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Learning, Sharing, and Teaching => Investor Alley => Topic started by: MustacheAndaHalf on August 18, 2020, 02:20:34 AM

Title: Oil Investing
Post by: MustacheAndaHalf on August 18, 2020, 02:20:34 AM
There's some overlap between corona virus and oil stocks which I think is worth investing in.

When people stay at home more, they consume less gasoline.  There are currently numerous travel restrictions between countries - travel is down heavily, and oil stocks are down heavily.  If there's a cure/vaccine for corona virus, transportation would recover and oil stocks would see increased demand.

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.  An ETF contains numerous oil/gas company stocks, so it automatically diversifies the risk of any one company going under.

I suppose the question is after corona virus (whenever that is), should I hang on to oil stocks / options or cash out?
Title: Re: Oil Investing
Post by: theoverlook on August 18, 2020, 09:18:42 AM
I sold out of my limited oil stock exposure (about $25k in Shell) at what turned out to be just about the right time prior to the meltdown in oil stock prices. I sold out for reasons completely unrelated: I just don't see oil being as big a part of our economy long term as it has been. Oil is going to be in use for a very long time still, but its days of the end all be all source of energy are rapidly fading. Between solar power, electric cars, and natural gas fracking, I think demand is going to continue to decline compared to the pre-Corona numbers. It's still going to be a huge industry so now might be a major buying opportunity but in my opinion the long term view (10 years+) is dim.
Title: Re: Oil Investing
Post by: ice_beard on August 18, 2020, 10:48:48 AM
I'll re-post this to this thread.  I posted it last night in the Value Investing thread.


I have been digging through probably the most un-loved sector of the stock market, energy, since April.  I have seen nice returns (nothing like those 1:25,000 PE ratio "tech" stocks though, I'm looking at you TSLA) and suspect there are still some gains to be had and in some instances, quite significant gains, if you've got the stomach for it.

None of this is investment advice.  I am a nurse by trade.  These are simply personal observations.  Do your own research.

This market has many ups and downs and these are mostly LONG term plays with some occasional swing trades thrown in for fun.  If you cannot stomach large swings, this might not be a good market for you.   

My first-timer oil bull thesis of 2h 2020/2021...

Everyone knows oil cratered along with everything else back in March.  It even traded negative briefly, something that had never happened.  Fast forward to now and oil has essentially reached a plateau price point around $40-42 for West Texas Intermdiate crude (WTI) the N. American standard for trading.  It has been trading roughly at this level for a couple months.  Most US companies have either adjusted to this new norm through hedges, slashed capex budgets, shutdown of production, or have gone BK or will be doing so soon.  $40 is not good, but it's a lot better than $20 or $30.  Nobody really wants $40 oil, not US oil cos and certainly not Saudi Arabia, Russia or any of the other Middle Eastern and African countries whose national budgets are entirely dependent upon the price of oil.  There has been and will continue to be a balancing act where all players will try to find that sweet spot for production and price.  Some countries can produce for incredibly cheap prices (Saudi Arabia) while others cost a lot more (Canadian tar sands, offshore deep water) for examples.

In North America, the big players with the best balance sheets, like CVX, will/have weathered this crappy price storm reasonably well and will pick up valuable assets at pennies on the dollar.  Chevron already has, they bought Noble Energy a few weeks ago and Noble apparently has some pretty valuable assets.  Problem is, everyone has known since the beginning of this shitshow that Chevron was probably the best situated of the majors and hence, their price has reflected this knowledge, i.e. there isn't as much room for gains compared to some others...

Second tier companies that have solid balance sheets offer what I believe is strong value too.  DVN is a company I follow.  This stock was trading at 2x+ its current value pre-Covid and in some circles is considered a strong contender for being bought out.  It was trading for as low as $5 in March.  There are smaller players too and not all are dangerously leveraged.  PVAC is my personal favorite.  It traded for as low as $.99 back in March but now trades in the $13 neighborhood but was trading for $8 less than a month ago.  Their 52w high is $37 and their PE ratio is 1.63.  It has a small float so when it runs it runs, also fun to swing trade.  Ooooh to have some of those $0.99 shares!!!

Then there are the seriously leveraged (in debt) companies...  Leverage isn't a bad thing if your assets are valuable.  If the land you own rights to has questionable quality for drilling, then your assets aren't as good as having well sites in known profitable plays.  When debt repayments are due is also of critical importance to oil/gas companies.  Imagine generating debt-killing cash flow with $42 barrel oil vs. $75/barrel oil (when your cost per barrel is running around $35/barrel).  Most oil cos have been trying best they can to get their debt repayments either refinanced or moved back a year or two.  Smaller players with shakier finances (again think about the value of a companies assets, how many barrels a day can they produce at what price, the banks and analysts know this information!) are having a much more difficult time getting these debt payments moved back.  CPE is an example here.  They have reportedly some quality assets but they acquired a company last year that cost them a lot.  Their stock is trading at a massive discount right now.  If they make it through the next year or so and the price of oil eventually makes it back up to $75 or greater, this stock could be a multi-bagger.  Or they could go bankrupt or you could sell after watching your cash evaporate.  How long can you wait and how strong is your stomach??  ;-)

Now for some real leverage... I was critical of Occidental Petro (OXY) back when I started a dumpster diving thread in April.  They had an untimely acquisition in 2019 that is now worth significantly less than what they paid for it.  Again, price of oil is EVERYTHING, it is a commodity after all.  OXY has roughly 40b(!) in debt with a current mkt cap around 13b.  They released incredibly terrible 2Q earnings last week (nearly every oil co. had a terrible 2nd q, imagine that) and their stock has been/is getting hammered.  It has been trading around $13-14 the past few days and has traded as high as $87 in the past few years.  They wrote off 8b in assets last quarter and are in the process of selling off some of their current assets which might net them 4-5b to cover some debts.  There largest debt payments aren't due until late 2021, hence the asset sales.  OXY says they are profitable at $35 right now.  They slashed CapEx spending, management pay and their sacred cow dividend is now down to 1 cent.
This is where that plateaued price of ~$40 comes back into play...  Assets are now being re-priced at this critical level of $40-45 oil and even at that price, OXY has a LOT of assets that are worth a lot of money and because of their size, they generate a lot of cash flow.  The next couple quarters are going to make or break OXY.  Institutional investors have been buying and selling their stock recently.  I have been buying while it is in the $13-14 neighborhood.   

But, but batteries and E-cars you might say!!  I'm all for a less carbon dependent future, but in the United States and in developing nations, there will be a lot of oil and natural gas that will be consumed over the next few decades.  I would even be fine with this investment going south if I am completely wrong about electrification of transportation because I think it would be better for the environment and life on earth in general.  I just don't think it's going to happen in the time frame a lot of people are thinking.  And yes, I know Norway has like 60% electric vehicles....that's Norway, possibly the wealthiest country on the planet.  Do you think people in India will be buying an electric cart that costs twice what a gas or diesel burning tuktuk does and count on an unreliable electric grid to be sure it's charged every day??  I'd actually love to be wrong.  I'm convinced there will be a (long) transitional period and during that time there will be a need for oil and gas.

Which conveniently brings me to perhaps the most important component of this thesis.  There is increasing discussion regarding an upcoming supply crunch on oil.  Look at rig counts across North America (there are usually 500+ rigs out completing new wells during "normal" development times.  The rig count is down to something like 75 right now.  This is the case internationally as well.  Exploration and opening of new wells has ground to a standstill the past four months.  The pipeline, if you will, of oil ready to be delivered is limited.  It takes time and money to bring new sources of oil online, it doesn't happen immediately.

If oil use continues its steady increase and draws on current supplies continue to grow (US weekly draw is released every Tuesday after market close).  Eventually usage will be outstripping existing supply and production and prices will rise.  This was eluded to earlier in this thread, O/G follows a rather familiar pattern and we are in the production trough where prices are depressed and production is down.

Then there is the whole cyclical rotation within the stock market thing... How long can tech stocks continue to carry the market?  Some speculate that as investors cool on currently hot sectors (tech, other potentially overbought Covid favored sectors) investors will be looking for areas of opportunity and oil and gas/commodities actually look better than some of the other out of favor segments.  Remember that $40 price floor?

There are several segments within Oil and gas as well, I won't go into all of those specifics, but another, possibly safer option for some O/G exposure is to own a services firm like SLB , BKR or HAL.  I like SLB and their stock is trading at a significant discount now.  There are midstream providers (think pipelines and distribution services) like ET, OKE and MMP.  There are pure natural gas companies and then there are the TANKERS!!

If you have been in O/G for a long time, you are probably like oh, no thank you!  But if you've never owned oil or gas companies, there have probably been much worse times to get in.

Maybe tomorrow I'll write up my oil tanker thesis... actually it's not my thesis, but there are some compelling arguments for owning oil tanker stocks over the next year or longer.  If you want to do homework, start by looking up DHT, EURN, FRO, STNG (but not NAT).
Title: Re: Oil Investing
Post by: waltworks on August 18, 2020, 12:03:09 PM
The entire oil industry is a boom/bust thing. It always has been, and it's not very predictable (my FIL runs a big company that sells equipment for oil extraction so I have had the "opportunity" to hear all about it in great detail over the last 20 years of family reunions/holidays/etc).

I would not touch oil or oil company speculation with a 10 foot pole, personally.

-W
Title: Re: Oil Investing
Post by: trollwithamustache on August 18, 2020, 12:34:25 PM
The entire oil industry is a boom/bust thing. It always has been, and it's not very predictable (my FIL runs a big company that sells equipment for oil extraction so I have had the "opportunity" to hear all about it in great detail over the last 20 years of family reunions/holidays/etc).

I would not touch oil or oil company speculation with a 10 foot pole, personally.

-W

This. Oil Booms and Busts. Hard. It is not clear we are done with the depths of Bust.  Watch the debt levels and How They Hedge. There are hedged companies going bankrupt because oil dropped below the hedge floor and now they owe money on that!
Title: Re: Oil Investing
Post by: Car Jack on August 18, 2020, 04:35:22 PM
The S&P has Exxon/Mobil and Chevron.  Just buy that. 

