I have 20ish years before i retiring, but I don’t rule out dipping into my stock investments and transferring towards real estate. Have an eye out now actually.
OT: Stock and Investment Talk
- Thread starter RU-05
- Start date
Always good to diversify, but stocks will return much, much more especially coming out of a bear market.
It also helped that typically when it came up it was meaningful and relevant, not people taking potshots at “libs” and the “GQP”.
I have the real estate I want. Retirement is taken care of. Now just saving for granddaughter’s college and most likely money that will be left to my daughter.
It really makes down markets less of a worry at this point.
And a RE market which is still near its high.
But im not in a rush. Just have an eye out there.
Looking at US oil production and a couple things which i see as interesting.
1) While production has slowly marched higher from may 2020 lows of 9.7 million barrels a day to 11.8 million in july(latest reported) its still well below all time highs of 13 million barrels from Nov 2019.
1)Earlier this year. As Russia began its invasion and oil prices spiked, US production dipped from 11.1 mil in Jan to 9.9 in feb. Production quickly rebounded back to 11.3 mil in March, but that sharp one month decline surely played a role in that spike in prices.
Will be interesting to see if, and how much US production picks up in light of Opec announcing a cut back in their production.
1) While production has slowly marched higher from may 2020 lows of 9.7 million barrels a day to 11.8 million in july(latest reported) its still well below all time highs of 13 million barrels from Nov 2019.
1)Earlier this year. As Russia began its invasion and oil prices spiked, US production dipped from 11.1 mil in Jan to 9.9 in feb. Production quickly rebounded back to 11.3 mil in March, but that sharp one month decline surely played a role in that spike in prices.
Will be interesting to see if, and how much US production picks up in light of Opec announcing a cut back in their production.
very interesting to see what happens given the admins progressive attitudes towards energy in general. For them to do an about face and push for more investment, open leases and redirect dollars to non green will be very difficult to message to their base. What is needed is for realism in energy needs vs energy wants. I see elevated energy costs over the next few years (hoping I'm wrong) but the impact to this will be realized as consumer spending habits shift impacting the mkts etc
But oil production has increased steadily during his brief tenure. The one month dip in February of this year surely had nothing to do with policy.
We shall see how US companies react to the OPEC move.
? policy has restricted expansion of leases, land, and new rigs. All new drill sites require massive gov't involvement from acquisition, lease, approval, etc etc, it's not easy any longer. Production of existing facilities increased but that is not going to suffice in a year plus. Ironic that the administration has approved foreign leases however, 1 coming online next year near Alaska's north coast.
Now you take Europe (no lng, nuke power plants shutting down etc etc) and we're going to hit a wall where we'll need substantially more than the mkt has. Why do you think the world leaders were trying to pressure in Opec in Austria? Green leaders can't go back and reverse what they are doing, hell, some leases only come up every 3yrs per law in the states and nearly 35% of those were not renewed by Biden last yr. Germanys' last 2 nuke stations are set to come offline in Dec of this year. I wonder, doubt, but wonder if France will be able to export excess energy given they are in best position with nuke power and do not rely on lng etc.
energy is going to be a problem, prepare accordingly
do love me my exxon shares at mid 30s though I did reduce significantly in the 90s and now only hold about 2k shares. I am now restricted in what I can own so no more individual buying of stocks from self directed accts
If oil production was maxed out on every existing piece of oil producing land, where would it get refined?? The limiting factor for this country's oil production is refineries which we are woefully lacking.
But production has increased steadily during his tenure. Except for that one month blip when oil prices streaked higher.
i do remember Devon saying after their 2nd qtr conf call that they wouldn’t be expanding their operations because they didn’t think prices would remain as high as they were. Seems they were correct. But maybe they and other companies change course given opec restricting production.
The 3-1 put was a short term trade heading off a rally and into a traditionally down month. Factor in the 200 dma resistance.
I just made a meaningful committment to energy because of the OPEC change to production. Also the fact that we have Biden who will not allow U.S. producers to increase output or investment Its a recipe for higher energy prices.
But again us producers have steadily increased production since he took office. Can’t say he is not allowing it while it is actually happening.
what was your meaningful commitment? Were you not in energy prior? I believe you said you sold everything in February?
I was in energy previously and made alot of money in it. sold my energy positions in June. But recently bought back in as Biden releases from the SPR are almost at an end and supply will be coming down. This will be good for producers, tight supply, higher demand leads to higher prices.
05, it is important to understand that a lot of fracked shale oil production from previously developed wells kicked in due to the high world oil prices. These assets have relatively short lives and this production is not sustainable. Producers have not been investing in long term "new" production for a number of reasons. Foremost was that investors got burned relatively recently by emphasizing output over profitability. When oil prices crashed, all of the debt associated with those large capital projects became distressed. Now, cash flow is king. Add in a very negative regulatory environment from the current admin, despite anything they say about leases, and rising interest rates, the risk for new development is too high. Sure, if prices remain high risk takers will finance new production. But it will be slow and painful.
