Hello there…
Oil prices are facing strong upward pressure in the coming weeks. I would like ideas on what products would be smartest to take a position on oil price changes, without costs eating into potential returns. The floor is open..
Apologies for going off-topic from your question, but having followed the news this weekend, it seems that the UK/USA is responding to Iran’s actions mainly with political/economic sanctions.
Western countries know that Iran has an advantage in Hormuz and that a military conflict would hit the entire Western world harder than Iran.
My own conclusion from the situation is that the aforementioned sanctions are not enough to significantly raise oil prices anymore, meaning that perhaps small quick profits can be made by trading around the 60 USD/barrel mark. I wouldn’t expect any “huge surge” unless a larger armed conflict arises.
Feel free to disagree 
1 Like
In my portfolio, <5%: OP-Russia (which, of course, includes much more than just oil stocks), Exxon, Equinor. A relatively stable strategy for over 5 years now.
It will be interesting to see how the weekend events at Aramco’s refineries shake up oil prices. Nordnet has unlimited turbos for oil with approximately 4-16 leverage. Luckily, you can’t invest in them before Monday at 9:15 AM. For those better informed, CME has the WTI future CL and Brent future BB. Trading for those starts on Monday morning at 1 AM.
Yeah, you’ve had to hold on to your hat in the markets while riding the oil wave. We’ll see when we hear more from Aramco, then we’ll know when to jump off.
1 Like
The severity of the Saudi Arabian refinery attack will only be revealed in a few weeks. Until then, there might be all sorts of speculation, everyone has their own interests. Aramco needs to appear strong, hard to wound, etc. That 5% Aramco slice has still not been taken to the stock market.
Oil is coming down nicely. What’s pushing it down?
It’ll be interesting to see what comes of the oil shock. The end of the cartel and a playoff? At least in Russia and the USA, upstream costs are so high that a price level below $40 will quite soon cause some headaches in many government meeting rooms. I wouldn’t be surprised if OPEC+ met at the negotiating table later this month - and Russia less defiant than last week.
In my own small portfolio, there’s a very thin slice of a couple of upstream companies. Both slices have been chopped down by about 26% today.
3 Likes
Here’s a good article on oil companies’ hedges and indebtedness:
https://seekingalpha.com/article/4330759-shale-marked-for-death-who-dies-who-thrives
3 Likes
Oil tankers are in great shape, as I suspected in the Neste thread: TK +24%, FRO +14%, NAT +20%, and so on, quite a ride.
1 Like
Occidental Petroleum, in which Warren Buffett invested billions, cut its quarterly dividend from $0.79 to $0.11 and lowered its capital expenditure (capex) from $5.3 billion to $3.6 billion.
Tanker companies are doing great, but does anyone know what’s weighing down the high dividend payer Knot Offshore Partners? The dividend at these prices is already over 16%. I don’t see any other reason for the stock’s decline than general panic…
Based on a quick glance, the situation for E&P sector service companies is dire. For example, PGS has fallen ~80% since late January, as have BWO and Seadrill.
Thinking about investing in oil in the near future. Direct stocks or funds, and which ones? Shell and Exxon are on my mind, but would a fund provide a smoother ride?
I’m also interested in investing in oil. I haven’t really followed that industry much before, so good suggestions are welcome.
Russia was, to some extent—at least in its power-flexing statements—prepared for the price of oil to drop to 30 dollars. Now Brent is below 25 dollars. Perhaps Russia is gradually starting to want to return to the negotiating table.
Oil is starting to reach ATL (All-Time Low) levels, when taking inflation into account. Which instruments should one use to take out months-long positions? Turbos?
2 Likes
Views from two Russian energy policy experts on the ongoing oil war. The article’s multifaceted focus is on Russia; Saudi Arabia’s and the USA’s market positioning are only briefly touched upon. The article also includes a link to a podcast discussing the Nord Stream 2 gas pipeline, which also highlights Fortum’s and thus the Finnish state’s “environmental policy” interest in the pipeline.
2 Likes
Investing in oil companies is also investing in the underlying commodity; the prices and returns of commodity companies strongly depend on the price of that commodity. One could think that if one buys an oil company now, one is taking a view that the price of oil will rise. On the other hand, the valuations of oil companies have also fallen due to the unpopularity of this form of energy. Sounds like a buying opportunity? I’ve added Lundin Petroleum and Aker BP to my watchlist, but I haven’t had time to delve into either yet. I should also study the general market outlook in the industry and try to assess the development of oil prices.
I just noticed that a modest sum of dividend from a company called Lundin Energy had dropped into my account yesterday. Nice, even though I didn’t know I owned shares in that company; it seems that Lundin Petroleum has changed its name without me noticing. Is this just cosmetic, or is there a corporate restructuring or something similar involved?