I'll also propose that you know nothing about how the stocks are going to fare.  I don't either.
Title: Re: Oil Investing
Post by: use2betrix on August 18, 2020, 06:14:24 PM
One thing to keep in mind that oil didn’t just crash due to coronavirus. It crashed weeks before, due to a spat between Russia and Saudi Arabia about reducing output, and in turn they started flooding the market. That crashed the oil prices more than the coronavirus did.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 19, 2020, 10:25:16 AM
One thing to keep in mind that oil didn’t just crash due to coronavirus. It crashed weeks before, due to a spat between Russia and Saudi Arabia about reducing output, and in turn they started flooding the market. That crashed the oil prices more than the coronavirus did.
I didn't know there was any dispute that Covid-19 impacted oil.  Quoting the International Energy Agency (IEA):
"As a consequence of global lockdown measures due to the Covid-19 crisis, mobility – 57% of global oil demand – declined at an unprecedented scale in early 2020."
https://www.iea.org/topics/covid-19
Title: Re: Oil Investing
Post by: bigblock440 on August 19, 2020, 01:48:47 PM
One thing to keep in mind that oil didn’t just crash due to coronavirus. It crashed weeks before, due to a spat between Russia and Saudi Arabia about reducing output, and in turn they started flooding the market. That crashed the oil prices more than the coronavirus did.
I didn't know there was any dispute that Covid-19 impacted oil.  Quoting the International Energy Agency (IEA):
"As a consequence of global lockdown measures due to the Covid-19 crisis, mobility – 57% of global oil demand – declined at an unprecedented scale in early 2020."
https://www.iea.org/topics/covid-19

There isn't, betrix is saying that covid wasn't the only reason, and possibly not even the major reason.  Or is your dispute that the Russia-Saudi overproduction didn't impact the prices?
Title: Re: Oil Investing
Post by: Full_Beard on August 19, 2020, 06:06:03 PM
I agree with Waltworks and even if I didnt, the oil & gas industry is so distasteful, I find it hard to selectively invest in it. Yes, I drive a car and own SP500 index funds, so I'm not going ballistic. But I also wouldn't buy directly tobacco stocks. Besides, there are plenty of other companies that have far better records and aren't oil and gas. Visa and Costco, to name two.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 20, 2020, 02:00:18 AM
Saudi's overproduced 3 mb/d, and the global oversupply was 29 mb/d, or an order of magnitude greater.  The lack of demand during Covid-19 was far more significant than the Saudi-Russia price war.

https://en.wikipedia.org/wiki/2020_Russia%E2%80%93Saudi_Arabia_oil_price_war
"On 10 March, Saudi Arabia announced that it would increase its production from 9.7 million barrels per day to 12.3 million"
https://www.iea.org/reports/oil-market-report-april-2020
"Demand in April is estimated to be 29 mb/d lower than a year ago"
Title: Re: Oil Investing
Post by: waltworks on August 20, 2020, 07:54:36 AM
So put your money down, tell us all about it, and take your licks or make big $. Lots of people follow the oil market a lot more carefully/deeply (many of them with insider information which is pretty standard in the industry). What makes you think you're going to beat them by reading the newspaper and doing some armchair analysis?

I personally think it's 1) a bad idea, 2) a distasteful idea (though of course I own some oil stocks as part of my index funds), and 3) a waste of your time, unless you like to invest as a hobby or something.

-W
Title: Re: Oil Investing
Post by: use2betrix on August 20, 2020, 01:03:11 PM
Saudi's overproduced 3 mb/d, and the global oversupply was 29 mb/d, or an order of magnitude greater.  The lack of demand during Covid-19 was far more significant than the Saudi-Russia price war.

https://en.wikipedia.org/wiki/2020_Russia%E2%80%93Saudi_Arabia_oil_price_war
"On 10 March, Saudi Arabia announced that it would increase its production from 9.7 million barrels per day to 12.3 million"
https://www.iea.org/reports/oil-market-report-april-2020
"Demand in April is estimated to be 29 mb/d lower than a year ago"

Oil Prices opened this year around $60/barrel and dropped below $30/barrel by March 10th. That was weeks before anyone really knew how big of a deal Covid would turn into, especially in the U.S. While it did crash harder by the end of April, Covid is as bad now as it has ever been in the U.S. (in many aspects), and it’s still at around $43/barrel.

I certainly agree that Covid as a whole has hurt it more in terms of demand, but looking strictly at oil prices in comparing the two events, it makes the Russia/Saudi Arabia spat look as significant, if not worse.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 20, 2020, 09:18:44 PM
use2betrix - I appreciate that you're using specific information about oil prices to back up your point.

China started it's lock down on Jan 23, with WTI Brent at $55.59/barrel (oilprice.com) and a week later imposed travel restrictions, reflected in WTI Brent at $50.19 on Feb 3.

I show Brent WTI at $41.46 on March 6 (Fri) and then $34.36 on March 10 (Tue).  Besides the oil price war, Italy had just begun it's lock down.

And then Brent WTI fell further in March, dropping to $20.09 on March 30.  It fell even further to $11.57 on April 11, which looks like the low point (ignoring the fluke of a few negatively priced contracts).

Covid-19 reduced oil demand to the point that land-based oil storage reached capacity, but OPEC+ still refused to stop overproducing.  The U.S. intervened by threatening to leave Saudi Arabia completely undefended if it didn't stop, and that triggered OPEC+ negotiations that cut oversupply (to ~20 mbd oversupply if I recall correctly).

Most of the price change doesn't appear to have happened around Saudi Arabia's announcement of a price war, but rather when China, Europe and the U.S. locked down.


waltworks - I hoped for more than personal opinions.  I do not sit in an armchair reading a newspaper.
Title: Re: Oil Investing
Post by: waltworks on August 20, 2020, 10:29:47 PM
All the information you've posted is public knowledge, though, right? Why do you have special insight into an industry that lots of people devote their professional lives to/gather info on/invest in? The armchair comment was tongue in cheek, as I'm guessing you realized (unless maybe english isn't your first language, in which case I apologize), but it's true - you're an amateur who is taking macro level opensource/newspaper information (unless you've started subscribing to the various expensive oil industry pubs that exist out there and/or hired on at an oil company) and drawing conclusions.

-W

Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 21, 2020, 09:23:06 AM
use2betrix - I probably should have summarized the price movements in my earlier post.

During the first week China locked down, oil prices fell -10%.  With Saudi Arabia's news priced in on March 10, oil prices fell another -40% between March 10 and March 30.
Those drops correspond to lock downs rather than events in the oil price war.

---
The entire world wants to be done with Covid, and a global effort is being made by medical researchers to come up with treatments and vaccines.  To me, that means a recovery from Covid is very likely.  As shown above, oil prices tracked closely with Covid lock downs.  Oil demand dropped, so oil prices dropped.

I believe it's very likely oil demand will continue following Covid.  In the event a recovery is made from Covid, oil demand will recover as well.

The energy sector, including oil and gas, has been doing badly for some time.  So I also view it as a value investment.  The gap between value and growth is at historic levels.  To me, that suggests a reversion to the mean is much more likely than the gap staying historically wide.

So I'm essentially viewing return to normal as an investment.  If value/growth are at a historic gap, energy stocks are doing historically badly... maybe at some point that trend reverses, with a reversion to the mean.  I'm not saying that happens next month, but over the next couple years it seems more likely to happen.
Title: Re: Oil Investing
Post by: PaulMaxime on August 21, 2020, 10:04:34 AM
I think you might be able to make a few short term dollars investing in oil companies. But long term the trend is against you. Solar power is now the cheapest form of power generation. Utility scale battery storage means that solar can work 24/7.

Exxon Mobil recently cut its employees 401K match so they can keep paying their dividend. How long is that going to work? BP is publicly talking about no longer exploring for new sources of oil. All that oil under the Falklands is now a stranded asset.

Sure oil will continue to be a huge part of our energy usage but we've hit peak oil and it ain't coming back. These companies have huge investments in refineries and drilling facilities that will eventually just have to be idled and shut down. A small drop in demand and price will be catastrophic for their profits. We are already seeing this and COVID just accelerated what was already obvious to anyone who really looked at the problem.

I don't short stocks but if I did I'd short big oil. I do track stock picks on Motley Fool Caps. I virtually shorted XOM in 2017 and a bunch of other Oil and Coal and Auto companies since then. So far this has been a virtual money maker for me and I expect it to continue.

https://caps.fool.com/player/dolonaltekar.aspx
Title: Re: Oil Investing
Post by: Scandium on August 21, 2020, 01:56:48 PM
I believe it's very likely oil demand will continue following Covid.  In the event a recovery is made from Covid, oil demand will recover as well.

So will all stocks.. What makes you think:
a) oil will recover more than the market
b) you're the only one seeing this, so it's not already priced in?
Title: Re: Oil Investing
Post by: trollwithamustache on August 21, 2020, 02:33:10 PM
I'm gonna put this here for you lads and ladettes to nosh on.

www.energynet.com

I suspect you want to buy oil companies and not direct ownership in the leases because you don't know how to value the direct ownership...
Title: Re: Oil Investing
Post by: maisymouser on August 21, 2020, 05:07:26 PM
I agree with Waltworks and even if I didnt, the oil & gas industry is so distasteful, I find it hard to selectively invest in it. Yes, I drive a car and own SP500 index funds, so I'm not going ballistic. But I also wouldn't buy directly tobacco stocks. Besides, there are plenty of other companies that have far better records and aren't oil and gas. Visa and Costco, to name two.

This- even if I knew for a fact I would get a good return I would have a hard time justifying to myself that it is "worth it" to specifically and intentionally invest in nonrenewable energy companies. I hear ya OP, you don't want personal opinions- but considering that environmentalism and creating a more sustainable world is one of the key tenants of the MMM ideology I feel it is completely reasonable for @Full_Beard and @waltworks to point this out.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 22, 2020, 01:12:45 AM
https://www.iea.org/reports/global-ev-outlook-2020
"Electric cars, which accounted for 2.6% of global car sales and about 1% of global car stock in 2019, registered a 40% year-on-year increase"

Literally 99% of cars in the world run on gas, not electricity.  I understand people's hopes for the future, but that future is much farther away according to the numbers.


Avoiding oil stocks has no impact on oil companies.  To those who think it's environmental to convince others not to buy oil stocks, that will have no impact.  Meanwhile, all of us read and reply on a forum run on electricity.  In the U.S., 70% of electricity is produced by petroleum and natural gas.  The oil & gas industry is making a very tiny profit off our electricity usage, and ignoring anyone who avoids buying oil & gas stocks.
http://css.umich.edu/factsheets/us-renewable-energy-factsheet
(Similar for 2019, but I prefer a University source of an industry source in this case)


Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 22, 2020, 01:50:01 AM
I believe it's very likely oil demand will continue following Covid.  In the event a recovery is made from Covid, oil demand will recover as well.
So will all stocks.. What makes you think:
a) oil will recover more than the market
b) you're the only one seeing this, so it's not already priced in?
It's not accurate to say all stocks will recover.  Amazon, Netflix and Zoom have all done much better during lock downs, and should lose business during a Covid recovery.

Even limiting to only stocks that haven't recovered, they are down different amounts.  Assuming recovery means returning to 52 week highs, Dine Brands stock (DIN) would almost double from here, while Macy's (M) would almost triple.  Different stocks are down by different amounts, which dramatically impacts their recovery.

