Noob here. So a FUCK ton of oil stocks are extremely cheap right now... Doesn't oil always go back up? Forgot the name of this one company but the shares are like 50 cents right now and used to be 200-300$
Is oil good to invest in right now?
Ok. But it will go back up for sure would you say? I am well aware that I have a fucking collosal amount of research to do. But I just want to invest a grand in some cheap oil stocks for shits and see if that grand becomes 10k in 3yrs.
it won't go back up.
there's so much being flooded so cheaply, we could store it for years meaning demand will not be there even if they stopped. further, renewables keep getting cheaper, more viable, and third world countries which were oil dependant are being forced fed renewables by the west.
the oil meme is long gone.
invest instead in biotech.
It's the truth. Oil rigs are closing in Texas right now. I talked with guys who literally jumped to BITCOIN because they were desperate because their oil was dying. Theres a push for all cars to be electric (or at least hybrid) by 2050. The only reason federal reserves, fracking and such are being looked at for cheap oil is because drilling it out anywhere else costs too much to net a profit. We have too much oil and the demand and prices are falling HARD.
I've heard some of the bigger stores were bought full already in 2014 as the price declined quickly. they were on buying frenzy
>going back up quickly
>or as high
Time to restart a shale well: 5 days.
Time to drill a new shale well: 15 days.
Continents with unexplored shale plays: 6
Continents with fully developed shale plays: 0
Automobile efficiency gains projected for the next ten years: 20%
No that's not logical.
Supply goes up, demand goes up, price is neutral
Supply goes down, demand goes up, price goes up
Supply goes up, Demand goes down, price goes down
Supply goes Down, Demand goes down, Price is neutral
in a simplistic model.
Once you go into exact rates anything is possible.
Automobile efficiency is not a big deal when you could have 50+ percent more cars on the road in 10 years. China is the number 1 producer of cars in the world already (and I doubt they are on the same fuel efficiency plan as U.S). The stats were crazy last year they made a new car every 2 minutes or some shit.
Also it takes longer than that to drill and complete wells. Closer to a month on the drilling and 5 days or so fracing. I think only the eagle ford has such quick drill times.
But yeah it is exciting to think of all the unconventional oil in the world. Surely it's not just abundant in America.
i could think buying the first barrels at $20 if we ever reach that point, prolly with 2-3x leverage. buying a company is probably much riskier than just buying the oil. or at least buy multiple companes. some of them could dive to bankruptcy
Automobile efficiency means that your additional cars consume less gasoline than their actual numbers. If there are 50% more automobiles and they all consume 20% less gas than average, then from the perspective of gasoline demand, there are markedly less than 50% more automobiles on the road.
These prices are crazy low I want to buy right now. 20 is the inflation adjusted price from most of the fucking 50s when there were way less cars and the world was still in primary production of the biggest/best major oil fields. If they could support 20 back then I think 30 now is just absolute rock bottom.
Just a note that not everyone buys the latest cars, with the latest stats in regards to fuel. In-fact, fuel economy hasn't actually changed drastically for a little over 10 - 15 years when we're talking about an average car. For example a 1993 toyota corolla fuel economy is 27 city and 34 highway, while a 2013 toyota corolla is exactly the same. Not only that, but more Americunts that cared for the environment while gas prices were high are now buying trucks, suvs, and RVs.
I'm not sure what is going on to cause oil to drastically fall this drastically, when not to long ago everyone was shitting themselves about the depletion of oil, green house gases, and global warming. Now we all of a sudden have an abundance of oil that is at our finger tips. Plus the US is starting to export oil due to the excess amount of oil.
I'm rather concerned for what our future withholds.
Oil was expensive because OPEC regulated supply.
OPEC is now ded as the fucking League of Nations, the Gulf Monarchies have declared a price war on the Russians, the Iranians, the Shale companies and whoever else dares oppose them.
The gulf between the Saudis/GCC and the Iranians/Russians (pun intended) has grown too large, in the immortal words of Taylor Swift, they are never ever, ever, ever, getting back together.
And that's not counting the current Chinese Slowdown. Nothing short of a full blown shooting war between Iran and Saudi can kill oil at this point.
