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is now the time to invest in oil stocks?

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  • Mar 4th, 2024 9:55 am
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Deal Expert
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Oct 26, 2003
39289 posts
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Winnipeg
StatsGuy wrote: i remember doing that with nortel lol
but i'm going to do that again with SU, PPL, ENG and XOM lol
I think that is a good value with those stocks.
Deal Fanatic
Mar 21, 2013
6097 posts
10645 upvotes
Canada
Barely held off buying XOM today at $31.50...

They are expected to announce Canadian and US cuts in the next couple weeks. And I feel like a lot of things at their earnings report could generate a bump. Also they are likely a good long hold at this point.
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Sep 21, 2007
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...
I just noticed that the first post of this thread,the op is worried about big names going bankrupt. Look at us now...same situation. Also noticed I posted on the first page... So glad I got rid of Spartan energy lmao
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
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Sep 21, 2007
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https://www.bnnbloomberg.ca/new-jersey- ... -1.1514531

(Bloomberg) -- PBF Energy Inc.’s Paulsboro refinery in New Jersey became the latest oil processing facility to fall victim to a Covid-driven collapse in fuel demand, announcing plans to idle operations for the foreseeable future.

The company plans to lay off 250 employees at the 160,000-barrel-a-day plant and halt fuel production as a result of low demand, according to a letter to employees seen by Bloomberg.
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
Jr. Member
Mar 12, 2015
103 posts
25 upvotes
North York, ON
I'm holding MEG, CVE, and SU and have been for a while. It's down 30-40 percent. What do you think I should do? I should've sold it when it was higher in August but didn't. And today was brutal.
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Sep 21, 2007
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andalou wrote: I'm holding MEG, CVE, and SU and have been for a while. It's down 30-40 percent. What do you think I should do? I should've sold it when it was higher in August but didn't. And today was brutal.
i told my buddy to sell his MEG when it was above $4.. i thought he sold it all.. he only sold half -_-'.

Who knows.. it may go up after elections.. If you sold, where would you deploy the money then...

I'm holding my HSE position.... :(
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
Deal Addict
Jul 30, 2012
2141 posts
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andalou wrote: I'm holding MEG, CVE, and SU and have been for a while. It's down 30-40 percent. What do you think I should do? I should've sold it when it was higher in August but didn't. And today was brutal.
I think it (is) would be inappropriate for posters to offer you a "what you should do now" answer without knowing your risk tolerance, time horizon, etc. From experience, I can tell you everyone's risk tolerance is "high" until it's tested (like now). For me, none of my entry / add targets have been met yet on O&G plays (I have very specific bid targets based on my own fundamental / technical analysis). October is somewhat early (for me) to enter "tax loss" selling candidates in this sector (even in a normal year due to seasonality). The main driver today was rapid rises in Global Covid cases pushing off the idea of near-term economic recovery for oil (think negatives for planes, trains, & automobiles).

We are likely nearing trough levels but they can be lower than one expects. Of your list, I am reviewing Suncor (but for me entries would be $12+>$13+ range under current conditions). If it gets there fine, if not I'll wait for the next bus.
Sr. Member
Jan 23, 2009
945 posts
1922 upvotes
Ontario
andalou wrote: I'm holding MEG, CVE, and SU and have been for a while. It's down 30-40 percent. What do you think I should do? I should've sold it when it was higher in August but didn't. And today was brutal.
I'm holding SU also down 40-50%. Suncor is a integrated oil company trading way less then book Value of $27.44. Warren Buffet owns about 1.3% stake in Suncor about 19.2M share, in fact Suncor is one of the two Canadian stock he owns. Saudi wealth fund builds stakes in Canadian Natural, Suncor - about 2.00% stake in Suncor