---
Year to date (YTD), Vanguard Growth ETF (VUG) is up +17%.
Vanguard Value ETF has dropped, giving a -15% YTD performance.
SPDR S&P 600 Small Cap Value ETF (SLYV) is even worse, at -26% YTD.

Most of the financial news concerns how tech stocks are performing - Apple breaks $2 trillion market cap, or Tesla's 390% YTD return.  And from the above value vs growth performance, anyone chasing performance will be ignoring value.  I've read a couple places that growth and value are at historically wide gaps.  So I think the focus isn't on value stocks, which means it's a less crowded place to invest right now.


Many companies have dramatically lower revenue right now, which is reflected in their stock prices.  Their revenue drop is priced in.  There's also a risk of bankruptcy, which is why I've diversified across dozens of stocks.  If both Congress and the Fed end relief efforts too soon, it would very likely result in a wave of bankruptcies.  So there's a lack of revenue and only government relief keeping company's from going under.

On the flip side, I've repeatedly watched stocks react to vaccine news.  When Moderna started stage III testing, Macy's stock shot up +17% in one day (Moderna's own stock only rose +5%).  Covid sensitive stocks have reacted very strongly to vaccine related news, and I expect more of that news in the next 1-2 months as stage III trials are completed.

Overall I expect recovery profits will outweigh bankruptcy losses.  One flaw might be if that's less true of the energy sector than of the rest of the economy.
Title: Re: Oil Investing
Post by: NN6 on August 22, 2020, 03:27:53 AM
@MustacheAndaHalf I think your reasoning does make a lot of sense for value stocks but I just don't see the case for Oil. If you believe in a vaccine and quick recovery to normal I think Airlines and Cruiseships should be your best bet. If not or you want to be more conservative (like me) I wouldn't touch oil either. For me, as also previously mentioned by others, I am not comfortable with the whole oil industry anyways (maybe due to the fact that I work in renewables) but I honestly believe also from a money perspective that there are better things to buy out there.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on August 22, 2020, 04:46:02 AM
Only a fraction of my portfolio is invested in individual stocks/options, and a smaller fraction of that is invested in oil & gas.  Vanguard Total Stock Market ETF (VTI) holds 2.4% oil & gas stocks.  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.

NN6 - Investing in just airlines and cruise lines lacks diversification in my opinion.  That's why I tried to find stocks in different areas of the market, even if those stocks haven't fallen as far.  I'm seeking to balance the profits from a recovery with diversification from buying unrelated stocks.  Since oil & gas stocks have fallen on hard times, and are a sector of the market, it makes sense to have some exposure.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on September 30, 2020, 11:46:09 AM
An update: Oasis Petroleum just filed for bankruptcy, which was one of my oil stocks.  Of dozens of stocks, both bankruptcies were in oil stocks.

To to those in this thread who suggested oil stocks are a bad investment... yup!

Maybe some of the bankruptcy risk was priced in, as the stock fell -35% today.  I'm surprised I can walk away from bankrupt companies with some of my investment intact, but that's been my experience both times.
Title: Re: Oil Investing
Post by: Rob_bob on September 30, 2020, 07:33:29 PM
An update: Oasis Petroleum just filed for bankruptcy, which was one of my oil stocks.  Of dozens of stocks, both bankruptcies were in oil stocks.

To to those in this thread who suggested oil stocks are a bad investment... yup!

Maybe some of the bankruptcy risk was priced in, as the stock fell -35% today.  I'm surprised I can walk away from bankrupt companies with some of my investment intact, but that's been my experience both times.

I don't think all oil stocks are going bankrupt.  Depends on the quality of the company and what their niche is.
Title: Re: Oil Investing
Post by: maisymouser on September 30, 2020, 08:29:58 PM
An update: Oasis Petroleum just filed for bankruptcy, which was one of my oil stocks.  Of dozens of stocks, both bankruptcies were in oil stocks.

To to those in this thread who suggested oil stocks are a bad investment... yup!

Maybe some of the bankruptcy risk was priced in, as the stock fell -35% today.  I'm surprised I can walk away from bankrupt companies with some of my investment intact, but that's been my experience both times.

Thanks for sharing! Most people aren't willing to post failures in their investment choices. And I had no idea you could recover investments in bankrupt companies.
Title: Re: Oil Investing
Post by: norajean on October 01, 2020, 04:21:02 AM
Business travel and commuting to work may never return to pre COVID levels and thus we may have already seen peak oil demand, as suggested by BP, Oversuppply could depress prices for a long time. Rig counts are low but shale drilling can be resumed almost overnight so supply will follow demand.

In addition to the demand reality, the perception of the industry will depress stock prices regardless of profits and the fact we will all be using oil and gas all our lives in a very slow transition to other energy sources.

I hope oil prices rebound to $200 and people drive even less than today, but I don’t see it happening.
Title: Re: Oil Investing
Post by: markbike528CBX on October 01, 2020, 07:06:18 AM
An update: Oasis Petroleum just filed for bankruptcy, which was one of my oil stocks.  Of dozens of stocks, both bankruptcies were in oil stocks.

To to those in this thread who suggested oil stocks are a bad investment... yup!

Maybe some of the bankruptcy risk was priced in, as the stock fell -35% today.  I'm surprised I can walk away from bankrupt companies with some of my investment intact, but that's been my experience both times.

Thanks for sharing! Most people aren't willing to post failures in their investment choices. And I had no idea you could recover investments in bankrupt companies.

OBELF (was OBE, PWE) Canadian oil, my investment -99% from 2005
TK  oil tanker (with subsidiary LNG tanker) investment -99% from 2005
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 01, 2020, 08:30:00 AM
I suspect my earlier bankruptcy was helped by Robinhood investors flocking to a stock after it went bankrupt.  Back then, the price dropped on bankruptcy news.. and then started moving upwards.  Very odd, but the same thing happened with Hertz, where it was traced to Robinhood investors.

One interesting downside of options vs stocks:  with stocks, I've escaped with a partial loss.  But most bankruptcies take the stock price well below option strike prices, making them lose value much faster.  Options in a bankrupt company are much more likely to be a total loss.

I agree not all oil companies will go bankrupt.  I have call options on two oil stocks and an oil-themed ETF.  An oil ETF offers better diversification than individual oil stocks, although both are still entirely exposed to the oil sector - so most of my portfolio is elsewhere.

My assumption is during a recovery from corona virus, oil demand will also recover, bringing a partial recovery to the oil industry.  But as norajean's post mentions, oil stocks could also continue falling for years.
Title: Re: Oil Investing
Post by: ChpBstrd on October 01, 2020, 11:51:43 AM
Oil is certainly not an inspiring business. A future in which millions of people either work from home or commute in electric cars is seemingly inevitable. I can think of only four upside scenarios for oil:

1) A Middle East war. SA vs. Iran, Iran vs. Israel, or an all-in blitz on Yemen are possibilities.

2) Russian colonization of Venezuela, Syria, and whoever’s next (Brazil?) could create a competitor to OPEC. If this Russian-controlled bloc could cooperate with the Iran/Iraq bloc, the Saudis might fall in line with a plan to crush U.S. or peripheral producers whenever they get too big. In other words, with pricing power concentrated in the hands of just a few leaders, the old defection problems faced by OPEC could be mitigated. Oil investments in any other country would be subject to a higher cost of capital, due to the threat of this newly concentrated cartel.

3) Inflation in the US is allowed to run wild for a couple of years, hitting 5.5% in 2022. Commodities of all types boom in value.

4) Several years of low investment in exploration eventually leads to another oil shortage/ price boom, as has always happened before.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 01, 2020, 10:14:32 PM
ChpBstrd - A future filled with electric cars is decades away.  Electric cars are a tiny percentage of the car market, which itself is a fraction of overall oil consumption.

When Iraq invaded Kuwait, the U.S. went to war with Iraq.  Wouldn't Russia invading an oil-rich South American country be treated similarly?

Where are you getting 5.5% inflation (scenario 3)?
Title: Re: Oil Investing
Post by: ChpBstrd on October 02, 2020, 11:44:18 AM
ChpBstrd - A future filled with electric cars is decades away.  Electric cars are a tiny percentage of the car market, which itself is a fraction of overall oil consumption.

When Iraq invaded Kuwait, the U.S. went to war with Iraq.  Wouldn't Russia invading an oil-rich South American country be treated similarly?

Where are you getting 5.5% inflation (scenario 3)?

It's true that EVs account for only 2.6% of vehicle sales now, but a 2.6% drop in demand in each of the next several years would resemble a minor recession for oil every year for the foreseeable future (most EVs are only a few years old and so the vast majority of those sales are replacing ICE vehicles). The 2008 recession caused about a 10% drop in demand for barrels of oil, and that was enough to cause the price to go from $150 to $35. What will a 10+% drop in demand over the next four (2.6% X 4) years do? And that would be a worst-case scenario where EV sales stay flat from now on.
https://www.forbes.com/sites/michaellynch/2018/01/22/the-effect-of-the-coming-recession-on-the-oil-price/#4b08840d33a9

However.... per the IAEA, sales of EVs increased 40% from 2018 to 2019, so that small 2.6% percentage of car sales number could grow faster than in the past.
https://www.iea.org/reports/global-ev-outlook-2020 (https://www.iea.org/reports/global-ev-outlook-2020)
And the price of lithium ion batteries have been falling for at least a decade.
https://www.statista.com/statistics/883118/global-lithium-ion-battery-pack-costs/  (https://www.statista.com/statistics/883118/global-lithium-ion-battery-pack-costs/)
EVs are getting cheaper and better at a faster rate than ICE vehicles. Even at today's price/performance point, supply seems to be the bottleneck, not demand. Clayton Christensen had a few things to say about this dynamic in The Innovator's Dilemma.

Russia quietly colonized Venezuela in 2019. They have at least a few hundred troops on the ground, and buy discounted oil from Venezuela. The deal is they help protect Maduro from a coup and allow Venezuela to evade sanctions on oil sales in exchange for a growing military presence. Becoming a Russian colony was the best way Maduro could avoid being deposed, just as it was for Bashar al-Assad in Syria (another recent Russian colony). Belarus is next. https://www.vox.com/2019/3/27/18283807/venezuela-russia-troops-trump-maduro-guaido (https://www.vox.com/2019/3/27/18283807/venezuela-russia-troops-trump-maduro-guaido)

5.5% inflation was an unlikely 2-year hypothetical that could boost the price of oil. Had to reach for that one. Although it is technically possible I doubt it.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 04, 2020, 08:00:24 AM
"And that would be a worst-case scenario where EV sales stay flat from now on."

You consider it impossible for EV sales to drop?  That doesn't sound realistic - to rule it out entirely.
 Right now gasoline prices are low, making ICE vehicles more competitive with EV.

I notice you dropped a key part of the quote from iea.com:
"Electric cars, which accounted for 2.6% of global car sales and about 1% of global car stock in 2019, registered a 40% year-on-year increase."