Usually 70s family cars had in-line/straight 6 engines averaging 20 mpg. Your early 80s vehicles operated the same, but it wasn't till the end of the 80s and the beginning of the 90s that MPG actually became a concern.
> pic related
>>Nothing short of a full blown shooting war between Iran and Saudi can kill oil at this point.
Be careful what you wished for, I once mentioned to a muslim WoW player that Islam needed a reformation, guess which two words I've been hearing on AJE lately?
For the majors it might be a good idea, you're probably looking at smaller shale producers which due to their relatively high extraction costs have been hit hardest. Very good chance of a lot of those firms folding completely; by no means a safe bet.
The majors suck though they couldn't even make shale profitable at 100$ oil. They are just too big it's like beurocratic. Find the smaller company that hedged well and has small royalty burdens and a good conventional base to depend on and will be able ride out the storm. Now that would be a winner.
>I'm not sure what is going on to cause oil to drastically fall this drastically,
The Saudi's wanting to wreck US fracking, Iran, and Russia all in one swoop. They got the cash reserves to keep up the low prices for years.
>For example a 1993 toyota corolla fuel economy is 27 city and 34 highway, while a 2013 toyota corolla is exactly the same.
Try closer to 40mpg highway while not being a rolling death trap.
I see the majors going on a shopping spree and buying up the smaller failing companies. They have weathered periods of cheap oil before.
This is what youngins say every damn time.
When oil is low, they say "oil is dead, invest in renewables"
When oil is high they say "this is peak oil, we're running out, invest in renewables"
Oil consumption is rising at it's fastest rate in over a decade. This was a record year for auto sales in North America - and it wasn't electric cars they were selling.
The oil meme is far from gone.
Personally I think oil going higher is a good long term bet, eventually we will have some sort of geopolitical crisis in the ME that will cause a jump upwards. However you have to be careful about investing in oil companies because long term they may have trouble with the large amounts of debt they are in, I'm waiting on the sidelines for a good deal on a large oil company with comparatively low debt and a decent dividend.
> and it wasn't electric cars they were selling.
Electric cars had their best year ever.
Granted only 91,000 between full electric and plug in model. The price is coming down the range is going up. They are here to stay.
The problem is the Saudis are going after EVERYONE, not just Iran and the US. They don't expect oil prices to go over $60 a barrel before 2030, so you've got 14 years before oil prices go up. If you are willing to wait, wait until summer to see how things work out. The Saudis are raising gas prices for the first time ever, Russia and Venezuela are basically in full blown recessions but no one wants to say it, and US oil producers are starting to go under. It's all a waiting game at this point to see who is going to blink first.
>a full blown shooting war between Iran and Saudi
>Saudi warplanes attack Iranian embassy in Yemen – Iran
Oh shit, I think someone might have heard you
Just a year ago I remember hearing that fracking was going to be a huge industry and that driving oil barges could net you $100k (not even mentioning all the other jobs it would create)
glad to see the industry is tanking
Remember when taxi drivers were telling you to buy internet shares in 1999?
When really it was time to sell?
Well this is exactly the opposite scenario.
It's the chance of a lifetime to make some serious money.
Don't waste money trying to predict the next big thing (*cough* bitcoins). Buy and hold shares in a cash generating, dividend paying, historically stable blue chip company.
Think of this time period as like buying bank equities in 2008 when the future looked bleak. Take a risk, bet against the market, and chances are that you will eventually make a good return on your investment.
actually the government will give me the money back that I payed plus dividends
it's called stock insurance, yes I do have it and yes I am happy about paying $2000 a month for $5000 worth of shares for a year
Oil is not going to recover ever again. 50-60 is possible if lucky in far future. this year we are looking 27-30
>will continue to get stronger as China and India get middle classes that drive.
le epic china and india middle class meme
Once depression and deflation sets in again them shitting in the middle of the road will be the only thing middle there.
Probs are china will get a US style great depression like the USA after their industrial and stock market boom.
>The company could be worth anything from $1 trillion (€910bn) to upwards of $10 trillion, which would make it the most valuable company in the world, according to a note from Jason Tuvey at research firm Capital Economics. The last mega IPO from the oil industry was a decade ago, when Russia's OAO Rosneft raised more than $10bn.
Short selling their company while they tank the oil industry, so they can buy it back right before they decide to pull the lever again and rake in even more money.