Can’t imagine this will end well
stocks.apple.com
Shorting Is All the Rage for Retail Investors as Stocks Plunge — Bloomberg
After a brutal few months, small-time traders have been trying to recoup losses by betting against the market.
It definitely won't. When the market turns, it turns quickly and rapidly.Can’t imagine this will end well
Shorting Is All the Rage for Retail Investors as Stocks Plunge — Bloomberg
After a brutal few months, small-time traders have been trying to recoup losses by betting against the market.
If retail was net short from Jan to Aug then they did quite well.Can’t imagine this will end well
Shorting Is All the Rage for Retail Investors as Stocks Plunge — Bloomberg
After a brutal few months, small-time traders have been trying to recoup losses by betting against the market.
Except we haven’t seen a dramatic increase in production which appears to follow the dramatic increase in prices.
Yoy production in the month of july shows 11 million barrels in 2020. 11.3 in 2021. And 11.8 in july of this year.
it’s true I don’t really understand why oil production in this country has followed the path it has. But i have seen multiple producers come out and say we could produce more but we’re going to stand pat for now.
I also look at the chart and say: hey we drastically cut production just as prices were surging.
Refineries, refineries,refineries.
US refining capacity falls to lowest mark in 8 years amid record prices: EIA
The nation's capacity to refine crude oil into fuel and other products fell below 18 million b/d at the beginning of 2022 and hit its lowest level since 2014, according to the federal government's ann
FYI…GDPNow estimate update today shows it’s up to 2.7% annualized for Q3.
Look at the insane numbers in this LNG article:
On Sept. 26, Pareto analyst Eirik Haavaldsen predicted that liquefied natural gas shipping rates could top $1 million per day in the fourth quarter. At least some deals are already halfway there, according to a report on Monday.
Paying a million a day may sound crazy. But it all comes down to the profit a shipper can make on a cargo. If a shipper can make $200 million in profits moving a single shipload of LNG, it will pay six figures a day in freight. Or if Pareto is right, seven.
www.freightwaves.com
On Sept. 26, Pareto analyst Eirik Haavaldsen predicted that liquefied natural gas shipping rates could top $1 million per day in the fourth quarter. At least some deals are already halfway there, according to a report on Monday.
Paying a million a day may sound crazy. But it all comes down to the profit a shipper can make on a cargo. If a shipper can make $200 million in profits moving a single shipload of LNG, it will pay six figures a day in freight. Or if Pareto is right, seven.
LNG shipping rates ‘shooting for the stars’ at $500,000 per day
With war raging and pipelines sabotaged, shippers are paying astronomical sums to transport LNG across the oceans.
www.freightwaves.com
I didn’t even realize the late day rally.
Off that mini 2 day rally, people bought todays dip. Thats a good sign right?
Off that mini 2 day rally, people bought todays dip. Thats a good sign right?
Very good sign. The market is ready to buy any and all good news. Still plenty of potential bad news still around, but the market wants to rally.
Lots of moving parts. So while some point to production rising under JB, and you rightfully point out that simple economics would have merited a greater surge in production, lack of investment by producers since the oil collapse in 2014/2015 has really crimped this. As I mentioned above, previously fracked wells could be brought on very quickly and at a low cost which accounts for the relatively recent increases in domestic production. But absent this fracked but not producing production, there would have been a decline. Had the industry invested more over the last 8 years, current prices merit much more production. It is a cyclical industry. High prices drive new production. Higher production puts downward pressure on prices. It takes years to get new production on line with all the environmental/regulatory oversight. Don't know many producers holding back production at current price levels for oil as their investors are focused on cash flow.
First let me start off by saying im enjoying the discussion. So don’t take my replies as overly argumentative.
To the point of the discussion, you say investment had been lacking since 2014 yet production continued to increase rather dramatically until reaching an all time high in dec 2019. So im not sure if that adds up.
@ScarletNut has been pushing the refinery narrative above. So i read an article from the Washington Post from back in June. And the sense i got from that is that Biden’s policies aren’t directly affecting oil companies ability to produce and refine but the policies to push fwd ev and green energy production and the auto/energy industries massive investment into those green energies has oil producers saying “demand is going to decrease dramatically in the future we should not be investing into this”.
Now back to Nuts point i imagine its relatively cheap to set up wells, but extremely expensive to build new refineries, or even to modernize old ones. Apparently when oil nose dived during early covid some refineries went belly up. Now is that where the 1 mil barrel a day capacity disappeared too after covid?
If so then current bottle necks are the refineries but the bigger issue is energy companies both carbon based and green energy think green energy will increase dramatically while carbon based will be on the decline. Seems this could be the last sip from the money well for oil.
