>tfw put 20% of my liquid wealth in big oil expecting support
>no support
Down 5% in two days fml senpai
>>995052
That's only 1% of just your liquid assets. You'll be okay.
Sell all your oil assets if they get high enough for you to make at least some cash.
Oil is becoming less and less reliable of a source of shekels every year
Oil boom is going to be glorious but might take a few years.
Safe thing to do is wait for substantial drawdowns several months in a row and then get on the train.
>>995052
/pol/ here
Can somebody tell me why the price is so low? I have no clue what the fuck is going on and everybody says it's artificially low based on demand and I can't tell if they're right or not.
I know it's rough anon, but in the scheme of things 5% is nothing. You have to be in this for the long haul. Picking a bottom in a market is an extremely hard thing to do. Support from previous lows may not hold, but they very well could hold.
Target the low of 2008.
>>995401
The price is low because Saudi Arabia wants it to be low. They are the lowest cost producers in the market, and they want their market share back that was under threat from the US oil boom.
So, what's going to happen? They are going to keep the price of oil below cost of production for American producers so they go out of business.
The world has not shaken it's demand of oil, if anything, we'll use more of it now it's temporarily cheaper.
>>995414
>>995401
oil is low to hurt the Russian economy who rely greatly on oil exports all this started after the annexation of Crimea. Saudis would not lose hundreds of billions of dollars to kill of the smalls stake shale oil had, which you cant anyways were still drilling although a lot less. As soon as oil goes up again all those comparatively small drillers will start turning again.
>>995052
Have you been paying attention? Did you do any research? What the fuck made you think oil had found a bottom? Sell or lose more money. Every producer is running at 100% because they're all up to their eyeballs in debt. The only reason half of them are still in business is because their production is hedged. Once 2016 hits and those hedges start coming off you're going to see a bunch of weaker players fold bit they're going to pump every drop they can to prevent that. Short oil or GTFO on the first bounce you can and don't even think about going long at least until 2017.
>>995414
>>995332
Dem 7% dividends which have increased for 100+ years were too enticing
>>995368
>>995414
We've been seeing falls for so long now I fell for le catching le falling knife meme.
I don't get why they Saudi keep going though. Once shale producers go under, the price will rise and they'll slowly reenter the market to retake market share. Saudi are even suffering a lot themselves
>>995426
I have a very strong player so I think I'm going to hold for many years and go down with this ship. :^)
Not a lose until I've realised them, r-right?
Oil prices are going fall even further. The oil market is dead. Saudi Arabia is projected to be broke in five years. China and India have lower imports of oil in the past three years. They're increasing natural gas imports. This is a sign they're moving toward CNG/LNG transportation economy. Iran and Libya oil is about to rape the market. We can expect 25 dollar a barrel in the next year. Oil companies are posting record losses and announcing lay offs.
>>995517
I'm in Shell and they're buying BG so they're aware of this if true. I still think that we're oil is being kept artificially low by excessive supply. Oil is used in almost every supply chain so it's hardly dead.
>>995052
Why the hell did you invest in oil now when nearly all analysts have predicted a very slow recovery?
Shale oil has also changed the oil game completely, desu.
>>995651
I invested in stocks because their earnings to price and price to book ratio and their position in the industry and well vertically-integrated model of business made it seem very undervalued desu senpai. It provides income and their refinery business is doing well from lower prices desu.
>>995605
They're trying to move to natural gas because its cheaper to extract than oil these days. Plus it meets carbon emission standards without raping your company network of infrastructure. No one want to stop pumping because its a dick waving contest on who can last the longest. The US market can support this glut, while OPEC cannot. Their economies are dependent on the high price of oil barrels. We may see the shift of oil power to the Canucks/US/Venezuela/Russia.
>>995052
>have sold a 75put in TNA every week from now to jan
>thought last week "hey i made my goal, why not just close out?"
>"naw fuckit it'll be fine"
>now mf
I have my savings in american dollars.
But I currently reside in Mexico and want to buy a car, should I bail now and sell for pesos while the mexican peso has hit it's maximum low which is 17.65 per dollar.
Economist has expected to hit a maximum of 16 for the end of 2015 but they got it all wrong, the low price of the barrel of petroleum is raping the mexican economy.
Should I bail or wait, is the oil prices gonna lower even more?
