The Purge

PvP for People Who Aren't Asshats
It is currently Fri Jan 19, 2018 5:11 am

All times are UTC - 5 hours [ DST ]




Post new topic Reply to topic  [ 34 posts ]  Go to page 1, 2  Next
Author Message
 Post subject: Buy Oil?
PostPosted: Fri Dec 05, 2014 8:32 pm 
Offline
Member

Joined: Fri Mar 18, 2011 3:49 pm
Posts: 8145
So Oil is incredibly low right now... and odds are it's going to go back up.

I'm asking as an ignorant stock guy, so if something sounds stupid...

From my quick research, buying into the United states Oil fund is like buying into barrels of oil(although it doesn't seem to be a 1 to 1 comparison as Oil is like $65 right now and the stocks are right about $25.

To the ignorant stock guy, this seems like an easy win... why is that wrong?

_________________
I don't own kid gloves.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Sat Dec 06, 2014 5:56 pm 
Offline
Member
User avatar

Joined: Tue Jul 15, 2003 5:10 pm
Posts: 3677
Location: Adamstown, MD
I agree it will probably go up again. But like the Russia thread, the tough part is figuring out when. Oil is at $66 right now. If it drops to $53 you're down 20%. It it drops to $33 you're down 50%. I read a lot of articles over the months saying the absolute floor would be $80, or $70, but we blew through both those.

In 2008 it fell from $144 to $37, before eventually getting back over $100, but six years later it's still never got even close to those 2008 highs.

I bet on Apple (with stock options) all the way down, thinking time and time again it couldn't go any lower, and that the drop didn't make any sense. And it didn't, which is clear from the fact it's been making almost daily new all-time highs for weeks. But it took a lot longer for the market to figure that out than it did for me to. :) My AAPL is up huge right now (and I have January options up 450%), but I also had a ton of options expire worthless earlier in the year...

_________________
Ex SWG, L2, CoH, Wow, and War
Currently PvPing in the stock market


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Sat Dec 06, 2014 8:07 pm 
Offline
Member
User avatar

Joined: Sat Sep 06, 2008 7:18 pm
Posts: 937
Location: Minnesota
I would give it a year before it goes down, and then buy since that is what I do for a living.

_________________
WoW level 80 Mage cricec, 80 Paladin Rainbowkitte (retired)
Eve-Online 9+ years crice, Double G, Galahade (retired)
AION crice level 43 cleric (retired)
Star Trek Cr'ice level 41 Klingon engineer (retired)
Global Agenda cricec level 30 Assault (retired)
Rift Zeranna level 50 AssBard (retired)
Star Wars The Old Republic Crice level 50 sorcerer (retired)
Guild Wars 2 Cricec 80 Elementalist (retired)
Naval Action crice (retired)


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Dec 08, 2014 1:29 am 
Offline
Member
User avatar

Joined: Sat May 10, 2003 6:48 pm
Posts: 9266
Seems to me that opec new strategy is to get prices to a point where shale and fracking cost to much.
I think circ is right. Wait a year.

On a side note, its great for the American economy...

_________________
Maul, the Bashing Shamie

"If you want to change the world, be that change."
--Gandhi

Image


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Dec 09, 2014 4:18 pm 
Offline
Member
User avatar

Joined: Sat Sep 06, 2008 7:18 pm
Posts: 937
Location: Minnesota
Wait till $40-45 a barrel. The prices wars will continue and Russia is struggling with the prices of Oil dropping. I am still looking for deepwater drillers and other oil gas related candidates. Companies are still hiring. My current shares on taking a dive but I will pick some up when it slumps.

_________________
WoW level 80 Mage cricec, 80 Paladin Rainbowkitte (retired)
Eve-Online 9+ years crice, Double G, Galahade (retired)
AION crice level 43 cleric (retired)
Star Trek Cr'ice level 41 Klingon engineer (retired)
Global Agenda cricec level 30 Assault (retired)
Rift Zeranna level 50 AssBard (retired)
Star Wars The Old Republic Crice level 50 sorcerer (retired)
Guild Wars 2 Cricec 80 Elementalist (retired)
Naval Action crice (retired)


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Dec 22, 2014 5:50 pm 
Offline
Member

Joined: Fri Mar 18, 2011 3:49 pm
Posts: 8145
I bought gas for 1.98 the other day. I can't imagine it getting much lower. Shale is getting some negative publicity for possibly causing earthquakes and hurting the environment. Whether that is true or not I don't know, but it could drive the price of oil up some, or at least stop the fall.

