between OXY/WS and OXY.WT?

Not sure.  Are they the same price?  The OXY warrants that I'm familiar with closed today at $12.84.  I've noticed that a lot of financial services use different tickers to represent those warrants.  For example, Yahoo finance lists them as OXY-WT. 

In other news, CPE was up another +12% today and PVAC +9%.  PVAC hit $0.99 in April 2020 is now at $23.15.  Really wish I had some of those $1.00 shares! 

BicycleB

  • Magnum Stache
  • ******
  • Posts: 4106
  • Location: Colombia
  • Older than the internet, but not wiser... yet
Re: Oil Investing
« Reply #139 on: June 02, 2021, 08:22:07 PM »
What's the difference between OXY/WS and OXY.WT?

Not sure.  Are they the same price?  The OXY warrants that I'm familiar with closed today at $12.84.  I've noticed that a lot of financial services use different tickers to represent those warrants.  For example, Yahoo finance lists them as OXY-WT. 


I found prices 10 cents different earlier today, but now realize I may have found them on different sites, different moments. I'm guessing it's the same security labeled differently bc I can't find both listings from the same data company anywhere. Nasdaq has oxy.ws (and oxy), Yahoo finance oxy-wt and oxy.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #140 on: June 03, 2021, 08:45:39 AM »
What's the difference between OXY/WS and OXY.WT?
It looks like "OXY WS" is the correct name, according to the company that created them.  In my Vanguard account, they are listed as "OXY WS" as well.
https://www.oxy.com/investors/Services/Pages/June2020Warrants.aspx

For some reason, Yahoo Finance insists on using "OXY-WT" to list the price:
https://finance.yahoo.com/quote/OXY-WT

v8rx7guy

  • Magnum Stache
  • ******
  • Posts: 2609
  • Age: 37
  • Location: Bellingham, WA
Re: Oil Investing
« Reply #141 on: June 03, 2021, 09:06:28 AM »
RECAF with another nice lil bump today after announcing discovering addition evidence of a working conventional oil system below the Kavango...

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #142 on: June 10, 2021, 08:19:00 AM »
Because of that, I've invested in some oil stocks as part of my investing in a recovery from corona virus.  My highest quality investment is in SPDR S&P Oil & Gas Exploration & Production ETF (XOP) call options.
I started this thread on Aug 18 (pre-market) to discuss my investment in SPDR Oil & Gas ETF (XOP), which opened at $55.48 after my post.  XOP started 2020 at $95.76/share, and I predicted it would recover as the world recovered from Covid-19.  In the 9 months since, XOP has gained +77% to hit $98.34 now.
https://finance.yahoo.com/quote/xop/

What is the alternative to a recovery?  To me, that's a strong case for this investment.  Oil demand had to recover at some point, so it was a matter of waiting.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #143 on: October 04, 2021, 10:30:39 AM »
@ice_beard - Are you considering selling your oil stocks?

XOP +66.6% YTD
OXY +80.1% YTD
GUSH (2x XOP) +152.1% YTD
(I've already sold CPE, which is +283.2% YTD)

I've been ending my oil tilt the past few weeks, and just sold off the last of my OXY call options.  I've sold 1/4th of my OXY-WT holdings, because $14/sh is tempting.  I even sold off my USO calls.

Not sure if it's the peak, but it's a peak, and I'd like to reduce my oil tilt.  So now I have nothing except OXY-WT tilted towards oil.  Very, very profitable ride back to recovery.

ice_beard

  • Bristles
  • ***
  • Posts: 251
  • Location: East Bay, CA
Re: Oil Investing
« Reply #144 on: October 14, 2021, 08:53:03 PM »
@ice_beard - Are you considering selling your oil stocks?

XOP +66.6% YTD
OXY +80.1% YTD
GUSH (2x XOP) +152.1% YTD
(I've already sold CPE, which is +283.2% YTD)

I've been ending my oil tilt the past few weeks, and just sold off the last of my OXY call options.  I've sold 1/4th of my OXY-WT holdings, because $14/sh is tempting.  I even sold off my USO calls.

Not sure if it's the peak, but it's a peak, and I'd like to reduce my oil tilt.  So now I have nothing except OXY-WT tilted towards oil.  Very, very profitable ride back to recovery.

I have been selling some.  As shares have been passing from short term to long term capital gains and prices have reached $80/barrel, I've been selling.  I have a few "tiers" of holdings, some I feel will take a few quarters of high prices to be most valuable (OXY and their warrants are a good example, plus some "distressed" small caps I had picked up for pennies).  Others have appreciated 2x-7x and have been happy to take profits on those.  The small caps (MGY, PVAC, CDEV, etc.) are still ripping and I don't know when that's going to change, especially at these prices. 

I sold my first CPE shares last week (<10%), but I think I'm going to hang onto the rest for awhile.  Those were <$10 in 08/20 and now hang out around $55-60.  I think it could run higher if we see $80 for a few quarters.  I don't see any particular reason the barrel price is going to fall any significant way any time soon.  Capex was far too low the past few years and it takes time for production to be increased.  SA claims they can open the taps, but there is some speculation regarding how easily they can actually do that these days.  US shale is actually showing a lot of restraint and is keeping a lid on production and they were the ones who increased production in the past and cratered the price.

I'm sure OPEC+, particularly SA will announce some increased production soon, but that will quickly be accounted for and after a temporary price dip, we will be back around $80.  Demand is high and it isn't going down any time soon. 

$TELL is still trading under $4 and I'm convinced LNG is THE bridge fuel for the energy transition.  Don't miss the boat on that one!!  Hope you've got a uranium position as well.  People want zero carbon power?  Better be thinking nuclear.     

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 5017
Re: Oil Investing
« Reply #145 on: October 15, 2021, 09:17:35 AM »
You might be right about CPE (Callon Petroleum for others).  My best return was from CPE calls at $3, which I sold for +1140% profit.

I've been an index investor for a long time, but last year was an opportunity I couldn't pass up.  I wouldn't trade my performance for anyone else's, it was insane.  But now that most of my Covid sensitive investments have recovered, I'm pushing towards indexing again.  I've kept 1/3rd of my OXY warrants just to see what happens, but I no longer have anything invested in CPE, XOP or GUSH.

Speaking of GUSH, it's 52 week performance of 370.78% ranks it #4 of all ETFs.
https://etfdb.com/compare/highest-52-week-returns/