Please help I am a total retard for economics.
>>995052
I bought Alcoa at 7.88 and it's at 8.84 and dropping. It went up to 10.80 or so and I feel like I shoud've sold then. I'm losing 4 percent this year on my 401k which means I've lost over 16 thousand dollars. I'm seriously on the verge of crying. I hate being poor so much.
>>996424
Just ask yourself, "What do the cartels use?" and use that.
>Protip: It's probably not Pesos.
>>996424
personally am bullish on the USD, why not hedge and buy some pesos now if you're worried?
>>996426
Yeah but I'm thinking in buying a car not guns from the cartel.
>>995052
>$35
Holy fucking shitballs.
>>995948
>The US market can support this glut, while OPEC cannot. Their economies are dependent on the high price of oil barrels. We may see the shift of oil power to the Canucks/US/Venezuela/Russia.
Saudi Arabia's break even is in the $20 range. OPEC varies in production costs, which is why they were all bitching to the Saudis in the last meeting.
It makes absolutely no sense for oil production to end in Saudi Arabia and move to higher cost production in the US and Canada. No sense at all.
>>995426
This is the best post on the subject.
>>995512
>I have a very strong player so I think I'm going to hold for many years and go down with this ship. :^)
Not a lose until I've realised them, r-right?
Thanks to you, and market participants like you, one side of the market is making oceans of cash. Commodity trading rule #1: Buy Strength; Sell Weakness.
>>995424
No. Crimea happened in early March 2014. OPEC decided to protect market share in late November 2014.
The two events have no connection.
They are trying to protect market share like they did in the early 80's and late 90's.
>>996886
You don't get my cash until I sell senpai.
I'm holding forever. Going down with this ship!
>>996600
That's the breakeven cost of production, but in order for Saudi to match government spending they need about $60 per barrel. They're borrowing atm.
>>996922
And they have a 1.2 trillion dollar sovereign wealth fund, and no debt. Their bonds fetch 2% interest over 30 years.
If OPEC made it through 85' and 98' they'll make it through this rough patch.
Buy it all and hold for a couple years. OPEC is getting a new commish in June that will listen to the smaller players. If you wait for the glut to end to buy into oil stocks, the market will have already priced in 50% of the recovery. Purely from watching the price action, I would say the MMs are readying for the rebound. Natgas stocks getting killed going into winter is ridiculous. Once again, market discounts future cash flows. If you don't buy now, you miss half the recovery. Just make sure your picks will make it through
>>996930
I reckon Shell as one of the largest oil companies will be fine.
>>997013
Yes lol RDS, XOM, BP, COP any of the majors arr absolutely safe and excellent investors. Dont listen to these clowns and their 2 month timetables. If any of the smaller shale E&Ps go under, who is gonna pick up the assets? Once the majors take complete control of US production and the export ban is lifted, we become OPEC. The only thing I would say about owning one major is you could have another BP spill incident that could cost you a lot. I would diversify within the sector a little more but thats just me
>>996916
You are wrong. You paid X for your equity. Seller receives X.
Price drops to X -10. Your value drops by 10. Seller's value increases by 10.
Seller buys back the stock at X -10. Thus position closed on sellers side. Your side, buying, still open.
Your value is now X-10. Your value has lost by -10. Your money is gone despite keeping the stock. Money is value. Mark to market is the rule. Seller wins; you lose even though you haven't closed the position: the money is gone.
I'm gonna buy the shit out of XOM and enjoy juicy dividends whilst catching the oil recovery ride. Suck it nerds
>>996425
keep adding to AA i have a feeling it's going to boom, big money accumulates at the price they want it at over the period of months and then sell it at the price they want to sell it at.
I have a feeling that's why AA is moving sideways, everyone is trying to pick up below 8.50
bids don't budge and the ask is only the shorts trying to shove it down so they can cover, just look at AA short interest
>>997129
>tl;dr I make shit up
The money isn't gone because your whole "X-10" can change over time, as it often does, and become "X+10" or any other gains. That's the entire point of holding long.
>>997247
Careful anon,
Solid oil stocks like XOM, CVX, and BP haven't declined much at all from the oil glut. So many people want to secure longterm oil profits that their purchases of these companies are keeping the prices up. I'd recommend looking at companies who have the glut priced in but still have a solid chance of surviving, like SWN and CNX.