_________________
I don't own kid gloves.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Fri Dec 26, 2014 12:19 am 
Offline
Member

Joined: Fri Mar 18, 2011 3:49 pm
Posts: 8145
So, I was over my parents talking to my dad and I asked him how his stock was doing because I know he's heavily invested in Exxon(retired after working there ~40 years), and he said it was doing okay, down a little(not sure what time frame he was using), but not too bad. I mentioned to him that I figured Exxon stock would be down a lot since the price of oil is so low and he brought to my attention something I never really thought about or was even aware of.

Exxon obviously buy oil... but they don't buy it at current market prices. They sign like a 30 year agreement with oil harvesters and pay that rate over the agreement. Since they do that, the oil price going up or down, doesn't really have much of an impact on their stock. So Oil may be $100 a barrel, but Exxon may only be paying $30 for it(no idea actual cost).

He also said that Exxon, buys the shit oil, so that price they advertise being the price of oil a barrel, isn't what Exxon uses. They use the trash oil and make gas out of it, and all of the trash it takes out of the oil, uses that for other stuff. Pretty interesting. He also mentioned that the good stuff(that is mentioned when they give the price of oil), Exxon isn't really set up to process.

_________________
I don't own kid gloves.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Fri Dec 26, 2014 11:29 am 
Offline
Member

Joined: Mon Mar 21, 2005 8:22 pm
Posts: 11551
Location: Brooklyn, New York
Strife wrote:
Exxon obviously buy oil... but they don't buy it at current market prices. They sign like a 30 year agreement with oil harvesters and pay that rate over the agreement. Since they do that, the oil price going up or down, doesn't really have much of an impact on their stock. So Oil may be $100 a barrel, but Exxon may only be paying $30 for it(no idea actual cost).


Pretty much every commodity has a futures market - you can get hosed on it too if things significantly trend down, but the hope is you negotiated a rate that will work in your favor over time. A long term slump in oil prices could fuck a lot of their futures though depending on when thye were purchased.

Shipping contracts being done like this helped exacerbate the recession in our industry (and by proxy everyone else) as a bunch of people agreed to vessel rental rates years in advance and ended up getting massively hosed once a glut of new vessels came onto the market.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 05, 2015 1:22 pm 
Offline
Officer

Joined: Fri May 08, 2009 7:31 pm
Posts: 2166
Driving down to the coast between Christmas and New Year I saw gas as low as 1.90 and someone at church last night said that while they were off somewhere on vacation, I don't recall where, that they saw it for 1.75.

_________________
Zirak / Thanoslug in lots of MMOs
Image
"Consensus: The process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved, merely because you cannot get agreement on the way ahead." -Margaret Thatcher


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 05, 2015 2:17 pm 
Offline
Member

Joined: Mon Mar 21, 2005 8:22 pm
Posts: 11551
Location: Brooklyn, New York
I still remember 89 cents a gallon in high school.. Nothing like filling up a civic for under $10...

/getting old


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 05, 2015 5:04 pm 
Offline
Officer
User avatar

Joined: Mon Nov 22, 2004 3:04 am
Posts: 8175
Location: Buffalo NY
I own oil stock and I haven't seen it go up or go down in 3 years. No splits and nothing else worth mentioning.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 05, 2015 9:53 pm 
Offline
Member
User avatar

Joined: Mon Apr 11, 2011 6:22 pm
Posts: 3869
Jakensama wrote:
I still remember 89 cents a gallon in high school.. Nothing like filling up a civic for under $10...

/getting old


I remember that too. Crazytown. But what's even crazier is we aren't that old.