Good strategy for the Saudis. The oil industry is basically rigged by OPEC, sure there's a bit too much supply but Americans will gladly pay $3-4/gallon in gas and overall profits go up even with a decrease in demand (it's not like Americans are driving twice as much now as in 2013.. maybe 10% more).
Just watch the fucking news circling in regards to oil - Saudi and the rest of durka durkastan - I mean OPEC, have pretty much said "we're just gonna pull as much of this shit outta the fucking ground as possible". OPEC's purpose is to put out it's Western competitors like BP and the US's oil companies. In that regard, some of it's own members are going to go out of business as well, and there are going to be only a few nations to compete for oil for a while, making Saudi and other oil-rich nations to have a pretty good monopoly on the oil market. Thing is, a lot of western nations are looking at moving to renewable energy - similar to how oil replaced coal. While you might be able to make some money on a long if you pick the right nation to back (in this regard, seriously, check the fuckin' nation out first, the stability of it, chances of it being attacked by foreigners, do your homework first), you could make a pretty penny. Alternatively, the guy that said go into biotech, is ultimately right. It's going to beat oil out in countries that don't naturally produce it, within the next 30 years or so.
"Peak oil"? haha. Tell that to the people who are finding oceans of oil under fields that have been producing for almost 100 years. Under the Permian in particular. Don't forget the oil around the Falklands. or, the Malvinas if you're not into the whole British thing. Peak oil is a book selling term like "The Joy of Sex" or "Fellate Yourself to Wealth" (which is a big seller among Bitcoiners).
That's complete hokum. You're a retard for believing it.
On the Falklands, that oil is pretty poor quality and only worth extracting at prices 4x the current. That's the thing though. As oil prices rise, new supplies are economically viable and enter, bringing the price down. It looks like we'll keep finding fields for a long time yet.
Obviously you aren't in the hydrocarbon production industry.
"The Permian Basin has produced over 29 billion barrels of oil and 75 trillion cubic feet of gas and it is estimated by industry experts to contain recoverable oil and natural gas resources exceeding what has been produced over the last 90 years."
>The Saudi's wanting to wreck US fracking, Iran, and Russia all in one swoop. They got the cash reserves to keep up the low prices for years.
You DO know the Saudis are bleeding money pretty profusely right now, right?
But they are selling sovereign bonds to cover their deficits. They could do that for 100 years into the future today. They want to financially kill the tight oil producers. They are getting close to so doing.
America is over 16 trillion in debt, saudi arabia can do the same. They can't survive it, and they're sinking their own ship to bring others down, but they're still going to bring others down.
This whole collapse in oil price is drop in demand. Almost none of it is supply related (maybe a little due to US fracking). The main culprit is China rolling over, and that is bad enough. Demographic collapse is only going to worsen. Some of you really need to do your homework before you go lose your ass betting bull on oil.
Won't the Supermajors be able to benefit from the current low valuations in the oil industry by snapping up smaller companies on the cheap?
I recall reading an article stating this was the benefit large airliners have over their smaller competitors.
Ever is a long long time. Remember a few tears ago when everone said it would never be under $100? Nobody has a fucking clue; if they did, they wouldn't spend their time shitposting in biz faggot.
inside man here. the question is how long area you willing to wait. could be 8 months could be 5 could be 8 or 9 even. I think you could do quite well but you'd have to hold onto the shares for a while most likely. If you decided to go that route I'd guess going with a very large company would be the safest bet. I'd still wait it out until at least summer.
there is dinosaur in ground
when dinosaur get very, very old, dinosaur turn into sticky brown stuff
we put this sticky brown stuff in machines and they go CHUGA CHUGA CHUGS and VROOM VROOM!
If Chinese market goes bad bad, they will use less VROOM VROOM juice, and then less people will want less VROOM VROOOM juice, and so the people that still want to go vroom vroom can do it for less!
>lol no one needs oil anymore
holy fuck this post is retarded, you realize the total fleet of gas cars is over 1 BILLION. Try and imagine 1 000 000 000 cars, imagine the amount of materials, work, energy etc that go into that.