After you buy a car, it still consumes fuel.  You can't cite "global car sales" and ignore "global car stock" in calculating demand.  EV demand is only 1% of cars - and cars aren't the whole story.  Oil is also important for airline, boat and truck fuel.  Overall, EV has an insignificant impact on oil demand right now - far less than 1% when you consider all sources of oil demand.
Title: Re: Oil Investing
Post by: waltworks on October 04, 2020, 09:18:23 AM
The point is that there are lots of plausible scenarios for oil to crash forever... or to skyrocket. EVs might have no impact for 50 years. EVs might kill oil forever. Iran and Saudi Arabia might nuke each other. Or both, or neither.

Just because you can tell yourself a good, logical story doesn't mean it will happen. Predicting the future, it turns out, is really hard.

-W
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 04, 2020, 09:42:07 AM
The point is that there are lots of plausible scenarios for oil to crash forever... or to skyrocket.
No, as the author of this thread, that's not the point.  The point is discussing oil investing.  If you disagree, you don't have to participate.
Title: Re: Oil Investing
Post by: waltworks on October 04, 2020, 09:48:17 AM
I was referring specifically to the discussion between you and @ChpBstrd about EVs, sorry for the confusion.

-W
Title: Re: Oil Investing
Post by: TomTX on October 04, 2020, 07:53:30 PM
I'm gonna put this here for you lads and ladettes to nosh on.

www.energynet.com

I suspect you want to buy oil companies and not direct ownership in the leases because you don't know how to value the direct ownership...

Oh, hell - a noob should NEVER get into leases.

Couple of guys at work (reasonably well paid, single) - decided to buy into some oil leases about 5 years ago. Got all excited about it, then over months the talk died off. Never even made their investment back.
Title: Re: Oil Investing
Post by: UnleashHell on October 05, 2020, 05:31:48 AM
Oh yeah. leases. its where the money is at. I bought into a company that plummeted after deepwater horizon. They had a bunch of leases in the gulf and there was no doubt that they'd make a fortune as soon as drilling reopened.
They didn't have enough cash to get themselves through the ban.
I lost the lot.
lesson learned.
Title: Re: Oil Investing
Post by: theoverlook on October 06, 2020, 07:49:52 AM
ChpBstrd has a very good point, which is that it only takes a small change in oil demand for oil prices to change wildly and thus oil stocks to increase in volatility. When supply and demand have to be matched so well it's easy for one to cause the other to fluctuate very quickly. So a few percent of vehicles converting to EVs will cause at least the portion of oil that transportation uses to quickly reach and oversupply and prices will drop.

It's theoretically possible for EV sales to decrease. It's also possible that everyone will stop buying cars altogether and we'll switch 100% to remote visitation, seems about as likely to me. As a die hard "car guy" (5 cars, from 1970 to 2016 right now) with a relatively recent EV purchase (Well, series hybrid Chevy Volt), I see the writing on the wall for new ICE cars. It's going to happen sooner or later, and with Tesla teasing a $25k electric car, it just might be sooner.

I still just don't think oil stocks are going to outperform the market over any sort of long term timeline.
Title: Re: Oil Investing
Post by: JoeV914 on October 06, 2020, 08:32:20 AM
What’re thoughts on investing in an oil fields?
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 06, 2020, 09:25:39 AM
Overall I'm still well ahead on oil stocks.  Back at the end of march, my two largest individual stock investments were my riskiest - one of them was an oil REIT.  I suppose that's one way to get exposure to oil fields, but since that specific stock recovered rather well already, I no longer hold it.

Notice we don't have 99% of posts talking from combustion vehicles point of view, even though 99% of the cars in the world are gasoline fueled.  That can lead to EV centered views reinforcing each other, which can be bad for accurate predictions.  (Good for the environment, though :)
Title: Re: Oil Investing
Post by: ChpBstrd on October 06, 2020, 11:48:42 AM
The thing is, we can’t buy the oil profits from 20 years ago, or even 5 years ago. We can only buy whatever profits or losses the future provides. The future certainly might look like the past, but why place that bet, with all its downside, in a world full of investment opportunities that are not misaligned with technological, political, and cultural forces?

To be more concrete, why buy an oil stock that might declare bankruptcy in a year unless prices improve, when you could buy a regional bank with a single-digit PE, a 5% yield, and a decent chance of attracting a merger offer? Or profitable REITs yielding 4-8%? Or solar panels and insulation for your home, yielding a 6-7% ROI? Etc.
Title: Re: Oil Investing
Post by: waltworks on October 06, 2020, 11:58:22 AM
Based on other threads, OP just sort of can't help him/herself. But it's better than going to the track or casino, so c'est la vie.

-W
Title: Re: Oil Investing
Post by: PaulMaxime on October 07, 2020, 07:25:35 PM
The thing is, we can’t buy the oil profits from 20 years ago, or even 5 years ago. We can only buy whatever profits or losses the future provides. The future certainly might look like the past, but why place that bet, with all its downside, in a world full of investment opportunities that are not misaligned with technological, political, and cultural forces?

To be more concrete, why buy an oil stock that might declare bankruptcy in a year unless prices improve, when you could buy a regional bank with a single-digit PE, a 5% yield, and a decent chance of attracting a merger offer? Or profitable REITs yielding 4-8%? Or solar panels and insulation for your home, yielding a 6-7% ROI? Etc.

I think this is a great point. Remember that these investments are competing with every other type of investment out there. In my opinion at this point investing in Oil is kind of like "Cigar Butt" investing where you may get a few puffs out of that butt you picked up.

I'd much rather invest in something with a much clearer long term growth path in front of it.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 08, 2020, 09:43:51 AM
From earlier in this thread:
Only a fraction of my portfolio is invested in individual stocks/options, and a smaller fraction of that is invested in oil & gas.  Vanguard Total Stock Market ETF (VTI) holds 2.4% oil & gas stocks.  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.
waltworks - Index funds are a good investment, but they hold 2.4% oil & gas stocks.  Is 2.4% a sane holding but 6% is out of control?

ChpBstrd - Would a cigar butt industry have growing demand every year since the 2008 financial crisis?

Oil prices plummeted during lockdowns, showing the correlation between oil and Covid-19.  The pandemic is still keeping oil demand much lower than normal, which is reflected in oil prices.  Without predicting 5 years from now, what happens if oil demand recovers?

Vanguard Energy ETF is rather volatile.  Years like 2013 and 2016 have profits in the 26% to 29% range.  But there's years like 2015 or 2018 with 23% or 20% losses.  This year, Vanguard Energy ETF is down 48% year to date.

Covid dropped demand for oil, and oil companies took a hit to their stock price.  At some future point when Covid-19 ends, oil demand would rebound to previous levels.  Shouldn't the price of oil company stocks also rebound?
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 08, 2020, 11:33:57 AM
Just to make this concrete, I own call options on the following ETF:
SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

During Covid-19, oil has been strongly impacted by Covid-19 and especially lockdowns.  Oil demand is lower than normal, and during a Covid recovery I would expect it to return to normal.  XOP has a 52 week range of $30 (March) to $98 (last year).  I believe that just as oil stocks dropped during Covid, they will partially recover alongside Covid.

Buying a "$45 call option" captures the all the profit above $45.  It has some time value, but if the stock never goes above $45 that option would expire worthless.  Buying an option like that which expires in Jan 20, 2023 costs 1/4th of the stock price right now.  If oil stocks go up +25% in 2.3 years, the option breaks even.

I view this as having two ways of making money:
* Recovery from Covid-19 occurs, and oil demand returns.  Oil companies make money selling oil, so low demand means lower profits and a lower stock price.  But when oil demand returns, their profits return, and so should their stock price.
* Oil company stocks might revert to the mean.  XOP's average price is closer to $150 over the past 14 years (Yahoo's maximum data), with a peak of $330.  If the oil industry randomly heads upwards, there's a lot of room.

To me, an oil stock ETF like XOP diversifies across dozens of oil companies, which spreads the bankruptcy risk.  There's upside with a Covid recovery, or from oil stocks reverting to the mean.
Title: Re: Oil Investing
Post by: Jeferson on October 08, 2020, 02:32:02 PM
I agree with you, investing in oil is very risky atm and it does not seem like this trend is going to change anytime soon (especially now, when everyone is staking at home). One could also day trade oil (https://tradingbeasts.com/commodity-trading-guide-for-beginners-the-basics/), but this is probably only for experienced traders. And from what I heard, most people actually lose money on day trading.
Title: Re: Oil Investing
Post by: TomTX on October 09, 2020, 09:07:20 AM
What’re thoughts on investing in an oil fields?

Great way to have your money looted by an experienced operator.
Title: Re: Oil Investing
Post by: trollwithamustache on October 12, 2020, 12:05:30 PM
What’re thoughts on investing in an oil fields?

Great way to have your money looted by an experienced operator.

certainly this is true for the publicly traded royalty trusts! Do you think that direct held mineral rights are also treated badly?  I only have very limited info from some guys who run a fund that owns mineral rights.
Title: Re: Oil Investing
Post by: TomTX on October 12, 2020, 05:42:11 PM
What’re thoughts on investing in an oil fields?

Great way to have your money looted by an experienced operator.

certainly this is true for the publicly traded royalty trusts! Do you think that direct held mineral rights are also treated badly?  I only have very limited info from some guys who run a fund that owns mineral rights.

Unless you're talking about land where you already own mineral rights....

Great way to have your money looted by an experienced operator.

The oil patch is not kind to noobs with money to invest. Heck, experienced investment banks often get screwed over.
Title: Re: Oil Investing
Post by: waltworks on October 12, 2020, 06:34:23 PM
I once suggested that I could (due to my pseudo insider info) invest in oil leases, companies, futures, etc to my FIL.

He compared this idea to (and I roughly quote), "taking acid and trying to win carnival games".

-W
Title: Re: Oil Investing
Post by: brellis1vt on October 13, 2020, 08:16:44 AM
I work in the industry (primarily on the gas side) and I don't consider O&G investible.  There will be some good moments but the long term trend will be more negative especially as we move to electric vehicles.  Fracking makes bringing new production on very easy.  So if you get higher prices at all the market will get flooded again.
Title: Re: Oil Investing
Post by: bthewalls on October 13, 2020, 03:46:59 PM
Previously mentioned Vanguard Energy ETF.....I’ve been buying It this past while as it’s so low and going Lower.

Seems like a nobrainer since post Covid it’s likely to rebound

Anyone else buying similar.?

Barry
Title: Re: Oil Investing
Post by: blue_green_sparks on October 13, 2020, 04:01:10 PM
Previously mentioned Vanguard Energy ETF.....I’ve been buying It this past while as it’s so low and going Lower.