_________________
TinStar
96 99 44 4 33


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 06, 2015 5:12 pm 
Offline
Member

Joined: Wed Jan 19, 2005 9:44 am
Posts: 238
Location: Washington, DC
I remember $.59 a gallon for the cheap gas when i was in high school, that was amazing... I use to have money to drive to amusement parks and skiing and gas prices were of no concern

_________________
Mistahapie - 50 Warlord or Champion <Defiant> - Faemist
Master Armorsmith / Weaponsmith
Airyth - 50 Pyromancer or Chloromancer <Defiant> - Faemist

Mistahapie - 70 <Defiant> Troll War Mannoroth
Airyth - <Defiant> 70 Troll Mage Mannoroth
Iriani <Innoruuk's Legion> 52 DE Enc - Ebay
Mistahapie Bedwetter <Defiant> 70 TR War - VZ
Airyth <Defiant> 70 DE Enc - VZ
Crinekx <Defiant> 70 Frg Wiz - VZ


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Sun Jan 11, 2015 11:06 pm 
Offline
Member

Joined: Sat Aug 09, 2008 3:38 pm
Posts: 2055
I have been a series 7 broker for over 25 years. Never fucked with oil, never had to. It is starting to become a topic.

The first problem with buying into "Oil" is exactly what Strife was saying, oil dropped by over 50% but Exxon didn't. So if you expect oil to increase by x%, you can't really expect Exxon to increase by the same percentage.

That is the same problem with all of the "Energy" mutual funds. They own the stock in the companies that didn't fall 50% and won't go up 50%.

But the average person can't just buy oil and store it in great big tanks and sell it at a later date when the prices are higher. It really isn't like gold where you can put it under the bed or where ever.

So what you are left with is really the futures market or some derivative of that. The easiest thing that allows the individual investor to speculate in the futures market with at least some kind of management or stated investment strategy is an ETF Exchange Traded Fund. And an ETF is such a wide open term I can't even quantify it. They are pretty well allowed to do anything.

I won't even try to explain "Contango" but it is something that you have to consider if you are looking at rolling the futures market. http://www.investopedia.com/terms/c/contango.asp

There is another interesting thing about ETFs, they can be leveraged. http://www.investopedia.com/terms/l/leveraged-etf.asp So when the the underlying asset goes up they go up greater, and when it goes down they go down greater.

At some point, I have some clients that want to buy into oil. Where is the bottom? Hell if I know.

But I am a value oriented broker. I love shit that is beaten down but not going out. I don't expect oil to go out. The history says every time oil has dropped 50%, in the next couple years you make a rather large profit.

The EFT that I am looking at for future investments is ProShares Ultra Bloomberg Crude Oil (UCO). it is leveraged 2x. over the last year the high was $40.17 and the low was $7.97. it finished Friday at $8.36. The reason is because I don't really know if oil is actually headed back over 100. It might settle well below that and if it does I still want to maximize profit.

In my mind at the end of the day it isn't an investment, it is a bet. Might be a good bet, but a bet none the less. Do your own research and ask for professional advice.

_________________
WAR! Bonestomper - SwordMaster
Witness my Awesomeness


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 12, 2015 2:33 pm 
Offline
Member
User avatar

Joined: Sat May 10, 2003 6:48 pm
Posts: 9266
Hot off the press, oil sank again today.
http://mobile.reuters.com/article/idUSK ... 2?irpc=932
The below comments are interesting, and core to the subject. Bottom line is the world is producing way more oil then it needs., and no one seems to be turnng down the spiket. What they are hoping for, is everyone starts buying / using more because its so cheap.... But the reduction of usage has alot to do with effcient standards and green energy.

Quote:
figured we’d see $40 in the near term, but everything seems to be happening quicker than expected,” Zahir said..”........


......"There's a million barrels a day of excess production," he said. "That is what is driving the price."

_________________
Maul, the Bashing Shamie

"If you want to change the world, be that change."
--Gandhi

Image


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 12, 2015 3:26 pm 
Offline
Officer

Joined: Fri May 08, 2009 7:31 pm
Posts: 2166
The reduction of usage also had a lot to do with price. For example, my family has done a lot less driving over the last 6 years simply because gas was so expensive. With gas prices falling we are starting to be a bit more free again with hopping in the car to go somewhere. I doubt seriously that we are the only ones.

_________________
Zirak / Thanoslug in lots of MMOs
Image
"Consensus: The process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved, merely because you cannot get agreement on the way ahead." -Margaret Thatcher


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 12, 2015 3:34 pm 
Offline
Member
User avatar

Joined: Sat May 10, 2003 6:48 pm
Posts: 9266
Zirak wrote:
The reduction of usage also had a lot to do with price. For example, my family has done a lot less driving over the last 6 years simply because gas was so expensive. With gas prices falling we are starting to be a bit more free again with hopping in the car to go somewhere. I doubt seriously that we are the only ones.


