Remember when people were loading up on oil stocks at $125+ oil.... Wait till you see $25 a barrel, then $20, I think we could get down to $15 a barrel, gas will be $1.00 a gallon soon, this will be great.....$100 oil is decades away and $200 oil probably never. PEAK OIL??? Whats PEAK OIL??? CAN OIL BULLS PLEASE EXPLAIN...
The front month is. The feb contract is 42.31, the march is at 45. This is just an expiration related selloff in the jan contract. Crude is still holding steady since the output cut out into the future.
I'll be the first to admit, I never saw prices coming down to these levels, even when I was bearish at those nose bleed levels last summer. Considering the velocity of this move combined with literally a handful of threads a day for probably 2-3 months about guys "buying the dip" in oil and oil stocks, this move parallels that tech crash in severity. The fact that the media pays little attention to commodities makes this something of a silent massacre.
Considering the oil market of late, I admire your confidence. So far no indication of correction whatsoever. This is no prediction. Odds.Odds.Odds. And nothing beyond that.
I disagree. The major integrated oil producers could easily go back down and re-test their lows of October. For that, XOM could fall back to $56. Stocks like XOM and CVX became a "cash-cow" trade and thus easily outperformed the market ( ie. XOM rallied from $56 to $83 ) as portfolio managers were able to put large sums of funds to work in names that had safe dividends due to pristine balance sheets. In fact, XOM rallied 50% from October till this last week, even as crude oil dropped 50% from $72 down to $36 today. This sector outperformed on the upside and has a lot of ground to make up on the downside in my opinion. See chart attached, care of ET member Mup.
Estimates of oil exploration and development costs and the bill for running existing oilfields vary greatly depending on assumptions about financing, tax and the size of fields. In 2006, The average âliftingâ costs (the cost to bring a barrel of oil to the surface) ranged from about $4 per barrel in Africa to about $8.30 per barrel in Canada. the average for the U.S. was $6.83/barrel, $5.26/barrel in the Middle East1 to $63.71/barrel for U.S. offshore. (excluding taxes) since 2007 is much higher, (between $2 and $13 higher).