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is now the time to invest in oil stocks?

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Deal Addict
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Jan 23, 2011
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WTI Falls Despite Crude Draw As Product Inventories Soar

The EIA reported an inventory build in gasoline and another rise in middle distillate stocks for the week to December 2.

Gasoline inventories added 5.3 barrels in the week to December 2, with production averaging 9.1 million barrels daily.

This compared with a build of 2.8 million barrels for the previous week and a production rate of 9.4 million barrels daily.

In middle distillates, the EIA estimated an inventory build of 6.2 million barrels for last week, with production at 5.3 million barrels daily.

Oil prices, meanwhile, are slipping further down as traders relax about the potential consequences of the G7 and EU price cap on Russian oil. It appears they have assumed that it would not affect the availability of oil in any significant way and are selling crude, with both Brent and WTI slipping below $80 per barrel.

Oilpricecom article link
Oilpricecom article link
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Jan 5, 2018
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its over. SCO is the winner.
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Deal Expert
Jan 27, 2006
21844 posts
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Vancouver, BC
Gingercookie wrote: WTI Falls Despite Crude Draw As Product Inventories Soar

The EIA reported an inventory build in gasoline and another rise in middle distillate stocks for the week to December 2.

Gasoline inventories added 5.3 barrels in the week to December 2, with production averaging 9.1 million barrels daily.

This compared with a build of 2.8 million barrels for the previous week and a production rate of 9.4 million barrels daily.

In middle distillates, the EIA estimated an inventory build of 6.2 million barrels for last week, with production at 5.3 million barrels daily.

Oil prices, meanwhile, are slipping further down as traders relax about the potential consequences of the G7 and EU price cap on Russian oil. It appears they have assumed that it would not affect the availability of oil in any significant way and are selling crude, with both Brent and WTI slipping below $80 per barrel.

Oilpricecom article link
Oilpricecom article link
This is a by-product of high diesel prices as North American refiners are pumping out as much diesel they can to capitalize on the high prices.

As for the lower oil prices, according to various talking heads on CNBC, most analysts believe that this is temporary as the fundamentals in place don't support the lower prices and most analysts suggest holding on to oil stocks as oil prices are expected to move upwards. BTW> Another week has passed were US oil inventories are much lower than estimates....
Deal Guru
Aug 17, 2008
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Surprised no one commented on the "Trap" leak. It's a big one. WCS blew out on this today but came back a bit.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Expert
Dec 5, 2006
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Markham
MrMom wrote: Surprised no one commented on the "Trap" leak. It's a big one. WCS blew out on this today but came back a bit.
I saw this news this morning. Thought with oil price coming down along with their cost adjustment, the stock would drop 5-10%.

Get cash ready and TRP price doesn't move
Deal Guru
Aug 17, 2008
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@smartie more painful for those needing to get their product to the refineries.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Guru
Aug 17, 2008
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Which side is the SPR's fuel cap on?

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Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
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Mar 30, 2017
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GVA
I feel the bottom will be in after oil price to touch 6 handle, maybe next week.
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Deal Expert
Jan 27, 2006
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seatiger wrote: I feel the bottom will be in after oil price to touch 6 handle, maybe next week.
It depends on what the US Fed says about interest rates. All of this downward pressure is due to the mistaken thought that a recession (even a mild one) will kill demand given that Russia supposedly flooded the market with crude recently - they probably didn't make any friends in the Middle East.
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May 2, 2006
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GTA
There are some interesting similarities between current Oil chart setup and the bottoming/bounce setup at the end of September:

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Deal Addict
Jun 2, 2020
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Van City
Anyone considering PBR today? Looks like the market doesn't want that political risk.

Edit: Bought a starter position in PBR.A
Last edited by PaddyM77101 on Dec 14th, 2022 3:46 pm, edited 1 time in total.
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Newbie
Dec 11, 2022
16 posts
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I averaged down today, bringing down my average from 11 to 10.10.
The amount of political risk already priced in is insane. Previous terms by Lula didn't turn out to be revolutionary.
There also isn't any appetite in Brazil for economic revolution - they don't want to become second Argentina.

What cause the drop today is a bill to allow politician operatives to manage companies without 36 month grace period passing through house of commons
Sr. Member
Mar 12, 2017
832 posts
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I wanted to sell KEY on that last push to over 31, but I'm too often brainwashed by the "buy and hold" strategy even against my better judgement ... Now back to 28.3 with the offering.
Sr. Member
Mar 12, 2017
832 posts
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Anyone has an opinion on pipelines vs royalty plays like FRU or TPZ? Similar dividend, both less volatile than producers. Pipelines seem to be more popular. I have trouble separating them, why one over the other?
Last edited by leolozon on Dec 14th, 2022 9:21 pm, edited 1 time in total.
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Dec 5, 2006
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Markham
leolozon wrote: I wanted to sell KEY on that last push to over 31, but I'm too often brainwashed by the "buy and hold" strategy even against my better judgement ... Now back to 28.3 with the offering.
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Aug 15, 2016
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leolozon wrote: Anyone has an opinion on pipelines vs royalty plays like FRU or TPZ? Similar dividend, both less volatile than producers. Pipelines seem to be more popular. I have trouble separating them, why one over the other?
Pipeline companies have earnings that are based on long term contracts, so there isn't much volatility in their cash flow. This also allows them to take on significant leverage, so they have high levels of debt in the capital structure. They own long life assets and rely on continued development of projects to grow their earnings.

Royalty companies have revenue based on the price of oil or gas which makes their cash flow much more volatile. Unlike producers, they do not have capital or operating costs so they get high netbacks and have less exposure to inflation. They rely on producers to drill and develop on their lands, which limits their growth potential. PSK, FRU and TPZ are the three main players in Canada, with TPZ being more weighted to natural gas. None of them have much debt.

I personally prefer the royalty companies in this environment of high interest rates and high inflation. I like TPZ since it's got royalties on all of TOU's land, which has considerable growth potential in the gas space.
Deal Guru
Aug 17, 2008
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Glad I met my friend for the pizza instead of adding to TRP back on Sep 23rd, 2022 12:31 pm. TRP made a new 52 wk low on Fri. I only noticed that this morning. > 6.6% div yield on Fri. Just an observation, not a target.
($0.9)(4)/0.066 = $54.̅5̅4. LOD atm = $54.60.

Update

The unknown costs of their operational issues will continue to weigh on TRP until there is some clarity. New 52 wk low.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
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Feb 4, 2015
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Canada, Eh!!
MrMom wrote: Glad I met my friend for the pizza instead of adding to TRP back on Sep 23rd, 2022 12:31 pm. TRP made a new 52 wk low on Fri. I only noticed that this morning. > 6.6% div yield on Fri. Just an observation, not a target.
($0.9)(4)/0.066 = $54.̅5̅4. LOD atm = $54.60.

Update

The unknown costs of their operational issues will continue to weigh on TRP until there is some clarity. New 52 wk low.
Just started a position today. TRP has issues but think stock price reflects more doom then necessitated... time will tell.
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2017,2018: BOC raised rates 5 times and MCAP raised its prime next day each time.
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Deal Guru
Aug 17, 2008
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The EU's typical tough talk until the invisible hand slaps them. I have more respect for Greta than any of the EU members. Out this morning.

Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience

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