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Discussion Starter · #4 ·
Yup....don't get used to the low prices. I'm sure that they will bounce back with a vengeance in the near future.
If you're in the market and have some funds lying around... put it in an established oil company! Now!

The price of oil will be right back up to where it was... sooner or later. You can count on that!

IV
The problem is figuring out which player to bet on..
The majors should survive I guess..
A lot of smaller players might go under..

I think a refiner, like PSX is a good play
 

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I’m trying to figure out how to get in and dump some money in. USO maybe but I just read an article to wait as the way they buy their contracts will likely see it go lower.
 

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Previously Will Beararms
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Never invest in an oil company or an oil well. Invest in the things that oil companies must have to get oil out of the ground and things they must have to refine oil or transport oil.
 

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The problem is there are no more places to store it; everything is full to the brim and everybody is still producing with demand way off.

I expect it will go a bit lower.
 

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I wonder if this means revolution in countries they have bought off the population with oil dollars
 

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The problem is figuring out which player to bet on..
The majors should survive I guess..
A lot of smaller players might go under..

I think a refiner, like PSX is a good play
If you don't want to choose individual stocks XLE is about 45 percent in XOM and CVX divided pretty close to equally between the two. For global exposure IXC is about 13 percent each in XOM, CVX and RDS, about 6 percent each in BP and TOT. PSX has been among the better performing energy stocks, perhaps more accurate to say least bad performing. CVX has committed to maintaining the dividend, XOM will probably as well. COP chopped theirs in the last big oil downturn. Yields are pretty high right now. You pays your money and you takes your chances. FWIW I'm overweight energy stocks, also underwater on them for the moment.
 

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I'm still in Exxon until they cut the dividend. At today's open the dividend yield is over 8%.
 
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Got the car filled up and no place to go! Everything is closed anyway! $1.26 here.
Hike the Wichita Mountains or the Black Mesa. Two of my favorite spots in Oklahoma.
 
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The problem is there are no more places to store it; everything is full to the brim and everybody is still producing with demand way off.

I expect it will go a bit lower.
Yup...companies are filling up tanker ships and parking them offshore.

With so much cheap gas, if we get the economy back open in a reasonable time, we could have a record summer for travel by car. I'm the eternal optimist, I guess.
 

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Don't Jump!
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They don't call it the LAW of supply and demand for nothing. The price of oil has been manipulated for decades... but they can't beat the law forever.

They pumped so much oil that they have run out of places to put it. There are hundreds (maybe thousands) of full tankers floating around on the world's oceans with no place to go. (And that's a disaster waiting to happen).

https://www.msn.com/en-ca/finance/t...999-as-world-drowns-in-oversupply/ar-BB12Vg0h
 

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They don't call it the LAW of supply and demand for nothing. The price of oil has been manipulated for decades... but they can't beat the law forever.

They pumped so much oil that they have run out of places to put it. There are hundreds (maybe thousands) of full tankers floating around on the world's oceans with no place to go. (And that's a disaster waiting to happen).

https://www.msn.com/en-ca/finance/t...999-as-world-drowns-in-oversupply/ar-BB12Vg0h

Supply and demand is not just a good idea.


IT’S THE LAW.
 

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Horselover Fat
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Investors Are Being ‘Fooled’ By Low Oil Prices, Analysts Warn

Investors are being “fooled” by low oil prices,Commerzbank warned on Monday as WTI crude futures slumped to the lowest level since 1999.

The May futures contract for U.S. crude oil plunged 40% to $10.84 per barrel as the coronavirus pandemic put further strain on demand and fears over crude storage intensified. The May contract expires on Tuesday and the June contract was trading 9% down at $22.71. The spreads between the front month and contracts for later delivery were the largest since Feb. 2009, according to Dow Jones Market Data.

Commerzbank analysts, led by Daniel Briesemann, said investors, especially retail investors, were being “misled” by what appears to be a low oil price.

“In the hope that prices will rise, they are now buying up shares in exchange-traded oil ETFs on a massive scale,” they said.

Net long positions in oil ETFs registered by Bloomberg have reached their highest ever level, they noted.

“It seems that many investors, even after all these years, have still failed to grasp that, unlike with stocks, it is not physical oil that they are buying but merely individual futures which then repeatedly (normally on a monthly basis) roll over.

“Those investors who are betting on rising prices will not profit at all from the “increase” in the WTI price following the contract rollover on Wednesday because the subsequent June contract is trading at around [$22] per barrel.”

The analysts said that institutional investors had also “allowed themselves to be fooled of late” by Opec’s decision earlier this month to cut production by 9.7 million barrels a day and by historically low prices, also increasing net long positions........

https://www.barrons.com/articles/in...d-by-low-oil-prices-analysts-warn-51587397151
 
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