Oil Price Discusions.

[walleyes]

With the way the price of oil is heading we are seeing and hearing all kinds of differant things. Personally I think this issue is more media than supply driven. It's the shock and awe mentality. I have read several articles on both sides of the coin and I believe this won't last long. It's going to be hard on some companies in particular service companies and the heavy in debt small producers but it's going to be short lived.

This info going around that there's an oil glut is wrong. Yes today there is but it's short lived, the simple fact is that demand is greater than most reserves that are out there. You don't here this from main stream media because it's not news. They also get their info from certain places, they get their info from the large US companies, large US investment firms and governments all of which do not want to tell the truth. The fact is is most of the U.S. shale plays are falling far short of their projected reserves, these companies nor the government will come true on this because it would drive down their market value, but the numbers don't lie. These plays are on a sharp decline rate far faster than they anticipated. And who owns these companies but the investment firms. Fact is Russia is headed for a major energy crisis they will be in a negative production with on the next year or two, this is fact not myth.

I believe Canada and in particular Alaberta holds some of the only true reserves out there. We will in the end be strong and have enormous clout in the market over the next few decades. Pipelines be damned, they will eventually need it and the lines will go through.

Some articles to read, not your usual CNN crap but production based articles.

http://www.outsiderclub.com/report/2015-oil-price-forecast-a-return-to-150/1238


http://boereport.com/2015/01/06/column-energy-crisis-as-early-as-2016/

http://shalebubble.org

[Paul]

It's the US and the Saudis pressuring Russia and putting the hurt on Putin.

[walleyes]

I agree Paul and good on em.. We can cut back some in this country if it means puttin the hurt on that goof ball.

[AxeMan]

I agree in principle with Walleye's comments.  I don't believe the price is being driven so much by supply and demand right now.  The market is being leveraged by large investment companies, governments, and mostly the roller coaster fear and greed mentality of the stock market and futures markets.  Let's face it, no money stands to made by rich speculators in a market with a steady price line.  The boom and bust cycle of energy markets is advantageous to rich investors and is driven by big money speculators.  They rely on the old buy low/sell high principle.  A market with extreme ups and downs driven by fear and greed mentality and futures speculating is the order of the day.  Buying a commodity on the futures markets and just holding a stock ticket is the problem.  It allows for that commodity to be leveraged by investment money only without ever truly creating a demand on that commodity (no physical transfer).

A smart thing to do now is buy oil stock or commodities at the bottom or in the near future.  This investment will lead to the recovery of the market and make you money.  Sell when the market recovers, make your money and continue the cycle.  This all has really nothing to do with the supply and demand of energy which is actually a steady defined constant to a great degree.

The big fear is that short term low energy prices will trigger an overdue correction in the large debt markets such as the mortgage market where overvalue is abundant.  A raise in interest rates will further compound this.

[Paul]

What Axe said if you have money sitting around buy into E&P companies and the small to mid range guys are your best bet try Blackpearl or similar others why should the money mongers make all the cash, it will only go back up it's the cycle of it. You can make money in this environment it might take 12-18 months but you will come out ahead.

In the meantime enjoy the cheap gasoline everyone.

[walleyes]

Well written Axe..

And yes these are the times to take advantage of some of these stocks. Personely I tend to stay away from pure play companies, with that said I do hold a number of shares in an oilsands company, we'll see about that one. Lots of good small to medium companies playing in the west here that are diverse. With a little home work a person can come out of this pretty sweet.

[OL_JR]

           I tend to agree that this won't last that long.  This seems like it's going to be more of a little dip.  Wouldn't be surprised if prices are starting to look a lot better by fall, maybe earlier.  I think it's also worth mentioning that we aren't dealing with Stelmachs royalty increase this time.

          As the next couple years progress we will start hearing how all this increase in production and exploiting new fields with todays technology has taken a toll on reserves and we will probably start hearing about how many of these fields didn't have quite as much recoverable oil as initially thought.  (Another spinoff of the "peak oil" propaganda that we wen't through during the last boom).  Prices will get crazy high and then somethings going to give.

          Just my .02

         

[BruceW]

Read this morning Slumbergey(sp?) laid off 9000;  also been reading vacancy rate is climbing rapidly in Ft. Mac., just from what I've read the general consensus is slight slowdown till breakup, then.....? 

Was visiting last night, BIL showed me a graph of the current stock market share vs financing graph, hasn't been so heavily weighted since 1929.  Everything he's been reading leans towards a major, let's call it an, "adjustment" for now by Oct. at the latest.  (an, "adjustment" in Oct.?  Now where have I heard of that before?)

Meanwhile Putin just turned the european tap down to 60% flow, a week after it's become knowledge that russia pretty much now has runaway inflation despite two failed attempts to get it under control in as many months.

The Swiss just this week dumped the euro and will no longer shore it up by pegging the frank to the euro's value.  Since they've done that, the frank has soared.  Big question is, what will Germany do?  They're the only solvent country in the entire EU as far as I know, and they're the only reason countries like greece and spain (+ a few more) are not in complete anarchy.

Most provinces are still spending money like there's no end to it, our enelected premier is about to saddle us with a sales tax rather than make any attempt to control spending (did he graduate from the wynn school of finance?)  It certainly looks like he's going to push an election before a budget;  wouldn't want Albertan's to have a peek at the real books before the election, would we?

Our cousins to the south are in dire straights despite the msm pretending they're not and if anyone down there lifts a cheek the whole things gonna fall apart.  (and not just financially)

2015's going to be an interesting year.  Thoughts???

Seriously, I read history, keep abreast of politics and world events(not really finance), and have never heard or read of anytime so screwed up.  Anyone???

Sorry to sound so negative, but I'm not making this stuff up, nor am I over dramatizing.  If anything I'm underdramatizing the situation.

[Paul]

Yep phones getting pretttty quiet may have to build ice shacks full time 

[Sonny]

Gonna hit $40 then slowly rebound to $80 for the rest of the year...end of the year..

My prediction anyway...

[AxeMan]

Good a guess as any, Sonny. 

Governments are not showing restraint at all.  Prentice is flapping his gums but whatever.
PC's are taking taking large transition payouts, Federal building spending continues, city councils are giving themselves substantial raises, etc.
Life goes on and gas is cheap.

[AxeMan]

Some levity for this thread:

A thief stuck a pistol in a man's ribs and said, "Give me your money."

The gentleman, shocked by the sudden attack, said, "You cannot do this, I'm Alberta’s Premier  - Jim Prentice!"

The thief replied, "In that case, give me MY money!"

[MrDave]

I find it funny that people expect oil should be over $50 a barrel. When I got out of school it dropped to under $11.00 a barrel. Interest rates on mortgages hit well over 15%.
 It amazes me that so many people aren't prepared for that to happen again. One fellow told me the government won't allow that to happen again. Really?
 Just wait until the rates climb again. Try some math with your mortgage. How many of you have a mortgage on a $300 000 home? Can you handle 10% interest on the bill?
 Oil prices can go a lot lower, and likely will eventually. Being cautious about borrowing money is a smart thing. Our economy can tnk easily in a few months like it did in the mid 80's..