Seems like a nobrainer since post Covid it’s likely to rebound

Anyone else buying similar.?

Barry
Yeah, I bought a little bit of VDE. When it comes back I'll swap it for a green energy ETF.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 14, 2020, 10:36:23 AM
I work in the industry (primarily on the gas side) and I don't consider O&G investible.  There will be some good moments but the long term trend will be more negative especially as we move to electric vehicles.  Fracking makes bringing new production on very easy.  So if you get higher prices at all the market will get flooded again.
Fracking ramped up rapidly from 2005-2012, and there has definitely been bad years for the energy sector since that time.  So fracking impacting oil & gas profits makes sense, and fits the data.

The largest past stock drop for Vanguard Energy was in 2008 when it lost -43%.  On either side of that loss were +37% and +38% years for energy stocks.

In 2020 so far, Vanguard Energy mutual fund has dropped -39%.  That's under current circumstances, with oil demand at a low point.  To drop further, something has to get worse - from the current situation.

Oil demand rises every year, and I would guess energy demand is the same.  A recovery, at some point, means energy demand back to normal - back to before the -39% drop.  To me the question is over what time frame that recovery occurs, and if it's worth waiting.
Title: Re: Oil Investing
Post by: WoodsRun on October 14, 2020, 01:48:36 PM
I just started a position in VGENX today equivalent to about 5% of my portfolio. If it goes even lower as the year comes to a close I will definitely add. Energy at the moment is probably one of the most under-valued sectors. The reason energy is so low now is because of COVID as a previous poster has mentioned not because of a rise in EV sales (not yet). When the pandemic is over in about a year or two energy demand will go back to at least 2019 levels if not higher.

In about five years or when I feel energy has bounced back tremendously I might take a look at moving whatever is left in VGENX into something less risky (such as VTSAX or VTIAX).
Title: Re: Oil Investing
Post by: brellis1vt on October 14, 2020, 02:07:26 PM


I work in the industry (primarily on the gas side) and I don't consider O&G investible.  There will be some good moments but the long term trend will be more negative especially as we move to electric vehicles.  Fracking makes bringing new production on very easy.  So if you get higher prices at all the market will get flooded again.
Fracking ramped up rapidly from 2005-2012, and there has definitely been bad years for the energy sector since that time.  So fracking impacting oil & gas profits makes sense, and fits the data.

The largest past stock drop for Vanguard Energy was in 2008 when it lost -43%.  On either side of that loss were +37% and +38% years for energy stocks.

In 2020 so far, Vanguard Energy mutual fund has dropped -39%.  That's under current circumstances, with oil demand at a low point.  To drop further, something has to get worse - from the current situation.

Oil demand rises every year, and I would guess energy demand is the same.  A recovery, at some point, means energy demand back to normal - back to before the -39% drop.  To me the question is over what time frame that recovery occurs, and if it's worth waiting.

I agree with you there is a decent chance of short term gain (12 months) but overall the trajectory for pricing and value is lower.  I've been personally burned on investments every time I didn't exit after there were quick gains.  I don't agree on the oil demand rising every year though.  BP and others are releasing research that states we have already hit peak demand or are close.  From an economics standpoint think of it this way.  The energy equivalent for 1 bbl of oil cost $12-$18 for natural gas.  There are a lot of economic reasons to switch away from oil now.  For the timing aspect, based on my research, consumer demand is almost back to what it was.  It’s the rest of the demand that is off and the people I have followed are predicting it won't come back till mid 2021.
Title: Re: Oil Investing
Post by: Imanuels on October 15, 2020, 01:41:56 AM
Apparently Vanguard recongizes that the future might look different:
“Vanguard Energy Fund will increase exposure to utilities stocks starting in late 2020 as it adapts to the energy sector’s evolution away from fossil fuels and toward renewable energy sources.”
https://www.thinkadvisor.com/2020/08/24/vanguard-changes-energy-funds-benchmark-portfolio-products/
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 15, 2020, 07:53:49 AM
Imanuels - Note that VGENX is an actively managed fund, which is why you'd pay a 0.32% expense ratio versus 0.10% at VDE (Vanguard Energy ETF).  I have to admit, I'm impressed that fund has a history going back to 1985.

brellis1vt - I've seen reports that show oil demand rose every one of the past ~15 years except in 2009 (during the great financial crisis).  But here's something more recent from IEA, which shows two things of interest: first, the growth in oil demand per year 2011-2019, where growth is positive every year.  So oil demand has been growing every year for the past decade.  And second, the prediction for 2020 and 2021: negative growth in 2020, followed by catch up growth in 2021.
https://www.iea.org/reports/oil-2020

That reinforces my idea of a recovery in demand causing a spike, although I'd also be interested in other predictions that contradict the information I have.
Title: Re: Oil Investing
Post by: bthewalls on October 16, 2020, 10:35:16 AM
i think its fair to say that the world economy isnt going to wean of oil consumption any time soon, post current covid slump.

If alpha is goal, running parellel to overall index funds, why arent we all buying these currently crippled stocks at the moment?

Also some renewables are on the increase (Ive some REGI), so best of both worlds?

It great seeing the world going to electric cars, but its not going to happen all within a decade.

Interested to see if any errors in my theory guy, so feel free?

Barry
Title: Re: Oil Investing
Post by: TomTX on October 16, 2020, 01:38:12 PM
It great seeing the world going to electric cars, but its not going to happen all within a decade.

A decade is a long time when you have an industry disruption underway.

A decade ago, Tesla was hand-building a few hundred Roadsters per year. This year they will be producing roughly 1000x as many, even with the COVID-19 delays. By early 2021, they should have doubled capacity at Giga Shanghai. Sometime in 2021 we should also see production from Giga Berlin, Giga Austin and a production overhaul/upgrade at Fremont.  Giga Austin is slated to ramp up to producing 200GWh of batteries every year to feed Cybertruck, Semi and Model Y sales.

A decade ago, the only medium to large car manufacturer trying to sell an electric car was Nissan with the first few Leaf deliveries. Today, most major manufacturers are investing billions (or tens of billions) to shift to electric vehicles and the major battery suppliers are all ramping to hundreds of GWh/yr capacity. Each.
Title: Re: Oil Investing
Post by: bthewalls on October 16, 2020, 02:27:24 PM
It great seeing the world going to electric cars, but its not going to happen all within a decade.

A decade is a long time when you have an industry disruption underway.

A decade ago, Tesla was hand-building a few hundred Roadsters per year. This year they will be producing roughly 1000x as many, even with the COVID-19 delays. By early 2021, they should have doubled capacity at Giga Shanghai. Sometime in 2021 we should also see production from Giga Berlin, Giga Austin and a production overhaul/upgrade at Fremont.  Giga Austin is slated to ramp up to producing 200GWh of batteries every year to feed Cybertruck, Semi and Model Y sales.

A decade ago, the only medium to large car manufacturer trying to sell an electric car was Nissan with the first few Leaf deliveries. Today, most major manufacturers are investing billions (or tens of billions) to shift to electric vehicles and the major battery suppliers are all ramping to hundreds of GWh/yr capacity. Each.

good point...glad im in telsa!
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 17, 2020, 01:51:10 AM
It great seeing the world going to electric cars, but its not going to happen all within a decade.
A decade is a long time when you have an industry disruption underway.

A decade ago, Tesla was hand-building a few hundred Roadsters per year. This year they will be producing roughly 1000x as many, even with the COVID-19 delays. By early 2021, they should have doubled capacity at Giga Shanghai. Sometime in 2021 we should also see production from Giga Berlin, Giga Austin and a production overhaul/upgrade at Fremont.  Giga Austin is slated to ramp up to producing 200GWh of batteries every year to feed Cybertruck, Semi and Model Y sales.

A decade ago, the only medium to large car manufacturer trying to sell an electric car was Nissan with the first few Leaf deliveries. Today, most major manufacturers are investing billions (or tens of billions) to shift to electric vehicles and the major battery suppliers are all ramping to hundreds of GWh/yr capacity. Each.
Electric vehicles are 1% of the global car fleet.  However much you want to emphasize Tesla's achievements, they don't amount to much in terms of oil consumption.

In terms of oil, Tesla has made a good start, but they have not changed the world.  Elon Musk himself said if all car production switched to 100% electric vehicles today, it would still take 20 years to replace all of the gas fueled vehicles.  So Tesla's founder and CEO says it won't happen in 20 years if everyone gave it 100%.  You can look for "elon musk pot interview" - it was before he lit up.


If alpha is goal, running parellel to overall index funds, why arent we all buying these currently crippled stocks at the moment?
Some beaten down stocks could go bankrupt, which might scare people away.  Behavioral science has studied how people weigh losses and gains, and discovered people dislike a loss twice as much as they like a gain.  That risk of bankruptcy is probably keeping most investors away.

There's also uncertainty around the timing of a recovery.  A vaccine will probably prove successful in the next 1-2 months, but the story doesn't end there.  The vaccine's protection or effectiveness matters: what percentage of people are prevented from getting sick?  What problems are encountered with manufacturing hundreds of millions of doses (the U.S. will likely get the first doses of vaccine, while billions of doses will take longer).  And what percent of people get immunized?

Another consideration: the retail sector has already recovered.  If you look at SPDR S&P Retail ETF (XRT), it's 3 month performance is +44% (Yahoo Finance), and it's up +3% since 12 months ago.  So without looking at individual stocks, investors might not even discover that some stocks are struggling.
Title: Re: Oil Investing
Post by: TomTX on October 17, 2020, 10:58:33 AM
It great seeing the world going to electric cars, but its not going to happen all within a decade.
A decade is a long time when you have an industry disruption underway.

A decade ago, Tesla was hand-building a few hundred Roadsters per year. This year they will be producing roughly 1000x as many, even with the COVID-19 delays. By early 2021, they should have doubled capacity at Giga Shanghai. Sometime in 2021 we should also see production from Giga Berlin, Giga Austin and a production overhaul/upgrade at Fremont.  Giga Austin is slated to ramp up to producing 200GWh of batteries every year to feed Cybertruck, Semi and Model Y sales.

A decade ago, the only medium to large car manufacturer trying to sell an electric car was Nissan with the first few Leaf deliveries. Today, most major manufacturers are investing billions (or tens of billions) to shift to electric vehicles and the major battery suppliers are all ramping to hundreds of GWh/yr capacity. Each.
Electric vehicles are 1% of the global car fleet.  However much you want to emphasize Tesla's achievements, they don't amount to much in terms of oil consumption.

The context was the next decade, not current status.

Quick question: While 1% is tiny, what's 1% x 1,000?

...now, that's likely an overestimate. If we take Tesla's growth rate since the release of the Model S (first assembly line) - while there is year-to-year variance, the long term growth rate is over 50% per year.

Presume 2020 production of 480k, slightly conservative estimate. Project a mildly lower growth rate forward at 50% annual.