The car fleet turns over about every 20 years, Teslas, bolts, leafs, etc are just now coming on the scene and slowly increasing in market share. The most aggressive possible time schedule has an electric fleet by 2035+
Over here in the real world we are going to need oil for a very very long time yet. Oh and if a shitstorm breaks out in the middle east and the towelheads regime is in trouble prices will skyrocket
I told ya, oil is done for good. 25 in 2016 is definitely not out of quesiton. 20 is prolly we wont reach tho. Cant wait to see the middle east burn.
This is called "hope-ium".
Morgan Stanley agreed with Goldman Sachs today and said oil is headed for a $20 handle.
The price won't quit falling until about 1million bpd is taken off the market.
It's not all just about cars and energy. The refining of oil is used to get all sorts of different polymers we use commonly in lots of different areas. Take a look around you right now, any number of plastics and other man made synthetics are derived from the refining of crude oil.
It has many, many different uses.
No. They are still waiting for their sanctions to lift totally and money to clear.
Incidentally there is an article out that expects gas in the US to be under 1 dollar by the end of 16' with oil being around 20 a barrel.
At those levels the only ones who survive are state backed or megacorps like Exxon BP and Chevron
We haven't seen real panic yet so $20 is probably a sure thing. $10-15 is probably the low this year. You guys are too young to remember what happened in the 80s. Wait until there is blood in the streets
Alright niggas XOM shareholder here. How bad is it going to get, and can I just ride this out and buy every major dip, collecting juicy dividends along the way?
>yfw everyone invests in oil and it suddenly drops to 20 dollars next week
i'm no expert but a lot of people forget how much the world is dependent on oil not just for transportation.
Farming, agriculture, plastics, pharmaceuticals, heavy industry all rely on oil.
Planes can't exactly just switch to electric now can they.
Juicy Dividends in Oil? Are you fucking serious? have you not been paying attention?
Once oil drops to a certain point won't there be a big oil buy-up? Why not buy oil at $15-$20/share? Oil would be extremely easy to sell at that price. I see no reason for it to not go back up due to optimistic investing, even if we're moving away from oil as energy. India and other developing countries will still buy all the excess oil if it's super cheap while more developed countries move onto alternative means.
no i dont want dividends. i fucking hate dividends. literally the investing meme of all time.
>ten years ago oil prices are relatively high
>there is an increase of demand in Asian countries such as China as they are industrialising rapidly
>middle eastern oil producing countries are now in conflict. Supply decreases and demand increases, hence the high prices.
>then some of these middle eastern countries are able to distribute and export oil after a few years and the US has increased it's fracking.
>change in supply and demand
>OPEC countries continue to sell at current rate despite low prices to maintain market share even though they know they'll be making losses
>price decreases even more, Americans know this and want it.
>Russia and MIddle Eastern countries are in big big trouble
>America and Russia are in Economic Warfare
>Low oil prices causes Russian bankruptcy and WW3
That's how it'll happen. You heard it here first.
This oil war goes back to the 90s when the US created doctrines to take over countries for their natural resources or install puppet regimes. This is to contain Russian and Chinese sphere of influence in the region. China isn't playing ball and they're just taking their oil from the South China Sea and buying gas from the Russians. This is all one big geopolitical dickwaving contest. Everyone is expendable.
10 and 15 are out of question. 20 is absolute low. 25 is quite possible in 2016.
One thing nobody mentions, it's the huge budget deficit most oil producing countries have.
Add the fact that they are dictatorships that buy the population's conformity through generous spending.
I really don't think they have much margin for budget cuts.
I remember years ago my dad said the West would be the one's laughing when the Saudi's run out of oil and want our water. Well, it doesn't look like they'll run out of oil but they'll run out of the money they earn from oil sooner enough.
You're right, it's real bad news for the OPEC countries because their economies are totally based on oil. And countries that base their income off one good are very volatile and are constantly in a precarious spot.
Did you read about what RBS and other bank analysts are saying? That oil prices might go down to 16$ a barrel this year. If they do, that's bad news for Russia especially.
History is repeating itself. The US put a trade embargo on japan, leading to Japan militarisation, pearl harbour and then war.
Okay let's clear this up:
1. War between Russia and civilized world is extremely unlikely because of nukes
2. If war actually happens, nukes gon' get fired and then it doesn't matter one itsy bit whether you shorted the index or bought buttcoin or whatever.