https://hedgefollow.com/stocks/SU
https://seekingalpha.com/article/437625 ... days-price
https://www.bnnbloomberg.ca/saudi-wealt ... -1.1437236
https://www.fool.ca/2020/08/25/suncor-e ... tsx-giant/
Deal Addict
Jul 30, 2012
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agit wrote: I'm holding SU also down 40-50%. Suncor is a integrated oil company trading way less then book Value of $27.44. Warren Buffet owns about 1.3% stake in Suncor about 19.2M share, in fact Suncor is one of the two Canadian stock he owns. Saudi wealth fund builds stakes in Canadian Natural, Suncor - about 2.00% stake in Suncor
Just a caution on Book Value. It is not a very meaningful fundamental metric in the O&G world (when commodity price is falling). Free Cashflow / Price per Flowing Barrel / Debt-to-Cashflow are more relevant. Most companies take NAV (net asset value) write downs at year-end (especially when forward commodity price curves are dropping). Book values have been routinely marked down (over the last 5 years) on assets sold. I haven't looked at the HSE / CVE assets, but I assume the HSE assets will be written down when they show up on CVE Balance Sheet.

Write ups can occur but are unlikely until you see a year ending with a $60+ WTI
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May 31, 2018
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SK
jerryhung wrote: They're dropping oil again, WTI -6%

I think XOM is back to March 2020 low's
Looks like XOM is back to where it was ~23 years ago. Wonder what the chances of it recovering to 2016 levels are? Slim, or fat?
Jr. Member
Jan 30, 2020
149 posts
185 upvotes
Shell beat and raised the dividend. It's a good low cost producer.
Sr. Member
Jan 23, 2009
945 posts
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Ontario
DealRNothing wrote: Just a caution on Book Value. It is not a very meaningful fundamental metric in the O&G world (when commodity price is falling). Free Cashflow / Price per Flowing Barrel / Debt-to-Cashflow are more relevant. Most companies take NAV (net asset value) write downs at year-end (especially when forward commodity price curves are dropping). Book values have been routinely marked down (over the last 5 years) on assets sold. I haven't looked at the HSE / CVE assets, but I assume the HSE assets will be written down when they show up on CVE Balance Sheet.

Write ups can occur but are unlikely until you see a year ending with a $60+ WTI
With Suncor i believe book value is a important since Suncor own about 50% of the retail Petro Canada (there is about 1600 retail station in Canada), Suncor Cash Flow about 2 Billions.
Sr. Member
Jan 9, 2018
536 posts
698 upvotes
Hold on to Suncor , just finished reading their Q3 . They have been successful in significantly cutting their cost and moving right on their target , utilization is up again to almost 100% , it was average 87% for 9 months of 2020 as they were doing huge maintenance work , Revenue is up against Q2 2020 .
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Jan 30, 2020
149 posts
185 upvotes
added more SU and shell. I like shell more if things get worse but i like SU for the rebound potential
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Sep 21, 2007
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EddandEddie wrote: Hold on to Suncor , just finished reading their Q3 . They have been successful in significantly cutting their cost and moving right on their target , utilization is up again to almost 100% , it was average 87% for 9 months of 2020 as they were doing huge maintenance work , Revenue is up against Q2 2020 .
Even with those cuts, you think it's a good buy even now? It's past the massive sell off in mid March. No confirmation of an uptrend and elections next week, this could bleed a bit more... I think it's too early to add to any oil position..
"An essential aspect of creativity is not being afraid to fail." -- Edward Land
Jr. Member
Jan 30, 2020
149 posts
185 upvotes
faken wrote: Even with those cuts, you think it's a good buy even now? It's past the massive sell off in mid March. No confirmation of an uptrend and elections next week, this could bleed a bit more... I think it's too early to add to any oil position..
I know you weren't asking me, but what difference does the election make? If Biden actually does crack down on fracking SU would be a huge winner. If trump wins nothing changes.
Sr. Member
Jan 9, 2018
536 posts
698 upvotes
I see a huge uptick in demand in coming months..I am talking about 12 month period. Vaccine would be out , travel demand would start picking up. If you look at cars sales trend , recently Ford and other car makers had a huge increase in sales . They mostly make cars that use gasoline. I bought Suncor at average $15.50 so I am talking from that price prospective , not for investors who have bought it at high 30's . From $15 a share i see some really nice returns in next couple of years...
faken wrote: Even with those cuts, you think it's a good buy even now? It's past the massive sell off in mid March. No confirmation of an uptrend and elections next week, this could bleed a bit more... I think it's too early to add to any oil position..

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