It reaches large numbers rather quickly.  I don't want to spoil the surprise.

Will this happen? Perhaps not - but someone investing in oil really needs to figure out why the trend would change, especially when BEV prices should hit equivalent to mainstream fossil vehicles within a few years. Keep in mind that numerous investors have been saying for quite a few years that Tesla can't possibly keep up their growth rate - the next few years appear to already be set up with new and upgraded factories. Giga Austin alone is slated for 200GWh of battery production a year.
Title: Re: Oil Investing
Post by: PaulMaxime on October 17, 2020, 09:22:33 PM
Human beings aren't good with exponential growth rates. Technology doesn't change linearly - it follows an exponential S curve.

If I asked you to compute 7 + 7 + 7 + 7 + 7 in your head you could do it easily, but 7 * 7 * 7 * 7 * 7 is far more difficult.

I can't recommend this talk by Tony Seba enough. https://www.youtube.com/watch?v=O-kbzfWzvSI

The first couple minutes he talks about two pictures of New York city in 1900 and 1913. In the 1900 photo there are a lot of horse drawn carriages and a single car. By 1913 there is only 1 horse in a sea of cars. 13 years.

And technology transformation is happening much faster these days than it was back then. I wouldn't be surprised to see 100% of new cars being electric in 10 years.
Title: Re: Oil Investing
Post by: TomTX on October 18, 2020, 05:42:01 AM
Yes, Tony has been giving variants of that talk for years - the neat thing about the current ones is that he can show how close reality is matching his predictions from 2014(?). Spoiler: It's pretty close.

I'll note that he's typically not talking about 100% adoption rates when he gives timeframes, it's more to somewhere around 80% adoption. That's when the S curve starts to flatten out again.

For me the adoption of EVs appears inevitable and rapidly increasing. The real wild card for oil demand is when EVs take over the ridesharing/taxi market and when automation of that market happens. It doesn't matter if EVs only have 10% of the fleet if they have 90% of the vehicle miles driven.

This video below is slightly more recent and an interview format for those who either prefer that over the lecture/TED talk style - or just want some more Tony Seba after the first one.

https://www.youtube.com/watch?v=mGzrcmDrFfo
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 19, 2020, 10:17:58 AM
TomTX - This thread is about oil investing over the next year or two.  For that purpose, Tesla isn't relevant over the next 2 years.  You replied to one sentence about this decade, and now are talking about the next decade - you seem to be hijacking this thread, when there's already a thread about Tesla on the forum.

PaulMaxine - You can explain that over in the thread about Tesla, but it's not relevant in the next two years.
Title: Re: Oil Investing
Post by: PaulMaxime on October 20, 2020, 09:18:38 PM
TomTX - This thread is about oil investing over the next year or two.  For that purpose, Tesla isn't relevant over the next 2 years.  You replied to one sentence about this decade, and now are talking about the next decade - you seem to be hijacking this thread, when there's already a thread about Tesla on the forum.

PaulMaxine - You can explain that over in the thread about Tesla, but it's not relevant in the next two years.

I actually disagree. I think you are seeing the end of the growth of oil as a good investment. I suggest that it's time to look elsewhere and that time is now.
Title: Re: Oil Investing
Post by: brellis1vt on October 21, 2020, 06:47:15 AM
Imanuels - Note that VGENX is an actively managed fund, which is why you'd pay a 0.32% expense ratio versus 0.10% at VDE (Vanguard Energy ETF).  I have to admit, I'm impressed that fund has a history going back to 1985.

brellis1vt - I've seen reports that show oil demand rose every one of the past ~15 years except in 2009 (during the great financial crisis).  But here's something more recent from IEA, which shows two things of interest: first, the growth in oil demand per year 2011-2019, where growth is positive every year.  So oil demand has been growing every year for the past decade.  And second, the prediction for 2020 and 2021: negative growth in 2020, followed by catch up growth in 2021.
https://www.iea.org/reports/oil-2020

That reinforces my idea of a recovery in demand causing a spike, although I'd also be interested in other predictions that contradict the information I have.

I think we are looking at different time horizons (mine is 5-10 years) but I recommend looking at BP's energy outlook: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2020.pdf
On page 65 they list this: The level of oil demand in both Rapid and Net Zero (their models) does not fully recover from the sharp drop caused by Covid-19, with demand falling by around 50% by 2050 in Rapid and almost 80% in Net Zero. The outlook for oil is more resilient in BAU, with demand in 2050 declining slightly from its current level (pp 66-67).
Title: Re: Oil Investing
Post by: ChpBstrd on October 21, 2020, 07:29:04 AM
I think to summarize the above:

It would be easier for an industry with good long-term prospects to do well in the next 2ish years than an industry with poor long-term prospects.
Title: Re: Oil Investing
Post by: TomTX on October 21, 2020, 10:51:35 AM
TomTX - This thread is about oil investing over the next year or two.  For that purpose, Tesla isn't relevant over the next 2 years.  You replied to one sentence about this decade, and now are talking about the next decade - you seem to be hijacking this thread, when there's already a thread about Tesla on the forum.

PaulMaxine - You can explain that over in the thread about Tesla, but it's not relevant in the next two years.

I reject your presumptions three different ways:

1) Talking about the biggest threat/downside potential to an investment is extremely relevant. Ignoring it is dumb, especially when the threat is already happening.

2) I'm talking about the upcoming decade (ie, 2020-2030) which is the timeframe specified by you. It appears you didn't do the simple calculation of growth I suggested.

3) 1-2 years sounds like you're a gambler, not an investor. Perhaps your approach would be more suitable for discussion somewhere like r/wallstreetbets
Title: Re: Oil Investing
Post by: PaulMaxime on October 21, 2020, 01:06:50 PM
TomTX - This thread is about oil investing over the next year or two.  For that purpose, Tesla isn't relevant over the next 2 years.  You replied to one sentence about this decade, and now are talking about the next decade - you seem to be hijacking this thread, when there's already a thread about Tesla on the forum.

PaulMaxine - You can explain that over in the thread about Tesla, but it's not relevant in the next two years.

I reject your presumptions three different ways:

1) Talking about the biggest threat/downside potential to an investment is extremely relevant. Ignoring it is dumb, especially when the threat is already happening.

2) I'm talking about the upcoming decade (ie, 2020-2030) which is the timeframe specified by you. It appears you didn't do the simple calculation of growth I suggested.

3) 1-2 years sounds like you're a gambler, not an investor. Perhaps your approach would be more suitable for discussion somewhere like r/wallstreetbets

I think it's OK to disagree about this. It's what makes a market.

No reason to stoop to insults. If you think oil is going to be a good investment over the next 10 years, great. Put your money there.

Personally as a long term investor I see nothing besides pain for the Oil industry starting now and going forward. I'm staying away. I think the end is coming much faster than the incumbents predict - creative destruction is on its way.

We will certainly be using fossil fuels as far into the future as the eye can see, but it's not going to be a growth investment, IMHO. I'm putting my money in other things.
Title: Re: Oil Investing
Post by: norajean on October 22, 2020, 09:36:30 AM
People have been saying coal is dead since oil first boomed 100 years ago. Guess what? Global coal consumption is currently at an all time historic high. Forecasts for development indicated that even with modest growth all forms of energy will need to increase to meet demand but there will still be a shortfall as India and China gentrify and a few billions people expect electricity etc.
Title: Re: Oil Investing
Post by: PaulMaxime on October 22, 2020, 03:19:48 PM
People have been saying coal is dead since oil first boomed 100 years ago. Guess what? Global coal consumption is currently at an all time historic high. Forecasts for development indicated that even with modest growth all forms of energy will need to increase to meet demand but there will still be a shortfall as India and China gentrify and a few billions people expect electricity etc.

https://yearbook.enerdata.net/coal-lignite/coal-world-consumption-data.html

New decline in global coal consumption (-2.6%) despite growth in China (+1%)
After two years of recovery, global coal consumption declined again in 2019 (-2.6%). Public and private climate policies, combined with competition from cheaper gas-fired and renewable power generation have accelerated the closure of many coal-fired power plants and resulted in dramatic cuts in coal consumption in the EU (-18%, including significant drops in Germany, Poland and Spain) and in the USA (-12%, where nearly 14 GW of coal-fired power capacity was retired in 2019).
Coal consumption grew by 1% in China, which accounts for half of the global coal demand. The Chinese government aims at substituting coal use with gas and renewables but the coal-to-gas conversion policy relaxed in 2019.
In India, the second largest coal consumer worldwide, coal consumption declined by 3.4%, due to higher hydropower and renewable generation that cut coal needs in the power sector.
Coal consumption slowed down in Indonesia (+8.9%, i.e. half its 2018 growth), and decreased in South Korea and Japan, due to a lower demand from the power sector (reduced electricity consumption, nuclear competition, and air pollution constraints).
It also slowed down in large coal producing countries such as Russia (coal-to-gas switch in the power sector) and South Africa (reduced operations at coal-fired power plants due to technical issues) and even contracted in Australia and Turkey.


So it looks like it peaked in 2013 and is slowly dropping. We'll see where it goes from here.
Title: Re: Oil Investing
Post by: norajean on October 22, 2020, 03:43:10 PM
Coal production is approximately 10 times higher today than it was when the oil revolution began and people predicted the demise of coal.  Fluctuations the last 10 years are noise.
Title: Re: Oil Investing
Post by: TomTX on October 22, 2020, 07:21:35 PM
Coal production is approximately 10 times higher today than it was when the oil revolution began and people predicted the demise of coal.  Fluctuations the last 10 years are noise.

What "people" made this prediction? Making vague claims that some handful of people out of billions made some prediction isn't very compelling.

Oil is not an obvious substitute for coal usage, especially early in the oil era.  Natural gas to some extent displaced coal use (replacing "town gas" of CO + H2 synthesized from coal).

In contrast the BEV is a direct displacement of oil usage at nearly a 1:1 ratio.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 23, 2020, 11:36:44 AM
TomTX - Did you ignore the start of this thread entirely?  I said I'm investing for Covid recovery in the very first post, when I created this thread.  That shouldn't be a surprise, nor should it require insults and suggestions I leave the thread which I created.  If you don't like my topic, you are free to create your own.

norajean - It's a thread about oil investing, not coal.

PaulMaxine - But to get back to oil consumption, here's links showing rising oil consumption:

"world consumption", by a .gov website, showing increases since 2015:
https://www.eia.gov/outlooks/steo/report/global_oil.php

"World Consumption of Oil", showing annual increases since the 1980s:
https://www.worldometers.info/oil/

"World oil supply and demand" showing rising demand since the 1980s:
https://www.iea.org/reports/oil-information-overview
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 23, 2020, 11:47:41 AM
Here's how I ended the first post in this thread:
I suppose the question is after corona virus (whenever that is), should I hang on to oil stocks / options or cash out?