This post, scarletnuts post and pats post are all great posts for those of us who would like to learn and develop an informed opinion on this issue
Understood, and I'm sure that there are others who are more knowledgeable than me. If this was easily understood, we wouldn't have such wide swings in oil prices. Keep in mind that it takes years for excess investment/production to reverse itself. Tons of sunk costs developing reserves (financing, regulatory, legal), equipment contracted, shipped, and placed on site. Trump was very pro energy independence and reduced the roadblocks for developers (some greens would say way to much). Biden's policies are very much impacting the risk for developers, ask any oil executive. Sure, future domestic demand will certainly go down but worldwide consumption will continue to increase. Oil executives are also facing massive ESG pressure from Wall Street. The warning is clear, leave the oil in the ground or else we will cut you off. Oil went from over $100/barrel at the beginning of 2014 to falling below $30/barrel in Feb 2016. Lots of problems, bleeding cash with excessive debt based on high oil prices. Models were built using a conservative $70/barrel assumption that showed high returns. Those don't work very well below $50/barrel. Bankruptcies and consolidation. Steady price increases thru Oct 2018 (over $73/barrel), companies recovered and even began investing in production but at much lower levels than pre-2014. Covid hits, demand disintegrates, no one driving, world comes to a halt. We are now recovering from Covid and demand is steadily rising. Supply has not keep up pace. Prices rise. I agree that we have a shortage of refineries. But oil is a world commodity. India has been aggressively building refining capacity. Producers don't really care if they sell to a refinery in Lake Charles or a foreign refinery (net of transportation costs).
Was it Obama’s policies that drove oil prices down between 2014 to 2016 and how were those policies different from Biden’s?
All good points, especially your very last line. If producers are selling oil overseas because refineries can't keep up with current production numbers, that's the major issue IMO. I don't see it resolving either since no one wants a new refinery in their district.
I still remember Obama deftly handling a question on energy during his debate with Romney. Keep in mind that he was strongly supported by those opposed to oil drilling (greens). He just said that he had opened more public land for drilling and supported the industry and their workers. Romney should have jumped all over that answer but failed to (very bright guy, maybe had lost his fastball by that point). I was stunned watching that. Obama was doing much the same as Biden in regards to imposing a harsh regulatory regime to make it more difficult/expensive to develop reserves and drill.
To anwer your question, crude prices fell in the 2014-2016 period due to the fracking revolution, despite higher regs. Oversupply pressured oil lower. Lower oil prices, in turn, spur increased demand and the next cycle begins. But greens hate low oil prices, they make renewables less competitive. Anything that can drive up oil prices including the taxing of it they will support. But fracking had another element. It drove down the cost of natural gas which made cleaner natural gas burning power plants much more competitive which drove down electricity costs which drove coal-fired plants out of business. This was the primary driver of reduced CO2 emissions in the US. The US went from constructing LNG IMPORT terminals to converting those terminals to export our bountiful fracked natural gas. 180 degree change.
An investment strategy that is LONG OVERDUE
https://www.zerohedge.com/markets/booya-behold-inverse-cramer-etf-has-finally-arrived
https://www.zerohedge.com/markets/booya-behold-inverse-cramer-etf-has-finally-arrived
AMD warns of third quarter revenue shortfall on weaker PC demand, supply chain issues
https://www.cnbc.com/2022/10/06/amd-warns-of-third-quarter-revenue-shortfall-on-weaker-pc-demand-supply-chain-issues.html?__source=iosappshare|com.apple.UIKit.activity.CopyToPasteboard
AMD issued preliminary third-quarter results on Thursday that are well below its initial guidance.
The company reported preliminary quarterly revenue of approximately $5.6 billion. It had initially said it expected $6.7 billion in revenue for the quarter, plus or minus $200 million. AMD also said that its non-GAAP gross margin is expected to come in around 50%, while it had previously expected gross margin to be closer to 54%.
Tomorrow might be another down day.
https://www.cnbc.com/2022/10/06/amd-warns-of-third-quarter-revenue-shortfall-on-weaker-pc-demand-supply-chain-issues.html?__source=iosappshare|com.apple.UIKit.activity.CopyToPasteboard
AMD issued preliminary third-quarter results on Thursday that are well below its initial guidance.
The company reported preliminary quarterly revenue of approximately $5.6 billion. It had initially said it expected $6.7 billion in revenue for the quarter, plus or minus $200 million. AMD also said that its non-GAAP gross margin is expected to come in around 50%, while it had previously expected gross margin to be closer to 54%.
Tomorrow might be another down day.
The monthly jobs number comes out tomorrow morning too. Maybe a weak number coupled with corporate warnings like AMD could lead the Fed to take their foot off of the accelerator
As soon as they take their foot off the accelerator inflation will come roaring back. Fed is in a box.