>>997296
Then you don't have a gain until that happens. You just proved my point.
>>995052
Thank you based Holobro.
>>997357
>don't have a gain until that happens
>that money is "lost"
What is object permanency
>>997310
what about OAS?
>>997019
The flaw in your scenario is US shale isn't profitable under $50/bbl.
>>997513
It doesnt matter. Saudis arent profitable from a national standpoint under $50 either.
>>996911
This, desu. Only correction I would make is that the dates are a little early. More like early 70's to early 80's
>>997542
>Saudis arent profitable from a national standpoint under $50 either.
They don't have to be profitable like US domestic oil and gas producer. If SA unprofitable, so what? If US domestic producer unprofitable, bondholders go nuts, company files for bankruptcy, Oklahoma petroleum engineers start working at McDonald's if lucky.
Pic related: Oklahoma crude oil marketer.
>>997649
If Saudi oil is unprofitable they go broke. There is no GDP in SA outside of oil
>>995426
1. Be forward thinking. Most of what you said about production would be priced in, and therefore there's less events that can happen that would drive the price lower in the long term.
2. They're running at 100% of current wells but many smaller companies cut the majority and even all of future exploration and drilling. This means they are running current wells only to service debt which will eventually run dry. Remember, people don't like to work for free.
3. Once new futures contracts get struck in quantity at the lower price, it'll really drive out some players in this game.
>>997701
Saudi oil isn't unprofitable at these levels though. That's why they are pumping.
They wouldn't intentionally shoot themselves in the foot, they know exactly what they want to achieve and how to go about it.
Knock the high cost producers out of the market and reestablish market dominance for a few years.
>>997129
>tax harvest
>>997310
that's because they still make money even though oil prices decline. they're vertically integrated. they will just be less profitable. the operative term here being profitable, not hoping to survive
>>997714
Everything you are saying is true, but the key will be to buy when oil hits the bottom.
$35?
$32?
It could potentially overshoot the 2008 low and we hit the $20s for a short period before a rebound.
>>996600
Their total break even point is 104$. Check the latest IMF report.
>>996929
They have 500 billion, and they're losing money every year.
http://www.breitbart.com/national-security/2015/10/22/imf-predicts-saudi-arabia-bankrupt-2020/
https://www.imf.org/external/pubs/ft/reo/2015/mcd/eng/pdf/mreo1015.pdf
>>996600
Well you are right about that not making sense. I cant even
>>997724
They could drop to 15 trillion in debt and still not be as broke as the USA. Plus any nation would gladly suck their dick in the form of loans to secure good agreements when oil goes back up.
They'll be in this for a while.
>>997752
The US can afford the debt because it pays back the interest. You should research on debt works.
>>997753
I don't even know how to respond without sounding insulting.
Do you think the USA is the only nation that can pay back interest? My point still stands, the Saudis can go heavily into debt and be fine, them reaching $0 in cash reserves will have no effect.
>>997756
You don't know what you're talking about. The issue becomes a problem when you can't fund your budget every year. Google debt to GDP ratio. Saudi Arabia is borrowing money already to meet their daily expenditures. They need 104 dollars a barrel to meet their total government needs. Saudis are also lazy fucks who refuse to work. Other OPEC nations are in freefall and some are in political turmoil.
>>995052
oil right now is a bad idea.
>>997762
Yes, and they can borrow money to pay their needs and use their current meager profits to pay the interest. Shit like that is how you get 15 trillion in debt in the first place, and it worked great for us.
You're an actual idiot if you don't understand this. They can lose money for decades and still emerge victorious, especially if they buy out the rest of dying OPEC which was in their plans all along.
>>997756
You dont seem to understand bond markets. You know the premium on a US Treasury Saudis would have to pay for a 30 year? Once again, they have zero GDP outside oil. Ask yourself what % it would take you to buy a Saudi bond over a US bond
>>995052
All I have to say is sell. Get the hell out of that coin flip of guessing where the bottom is.
>>996911
I meant to say that the cross-hairs were put on the Russian economy after Crimea. No way Saudis would lose hundreds of billions to stamp out shale oil which is impossible. You guys need to see the big picture and pay more attention to geopolitical events.
OP here.
Getting absolutely BTFO rn desu.