My investments were originally a mix of stocks and options, but are now 100% options.  Options have an expiration date, so I need to decide if I hold those options after a recovery or sell them.  Projections for a Covid-19 recovery range from mid-2021 to early 2022, which assumes vaccines and treatments are mass produced and have a significant impact.

Here's the upcoming events where I expect to make a decision to sell or not:
* first vaccine succeeds in phase III trials, and efficiency is known
* a vaccine with 50%+ effectiveness gets FDA approval
* production and delivery of vaccines - better than expected?  slower?
* willingness to get vaccinated (10% anti-vax, higher distrust of new vaccine)
* reopening of economy as vaccines roll out

I believe most people overestimate vaccine effectiveness.  That suggests the first successful vaccine will be met with excessive optimism.  So maybe that's one decision point.

Polls show unwillingness to take the vaccine - but that's with current information.  The high priority group includes doctors, who will get vaccinated (since they're at higher risk) before the general population.  That means people can ask their doctor about the vaccine, and most doctors can honestly say they had the vaccine already.  Current estimates of participation (50%?) are likely a gross under-estimate.  Maybe it's worth waiting for this point, before selling.





Title: Re: Oil Investing
Post by: TomTX on October 23, 2020, 03:47:14 PM
TomTX - <snip> If you don't like my topic, you are free to create your own.

And if you don't like the direction the thread has taken, you are free to leave. You do not own the discussion because you started the thread.

Facepunches are a way of life around here. If you get insulted, it's your own problem.

Gambling on the oil industry is... gambling. Betting on short-term moves is not investing. You may win short-term, but the odds are against you - especially as someone new to the field.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 24, 2020, 01:03:39 AM
TomTX - You mean the direction you hijacked the thread towards?  You brought up Tesla, when it wasn't relevant to investing in oil until a Covid recovery.  You're the one bringing up the future decades of oil.  The "thread" hasn't taken a new direction - you have.  Look at the discussion before you showed up, for example.

Someone selling their investments within 2 years doesn't need to consider the 20 year picture.  I won't be investing in oil over the time frames you've mentioned.  Which brings me to your main debate style - insulting me as "dumb" and labeling actions as "gambling" without backing up your points with any information or detail.  If you only throw insults, that's not a facepunch, that's just insulting people.

Like my recent post, why is investing in oil stock options until a Covid recovery considered a bad move?

The time frame is less than 2 years, so the situation 20 years from now isn't relevant.  What's relevant is how much Covid recovery will impact oil stocks.  I claim those companies will see revenues return to normal, and their stock price will return to normal as a result.
Title: Re: Oil Investing
Post by: norajean on October 24, 2020, 05:28:15 AM
One of the bigger clues that oil company stocks are going to be lower for longer is the unprecedented cuts announced by Exxon. The company is perennially long range and can weather most downturns. Two years is nothing for them; they could fund the dividend from debt for much longer. They are investing in huge long term projects now. For them to accept the market has changed forever and start cutting is very telling. A vaccine will slowly restore partial demand over perhaps five years. Then the industry is back to the shale oil oversupply situation which preceded the virus. Alternative energy doesn’t threaten oil and gas, but the perception it could dampens the stock values even when profits are high.
Title: Re: Oil Investing
Post by: TomTX on October 24, 2020, 05:33:49 AM
You know, I'd let it slide if you weren't lying about what I posted.

I suppose you could be so misinformed that you think calling an action dumb is the same thing as calling a person dumb. 

So which is it? Deliberate lying or unable to parse the difference?
Title: Re: Oil Investing
Post by: PaulMaxime on October 24, 2020, 10:19:22 AM
One of the bigger clues that oil company stocks are going to be lower for longer is the unprecedented cuts announced by Exxon. The company is perennially long range and can weather most downturns. Two years is nothing for them; they could fund the dividend from debt for much longer. They are investing in huge long term projects now. For them to accept the market has changed forever and start cutting is very telling. A vaccine will slowly restore partial demand over perhaps five years. Then the industry is back to the shale oil oversupply situation which preceded the virus. Alternative energy doesn’t threaten oil and gas, but the perception it could dampens the stock values even when profits are high.

XOM getting removed from the Dow was a pretty big deal, IMHO. Their stock peaked in 2014 and has been dropping significantly since then.

In my opinion the energy system is in transition and we are going to see more disruption.

Solar energy is the now cheapest form of electricity. More and more energy supply is coming on line in different forms: Wind, Solar, etc.  It seems that the laws of supply and demand mean that more availability of energy would lead to lower prices over time.

Title: Re: Oil Investing
Post by: TomTX on October 24, 2020, 04:27:56 PM
One of the bigger clues that oil company stocks are going to be lower for longer is the unprecedented cuts announced by Exxon. The company is perennially long range and can weather most downturns. Two years is nothing for them; they could fund the dividend from debt for much longer. They are investing in huge long term projects now. For them to accept the market has changed forever and start cutting is very telling. A vaccine will slowly restore partial demand over perhaps five years. Then the industry is back to the shale oil oversupply situation which preceded the virus. Alternative energy doesn’t threaten oil and gas, but the perception it could dampens the stock values even when profits are high.

XOM getting removed from the Dow was a pretty big deal, IMHO. Their stock peaked in 2014 and has been dropping significantly since then.

In my opinion the energy system is in transition and we are going to see more disruption.

Solar energy is the now cheapest form of electricity. More and more energy supply is coming on line in different forms: Wind, Solar, etc.  It seems that the laws of supply and demand mean that more availability of energy would lead to lower prices over time.
Yes, and that transition looks like it is about to accelerate. Texas (ERCOT) has a grid with annual peak demand around 75GW. There's already ~25GW of wind and ~3GW of solar on the grid. However, if you look at projects applying for approval/construction with ERCOT, there's another 24GW of wind and 77GW of solar in the pipeline, plus 18GW of storage (mostly batteries, and mostly in conjunction with a wind or solar project) with some pretty large completions scheduled for 2021 and 2022.

This doesn't directly affect oil per se, but it will significantly undercut XOM and other "oil majors" because they are in the oil and gas industry. Most wells in Texas produce both. These moves will significantly undercut gas usage.

Note this is just an example: Wind, solar and batteries are now cheap enough for widespread deployment over the next few years - and faster if the Democrats take the Presidency and Senate (which looks 75% probable) - have a look at Biden's climate plan. It does not bode well for the oil and gas industry.

Edit: Looked up the actual ERCOT numbers as of end-of-September, tweaked above to be more precise.
Title: Re: Oil Investing
Post by: norajean on October 24, 2020, 06:27:13 PM
One of the bigger clues that oil company stocks are going to be lower for longer is the unprecedented cuts announced by Exxon. The company is perennially long range and can weather most downturns. Two years is nothing for them; they could fund the dividend from debt for much longer. They are investing in huge long term projects now. For them to accept the market has changed forever and start cutting is very telling. A vaccine will slowly restore partial demand over perhaps five years. Then the industry is back to the shale oil oversupply situation which preceded the virus. Alternative energy doesn’t threaten oil and gas, but the perception it could dampens the stock values even when profits are high.

XOM getting removed from the Dow was a pretty big deal, IMHO. Their stock peaked in 2014 and has been dropping significantly since then.

In my opinion the energy system is in transition and we are going to see more disruption.

Solar energy is the now cheapest form of electricity. More and more energy supply is coming on line in different forms: Wind, Solar, etc.  It seems that the laws of supply and demand mean that more availability of energy would lead to lower prices over time.
Yes, and that transition looks like it is about to accelerate. Texas (ERCOT) has a grid with annual peak demand around 75GW. There's already ~25GW of wind and ~3GW of solar on the grid. However, if you look at projects applying for approval/construction with ERCOT, there's another 24GW of wind and 77GW of solar in the pipeline, plus 18GW of storage (mostly batteries, and mostly in conjunction with a wind or solar project) with some pretty large completions scheduled for 2021 and 2022.

This doesn't directly affect oil per se, but it will significantly undercut XOM and other "oil majors" because they are in the oil and gas industry. Most wells in Texas produce both. These moves will significantly undercut gas usage.

Note this is just an example: Wind, solar and batteries are now cheap enough for widespread deployment over the next few years - and faster if the Democrats take the Presidency and Senate (which looks 75% probable) - have a look at Biden's climate plan. It does not bode well for the oil and gas industry.

Edit: Looked up the actual ERCOT numbers as of end-of-September, tweaked above to be more precise.

Gas prices in Texas are already so low as to be negligible and even negative in some instances (producers paying for gas disposal because it is cheaper than the flare fine).  This doesn't particularly affect oil producers as they are after the oil value - the gas is a by product which they are happy to sell or otherwise dispose of.  West African producers have been flaring 100% of their gas for decades. Not good for the environment.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 25, 2020, 10:33:25 AM
One of the bigger clues that oil company stocks are going to be lower for longer is the unprecedented cuts announced by Exxon. The company is perennially long range and can weather most downturns. Two years is nothing for them; they could fund the dividend from debt for much longer. They are investing in huge long term projects now. For them to accept the market has changed forever and start cutting is very telling. A vaccine will slowly restore partial demand over perhaps five years. Then the industry is back to the shale oil oversupply situation which preceded the virus. Alternative energy doesn’t threaten oil and gas, but the perception it could dampens the stock values even when profits are high.
You're saying this is like "most downturns", but then offering a historic drop in demand for 5 years.  Both of those can't be true.

To make sure we're referring to the same information, here's an article about Exxon's recent cuts:

"Exxon Mobil Corp XOM.N on Tuesday throttled back investment in shale, natural gas and deep water production, cutting planned capital spending by 30% this year as the coronavirus pandemic saps energy demand and oil prices tumble."
"“We haven’t seen anything like what we’re experiencing today,” Exxon Chief Executive Darren Woods said on Tuesday as he detailed spending cuts on a conference call."
https://www.reuters.com/article/us-global-oil-exxon-mobil-idUSKBN21P1II

The coronavirus pandemic is not most downturns: the Exxon CEO hasn't seen anything like it.

Another explanation is when "oil prices tumble", Exxon needs to adapt, and did so by "cutting planned capital spending by 30%".  If the article is accurate, that would indicate Exxon is simply reacting to new oil prices rather than predicting 5 years of low demand.

One of the links I referenced earlier predicts that demand will return to pre-pandemic levels near the end of 2021.  Where are you seeing a prediction of 5 years before a return to normal oil demand?
https://www.eia.gov/outlooks/steo/report/global_oil.php
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 25, 2020, 10:36:12 AM
TomTX - That's a false choice.  Two people called your post insulting, you just refuse to admit it.
Title: Re: Oil Investing
Post by: BicycleB on October 25, 2020, 01:47:37 PM
I suspect the exponential electric car purchases will have a big impact, but unclear whether the impact will be soon enough to deter price rises in the 1-2 year timeframe.