Because then, if you are unlucky enough to survive, the only thing that will ever matter ever again is edible food.
This is the day. This is the lowest oil will be for years. $200 per barrel in less than 3yrs. Screenshot this post.
Oil is a finite resource lads. In the long run, its price has only one way to go: up.
Actually, our company uses a black swan number of $350.00/bbl in our VaR stress testing. Just so you know.
This is dumb, the largest users of oil in the world are in industries where electricity and hybrid technology aren't even viable and won't be for some time.
There's an over-supply at the moment because global development is immensely slowing down and people are still pumping out shit like crazy.
OPEC can't do shit at the moment. America has the full house with their shale oil reserves. Any government chart will show the projected outputs in American will start to peak in 2018-2020 and begin a very gradual decline by 2025.
Oil is low but petroleum is still expensive (yave you cunts noticed a significant flown on effect reducing the cost)..... no you haven't, look for a company that has lots of petroleum refining capacity. They will be making money and ticking over..... but they will ahve been punished by ignorant cunts who do not examine the PE ratio of the stock.... you have the data right in front of you...
>1. War between Russia and civilized world is extremely unlikely because of nukes
This is a false assumption. It can start as an alliance between Russia and other similar states (post-Soviets and China), which will then be followed by proxy wars, which could gradually spill over and escalate, causing huge damage to each side.
The Russians could annex the Baltics in a few days. Who would stop them? The US wouldn't dare to, as it knows that this could lead to a thermonuclear war. The EU wouldn't dare to, as its nuclear arsenal is virtually non-existent, and any serious retaliation would lead to a nuclear strike.
honestly I found the best way to get started was to just pick a stock and invest in it.
you'll get drawn into it and be able to see why the stock goes up, comes down and how news/investor speculation affects it. also the epic ramping happening on the associated forums before an announcement
America has a well-diversified economy (Saudi only exports and oil products in significant quantities) and a much larger population.
I hope you're just shilling to drive the price down more. I can accept that much.
Oil will reach 5 dollars a barrel once china starts fracking. Get into a short position on the SP500. It's going to drop 30% in the next few months. I've been making a killing this week with it falling.
Ding ding. Nearly every nation's oil storage facilities are filling up, but oil nations need to keep producing to keep their GDP up. Artificial costs are the name of the game, and that's why you should be buying in starting now and continuing for 5 years.
I think that would be dumb. I am one and while it has been great it's only just really set in that my fate is tied to the price of oil so much. Even if I'm a great employee I can still get let go easily. It's a shitty way to live, me and most of my co workers are afraid to take out a mortgage despite making six figs. Also realize the pay is high because the risk is high. I know several guys who graduated with decent grades at high oil prices who still couldn't get jobs. You're much better off going civil or something and just try to get an oil job later if that's possible. Fuck the CEO of Exxon is a civil engineer it can't be that much of a handicap.
Yeh the manufacturing sector in the US is big... compared to Singapore.
Really though manufacturing orders and production have been on the decline for some time. And compared to the rest of the economy manufacturing is small.
>And compared to the rest of the economy manufacturing is small.
Believe what you want.
compare this to other countries with similar size like China. Also compare this to the US in the past. there has been a major decline. There is no longer as much production in the US. No real wealth being created, only the Federal Reserve printing money.
Compared to when. The 1950's was 60yrs ago.
You can't do a comparison like you say easily. China and the US are still number one and two with GDP. 18% of our GDP is a lot! Most countries would love to be 18% of our GDP.
>GDP is really a poor measure of how well an economy is doing. GDP and the unemployment rate are Keynesians favourite indicators of measuring an economy's performance. Remember GDP is consumption + investment +gov spending + net exports
Emphasis on the 'government spending' part. How much money a government prints and spends really shouldnt be taken into account when talking about how well a country's economy is.
You have to look at manufacturing orders and sales, both have been on the decline. These are orders and sales between businesses. Not between government and businesses.
You should look into more on how GDP is calculated. That stuff like you say is factored out. Besides t is fair when every country is given the same metric in calculating. Apples to apples.
Canadian here. Our oil is the cheapest in the world now. Most of the production costs were all up front so the pipes will keep flowing for awhile longer.
