is now the time to invest in oil stocks?

G-Yo wrote: ↑Oil looks to be bottoming out here, although I can see it going a little lower. On the other hand I wouldn't be surprised if it shot back up to $70-80 by the summer.

Maybe, but lots of pundits are now crying for $40's, which can be self-fulfilling. Plus you don't need a long memory to recall when oil collapsed to the $30's on less substantial evidence than we have now. All you need is someone to add credible alternative energy speculations to the mix and oil related stocks could experience another thrashing. Or not.

My play is CPG because I think they are better managed and the share price has already taken a disproportionate nose dive. I'm fully aware it can tank more but that will either be slight in which case I don't care, or steep, in which case I will average down. I'm also aware they could still sacrifice their own dividend, perhaps to seize buying opportunities or to keep their balance sheet from melting down, either of which doesn't bother me.

What I'm more surprised about is how alternatives and things like Tesla haven't collapsed even more. They've been valued on the notion of replacing expensive oil but that thesis has vanished for the foreseeable future.

I think it's a good time to invest, but you need to make sure you do your research and recognize that some oil stocks are definitely inferior to others. For example, COS is entirely unhedged and carries most of their debt in USD so they will be banged up for a long-long time. I think there break-even cost is $65 per barrel without their dividend. On the other side, a little known company EGL just recently clear all their debt and has a surplus of cash and are largely hedged until 2016, so they may be able to whether this storm (though I expect their dividend will be cut at some point). Do your research and see who is hedged!
*BTW, as a disclaimer, I have owned both of these and used them as examples since I have researched them both.

SurplusPlus wrote: ↑ My play is CPG because I think they are better managed and the share price has already taken a disproportionate nose dive.

Yep, I bought 100 shares each CPG and HSE a few month ago, they were 10 bucks apart ($43 and $33). Now they're trading in the same $27-$28 range, and today saw CPG 10 cents below Husky!

Making my monthly RRSP deposit tomorrow - and buying more CPG in January...

Dec 31, 2014.

Another decline in oil just before the New Year.

Crude Oil (WTI) USD/bbl. $52.69
Crude Oil (Brent) USD/bbl. $56.09

So why exactly did oil ppb drop so significantly in the last 6 months? I understand that it is a supply vs demand explanation, but the US fracking didn't just happen overnight. Why wasn't there more of a steady decline as opposed to the ppb losing 50% of its value in 6 months?

Luckyinfil wrote: ↑So why exactly did oil ppb drop so significantly in the last 6 months? I understand that it is a supply vs demand explanation, but the US fracking didn't just happen overnight. Why wasn't there more of a steady decline as opposed to the ppb losing 50% of its value in 6 months?

Same reason why real estate in us crashed.

Did houses suddenly pop up out of nowhere in 2007?


Same reason why stocks crashed in 09.

Did companies suddenly all go bankrupt? Yes some did like Lehman and GM, but the entire economy? Nope.


As an RE bear, I'm surprised you don't understand this.

Luckyinfil wrote: ↑So why exactly did oil ppb drop so significantly in the last 6 months? I understand that it is a supply vs demand explanation, but the US fracking didn't just happen overnight. Why wasn't there more of a steady decline as opposed to the ppb losing 50% of its value in 6 months?

When there's a consensus of sentiment that's when we see big collapses. Another factor is that people found out that oil storage has been overwhelmed, which speaks to not only immediate supply/demand dislocations but future ones as well. Plus a variety of alternatives both practical and speculative have been gaining momentum.

Oil is going to the 40's and I think oil stocks go through one more decline and then I'll come in and buy...

January 2, 2015

Another CAPEX reduction and 56% annual dividend cut from Linn Energy/LinnCo (NASDAQ:LINE and NASDAQ: LNCO)

"The board approves a 2015 budget with oil and gas capital expenditures of $730M - down 53% from $1.55B in 2014 - and a 56.9% cut in the annual distribution of both LINE and LNCO."

Trilogy Energy Corp(TSE:TET
20% down ,,good time?

SurplusPlus wrote: ↑Maybe, but lots of pundits are now crying for $40's, which can be self-fulfilling. Plus you don't need a long memory to recall when oil collapsed to the $30's on less substantial evidence than we have now.

Tada.

SurplusPlus wrote: ↑Tada.

I think there will be oil deficitplus soon

There was a article on the globe about how some oil and gas producer's bonds are now yielding 9~10%, and how some companies such as Precision Drilling's are worth investing as they can scale back investment and drilling, and are still producing income from wells already drilled. If oil prices happen to recover, you could look at an increase in the bond price easily. Might be worth considering, except my broker has a limited bond selection. Any thoughts?

xgbsSS wrote: ↑There was a article on the globe about how some oil and gas producer's bonds are now yielding 9~10%, and how some companies such as Precision Drilling's are worth investing as they can scale back investment and drilling, and are still producing income from wells already drilled. If oil prices happen to recover, you could look at an increase in the bond price easily. Might be worth considering, except my broker has a limited bond selection. Any thoughts?

I think bonds are very less profitable for my taste

Jeenyus1 wrote: ↑January 2, 2015

Another CAPEX reduction and 56% annual dividend cut from Linn Energy/LinnCo (NASDAQ:LINE and NASDAQ: LNCO)

"The board approves a 2015 budget with oil and gas capital expenditures of $730M - down 53% from $1.55B in 2014 - and a 56.9% cut in the annual distribution of both LINE and LNCO."

OMG LINN ENERGY IS AT $11. That is freaking amaazing.

Are there any etfs strong in oil?

airmail wrote: ↑Are there any etfs strong in oil?

No one knows how low oil prices will get. One thing I do know is they will eventually go up and far above what they have been last few years.... i got my money on these 3 etfs CLO, ZJO and HXE....

CLO is good. touch a nice low today. lowest was about 2 weeks ago though hit like 8.50. I'd start dollar cost averaging if you want to get in. thats what im doing.

aneikgandhi wrote: ↑No one knows how low oil prices will get. One thing I do know is they will eventually go up and far above what they have been last few years.... i got my money on these 3 etfs CLO, ZJO and HXE....

I assume your talking about 5 years + timeframe. Of course you could say that about any commodity due to inflation. However, I don't think we'll be seeing 100+ oil for at least 3 years but that's just my estimate.

daivey wrote: ↑CLO is good. touch a nice low today. lowest was about 2 weeks ago though hit like 8.50. I'd start dollar cost averaging if you want to get in. thats what im doing.

Negative eps.. I dunno