Curious about resolution of all this!
Title: Re: Oil Investing
Post by: TomTX on October 25, 2020, 07:44:19 PM
TomTX - That's a false choice.  Two people called your post insulting, you just refuse to admit it.

And yet you refuse to explain your false claim, which was the whole basis for claiming it was insulting.

Curious.
Title: Re: Oil Investing
Post by: BicycleB on October 25, 2020, 11:05:43 PM
Fwiw, after re-reading the posts of OP and TomTX:

To me it looks like honest discussion misunderstood, no need for offense.

OP wants to discuss his investing strategy, and feels TomTX is commenting on timeframes irrelevant to it, therefore on concerns (eg Tesla) that are irrelevant to it.

TomTX feels his concerns are quite relevant to OP's timeframe, that OP doesn't see it, and that seeing it would be helpful for OP. Right or wrong, the comment that ignoring the later timeframe is "dumb" is direct but honest commentary on OP's analysis, not a personal description of OP. It could have phrased more softly, but if OP wants comment (supposedly the purpose of the thread) he should accept it as it comes. From reading, it appears to me that TomTX has more experience in this area, so his comments should be valued. I have found them illuminating so far.

I may have missed a few posts (didn't see the ones about insulting), but as a reader, have found comments by both posters very informative in past. Anyway, I hope both stick around. Maybe it's mostly misunderstanding and calmness can descend.

***

On the merits, it seems that the long term future of oil could affect prices next year or even this year, which is in OP's timeframe, so discussing the effect of Tesla directly addresses whether to keep holding options in the next year or two. Maybe other investors are thinking about the same issue, so their thoughts affect the price? Would that make it relevant even if OP is sure to sell in 2 years?

More broadly, OP has the thesis that COVID details will affect oil prices in a way that might give predictable advantage, if I understand correctly. If experienced oil investors advance critiques that other factors will have bigger impact and that OP's investing theory is likely to be unreliable, that's a relevant comment, isn't it?

I like the fact that OP posts his actual positions, or significant examples thereof.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 26, 2020, 09:18:56 AM
... maybe at some point that trend reverses, with a reversion to the mean.  I'm not saying that happens next month, but over the next couple years it seems more likely to happen.


...  reflected in oil prices.  Without predicting 5 years from now, what happens if oil demand recovers?


...  Buying an option like that which expires in Jan 20, 2023 costs 1/4th of the stock price right now.  If oil stocks go up +25% in 2.3 years, the option breaks even.


...  So oil demand has been growing every year for the past decade.  And second, the prediction for 2020 and 2021: negative growth in 2020, followed by catch up growth in 2021.
https://www.iea.org/reports/oil-2020


Since we're focusing on lying, how is this not a lie?
2) I'm talking about the upcoming decade (ie, 2020-2030) which is the timeframe specified by you. It appears you didn't do the simple calculation of growth I suggested.
Can you find the post(s) where I mentioned that time frame?  I provided numerous examples where it's not the case.  My guess is you won't reply with evidence.

We can debate about what some people think is insulting or not.  But to claim I said something very specific, when I didn't, is a much clearer case of you being wrong.  Do you have a quote to prove it?

Title: Re: Oil Investing
Post by: TomTX on October 26, 2020, 11:38:48 AM
I'm going to ignore the floundering above.

In more relevant news, I'm seeing multiple claims that Tesla will be able to produce 1M+ vehicles next year, not the 2022 I had earlier estimated.

Tesla announced in the 3Q investor information that Fremont production capacity has been upgraded to 500k/yr, the Model 3 phase of Shanghai Gigafactory is now capable of 250k/yr, and the Model Y phase of Shanghai Gigafactory will be online within a couple months, though it will take some time to ramp output there as well. We can expect another 250k/year from there. That pretty closely matches the ~180k 4Q production estimates, presuming Shangai Model Y production doesn't contribute much in 4Q, but will thereafter.

On top of that, both Austin and Berlin Gigafactories are expected to begin output next year (estimates vary for volume. Austin is supposed to do Model Y production first, but Cybertruck is also scheduled to be out in late 2021). Berlin is currently ahead of Austin.

Berlin is almost ready to start installing equipment, Austin has a lot of site prep and foundation work completed, including having large power poles up for connecting to the local grid.

Tesla has plenty of cash for accelerated construction, with $14.5B in cash, and significant FCF each quarter. Giga Shanghai Phase 1 (model 3) took less than a year from "muddy field" to "Finished customer cars coming off the assembly line"

I think that breaking 1M full-range electric vehicles/yr from a single manufacturer is going to be important psychologically for oil investors, fewer will try to handwave away the change which is coming.
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 27, 2020, 10:38:45 AM
That's what I expect when the facts don't support the false claim you made.

As I pointed out earlier, Tesla is irrelevant to oil investing in the short term.  Tesla impacts less than 1% of the world's vehicles, which itself is a fraction of worldwide oil demand.
Title: Re: Oil Investing
Post by: ChpBstrd on October 27, 2020, 10:49:12 AM
What happens when Nio, Xpeng, Li, Chery, Baojun, or one of a dozen Chinese startups steal Tesla's technology and flood the Chinese market with EVs? The world's most populous nation already has a 3.9% battery electric vehicle market share.
Title: Re: Oil Investing
Post by: norajean on October 27, 2020, 12:10:26 PM
What happens when Nio, Xpeng, Li, Chery, Baojun, or one of a dozen Chinese startups steal Tesla's technology and flood the Chinese market with EVs? The world's most populous nation already has a 3.9% battery electric vehicle market share.

In your scenario, most likely China’s rapid and constant increase in oil consumption the last 50 years slows a bit (but continues to increase), assuming the electricity source for those cars is not oil (most likely coal, a far dirtier energy source).
Title: Re: Oil Investing
Post by: waltworks on October 27, 2020, 02:52:51 PM
You can make a plausible case for all sorts of outcomes. That doesn't mean you can successfully invest based on your plausible theory. I've learned that several times now...

-W
Title: Re: Oil Investing
Post by: TomTX on October 27, 2020, 08:10:22 PM
That's what I expect when the facts don't support the false claim you made.

As I pointed out earlier, Tesla is irrelevant to oil investing in the short term.  Tesla impacts less than 1% of the world's vehicles, which itself is a fraction of worldwide oil demand.

Yeah, we can all tell you are super emotionally invested in your oil speculation.

Good luck with that!
Title: Re: Oil Investing
Post by: MustacheAndaHalf on October 28, 2020, 07:48:35 AM
That's what I expect when the facts don't support the false claim you made.

As I pointed out earlier, Tesla is irrelevant to oil investing in the short term.  Tesla impacts less than 1% of the world's vehicles, which itself is a fraction of worldwide oil demand.
Yeah, we can all tell you are super emotionally invested in your oil speculation.

Good luck with that!
"we"?  You're one person.  When I post facts, rather than post facts of your own, you attack the messenger.  You don't know someone else's emotions, so you pretend to know them to attack someone else's motivation - because again, you can't counter the facts I've posted.

So who is more emotional: someone posting facts, or someone making character attacks?


ChpBstrd - For purposes of oil consumption, it doesn't really matter if Tesla or Nio makes the electric vehicle.  Both electric cars would take the place of a vehicle that consumes gas.

waltworks - Index fund performance during a crisis is a more limited data set.  Active funds have beaten index funds in the most recent crisis or two, but there isn't enough data.  You could certainly ignore every crisis and keep passively investing, which historically has won out over long time frames.
Title: Re: Oil Investing
Post by: ChpBstrd on October 28, 2020, 10:34:00 AM
ChpBstrd - For purposes of oil consumption, it doesn't really matter if Tesla or Nio makes the electric vehicle.  Both electric cars would take the place of a vehicle that consumes gas.

Ah, I forgot to state my conclusion, and assumed it instead. That was bad writing on my part.

Conclusion:
If dozens of automakers can quickly ramp up to anywhere close to Tesla's level of manufacturing competence, then the overall supply of electric cars could increase much faster than has been possible in the past. E.g. 30 factories could be build/reconfigured at a time each year instead of the current 3-5. Tesla investors have already funded much of the R&D that has lowered the price of BEVs from 150k to 100k to 40k and, coming soon, 25k. There is no remaining technical or economic barrier to prevent China's massive manufacturing capacity from being activated to produce these vehicles at scale within a couple of years.

It's easy to dismiss the Chinese EV companies as poor-quality junk merchants, but people made the same mistake about Japanese motorcycle makers in the 1960s, and then again about Japanese car makers in the 1970s, and then about Japanese electronics makers in the 1980s, and then yet again about the Chinese competitors to Japanese electronics makers in the 1990's to 2000's. People also dismissed digital photography in the early 90's because the products sucked, but that transition was complete in just 5 years (and Chinese manufacturers played a big role). 
Title: Re: Oil Investing
Post by: MustacheAndaHalf 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.
Title: Re: Oil Investing
Post by: MustacheAndaHalf 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.

Title: Re: Oil Investing
Post by: ice_beard 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. 

Title: Re: Oil Investing
Post by: MustacheAndaHalf 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.
Title: Re: Oil Investing
Post by: ice_beard 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. 
Title: Re: Oil Investing
Post by: thedigitalone 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.
Title: Re: Oil Investing
Post by: ice_beard 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. 
Title: Re: Oil Investing
Post by: ChpBstrd 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.
Title: Re: Oil Investing
Post by: norajean 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.
Title: Re: Oil Investing
Post by: ice_beard on November 13, 2020, 10:28:15 PM

https://www.youtube.com/watch?v=XDlugOA1w1E (https://www.youtube.com/watch?v=XDlugOA1w1E)

Herb Alpert, "Rotation"
Title: Re: Oil Investing
Post by: ice_beard 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... 
Title: Re: Oil Investing
Post by: MustacheAndaHalf 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.
Title: Re: Oil Investing
Post by: ice_beard 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.     
Title: Re: Oil Investing
Post by: MustacheAndaHalf 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
Title: Re: Oil Investing
Post by: PaulMaxime 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. “Zooming with the grandkids” 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: Humanity’s thirst for oil may never again return to prior levels. That would make 2019 the high-water mark in oil history.
Title: Re: Oil Investing
Post by: ice_beard 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. 
Title: Re: Oil Investing
Post by: MustacheAndaHalf 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.
Title: Re: Oil Investing
Post by: blue_green_sparks on December 03, 2020, 01:18:15 PM
Yeah, VDE shares up 31%...guess I will keep until vaccines are starting to help.
Title: Re: Oil Investing
Post by: meghan88 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.
Title: Re: Oil Investing
Post by: MustacheAndaHalf 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.
Title: Re: Oil Investing
Post by: ice_beard 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.