I think someone pointed out that the over supply is only a little bit more than demand right now. Jesus christ I wish someone would cave in soon and help bring that supply down. The price will rubber band so hard the other way it'll make our heads spin.
And can some other Canadians explain to me the Canadian Oil Sands rejecting the Suncor bid? Seemed like a sweet deal.
>Most of the production costs were all up front so the pipes will keep flowing for awhile longer.
Even the Saudis couldn't pump oil that cheap. Also the cnbc article says that China stopped filling up their strategic petroleum reserve, which seems was being supplied by Canada.
>There is no longer as much production in the US.
Manufacturing is just as strong as it has been. The only difference is it takes fewer workers now. Manufacturing is doing what agriculture did 100 years ago.
I studied physics and work in the oilfield now. If you really want to do it go for chemical engineering or geology. The people l know that studied petroleum engineering usually are useless.
>work in oilfield
>constantly hear people complain about obama making oil prices crash and making our dollar worthless
You have to remember:
1) Things like Oil will always be in demand. Plastics, fuel, etc. Oil will always be required.
2) Oil is selling below the cost that it is produced. This is unsustainable. The price HAS to go up.
3) The question isn't if you will make money on oil. You will 100% make money on oil. The question is when. Are you willing to double or triple your money in 5 years? If so, go big on oil.
I am full buy on energy/oil right now. This will easily push me into the millionaire club in 5 years. You have to be an idiot not to have a large portion of your investments in something as guaranteed as oil that is so cheap.
Russia is the country people should be looking at. It produces basically the same amount of oil as Saudi. It is burning through its cash reserves faster. It was already in recession. It is fighting multiple wars.
Oil is finite. Production will drop and demand will increase again in the next few years. We are still a ways off from replacing oil as our main fuel source. Meanwhile population continues to grow as will need for oil.
This will easily climb over 50 again. Invest now or see if you can get in at 20 if it reaches that low. Let the doomsdayers circlejerk for a year and laugh in 5 when you roiling in that oil money.
Anyone who thinks oil won't bounce back has both no proof and most likely no understanding of the markets or oil situation.
Panickers will get fleeced, have to be patient.
Where exactly are you putting your money? Is it worth looking at exploratory companies like SeaDrill or are they just too far gone?
It's real fucking simple the companies that have infreastructure right now, drilling shit for under $20/barrel in costs are worth their weight in gold.
Companies that spent millions on experimental methods to get oil for 60 BBL cost?
DEAD IN THE WATER
>invest instead in biotech.
Be careful anon. Biotech and medical technology/software in general is usually terrible compared to something like aerospace or open source software. Many of the devices are very easily broken into. I won't say it's a ticking time bomb for the entire industry, but it also wouldn't be surprising for one company to go under because of a massive scandal.
Think VW cheating scandal but people dying.
so what do you think, wait for saudis and iran to push down the price and see how demand goes after? i imagine reserves will be full for a time and it will and price wont shoot up immediately, but its fucking oil, plus im sure there will be a lot of opportunistic investors jumping on it. if you buy at 15, even if it only gets to 60 youre tripling your money. i gues its just a matter of weather or not we have a full on happening and how long it takes fot suply and demand to balance out
>wait for saudis and iran to push down the price
nobody is "pushing price down" - it's being valued at what it's worth due to the glut in supply: http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0
You realise that Saudi exports almost nothing but oil and America exports no end, even if not all of the products are physically made in America, the corporate HQ and the money are all there. Just because China has replaced America in making McDonald's toys doesn't mean that it isn't much better than KSA.
Holy shit, automation is a thing. There is nothing wrong with a service-based economy. It's a good thing, actually. An efficient and diverse manufacturing industry is great, but all rich countries are mostly service lead.
op , we could literally tell you our speculations that oil will double or quadtruple in the end of 2016 but if it won't in actuality, will your question even have a point after all? its all about what you think happens.
go to BP website look for economic reports from their chief economist. read and understand these reports.
understand what the difference between fracking and conventional drilling are.
then weigh the fact that solar is 1/6 the cost of gas and coal powered electricity.
then understand that the market tries to predict the future.
the way I see it two things will increase demand. #1 world war 3 breaks out and last a decade
#2 space aliens show up and steal 35 years worth of oil.