You are the example of who they are hoping to buy more. I agree with you, there are alot more out there. however alot of people have also bought smaller cars, hybrids, electric, etc, as a result of the high prices. I think we will see a bump in usage, but my gut says it will be less than previous levels because of more effcient cars and such.

The big question is what is the bottom.... Bone has the right answer.

bonestomper wrote:
At some point, I have some clients that want to buy into oil. Where is the bottom? Hell if I know.

_________________
Maul, the Bashing Shamie

"If you want to change the world, be that change."
--Gandhi

Image


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 12, 2015 3:47 pm 
Offline
Officer

Joined: Tue Dec 21, 2004 4:34 pm
Posts: 5791
I don't think we are at the bottom, but I do think we are already at a place where if you buy and hold long term, you will make a profit. Oil isn't a company that doesn't have a growth horizon, eventually it has to come back up.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Mon Jan 12, 2015 4:40 pm 
Offline
Member
User avatar

Joined: Sat May 10, 2003 6:48 pm
Posts: 9266
Yes I agree. It will rise either by consumption or by lowering production. Unless of course we enter some great recession again.

A couple of interesting things to look out for though. Keystone pipeline will increase production. Also at some point Russia is going to pull its head out of its ass, and play nice with the world. At which point you will see a production increase and anotyher drop in price. Russia is hurtng right now, and most of thier economy is based on oil. The sanctions are have a huge impact. Once lifted they will flood the network with oil. count on it..

_________________
Maul, the Bashing Shamie

"If you want to change the world, be that change."
--Gandhi

Image


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 13, 2015 1:17 am 
Offline
Member

Joined: Sat Aug 09, 2008 3:38 pm
Posts: 2055
Breand wrote:
I don't think we are at the bottom, but I do think we are already at a place where if you buy and hold long term, you will make a profit. Oil isn't a company that doesn't have a growth horizon, eventually it has to come back up.


OK, great idea. What vehicle do you recommend for that?

_________________
WAR! Bonestomper - SwordMaster
Witness my Awesomeness


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 13, 2015 10:00 am 
Offline
Officer

Joined: Tue Dec 21, 2004 4:34 pm
Posts: 5791
bonestomper wrote:
Breand wrote:
I don't think we are at the bottom, but I do think we are already at a place where if you buy and hold long term, you will make a profit. Oil isn't a company that doesn't have a growth horizon, eventually it has to come back up.


OK, great idea. What vehicle do you recommend for that?


Depends on the risk you want to assume, of course. The one you mentioned is fine, or you could go even riskier and do ERX which is a triple leveraged ETF. But I would certainly stick with ETFs and not the oil companies. If I were a real betting man I'd gobble up some LEAPs (2 year term options) on an oil ETF and you'll have 2 years to sit on it and sell when you want.

I have also really liked PGH(Canadian Oil trust) for years because they give out a monthly dividend. It basically covered Netflix and Amazon Prime for the past 6 years, heh. It is very low right now, and the dividend is down to 4 cents a share (monthly) so a risk, but could be a good pickup.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 13, 2015 12:51 pm 
Offline
Hail to the King
User avatar

Joined: Thu May 30, 2002 10:35 am
Posts: 16892
Location: Cimmeria
My experience with leveraged silver ETFs suggests:
1) They are very risky. They seem to pretty consistently follow commodity prices DOWN but not necessarily UP. Reading suggests that they reflect price changes that occur during regular trading hours but not changes that occur outside of hours. e.g., if silver closes at 30 and opens at 35, this change won't be reflected in the leveraged ETF.

2) They lose value if you hold them long term, probably for the above reason. You should really be day trading them and trying to anticipate the daily moves, i.e., you are a wizard or a time traveler.

The NON-leveraged silver ETF seems to much more closely match the price of silver (ditto for gold). It's the leveraged one that's fubar.

I dunno if oil is the same though.

_________________
If it bleeds, we can kill it.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 13, 2015 12:53 pm 
Offline
Member

Joined: Mon Mar 21, 2005 8:22 pm
Posts: 11551
Location: Brooklyn, New York
Vanraw wrote:
You are the example of who they are hoping to buy more. I agree with you, there are alot more out there. however alot of people have also bought smaller cars, hybrids, electric, etc, as a result of the high prices. I think we will see a bump in usage, but my gut says it will be less than previous levels because of more effcient cars and such.


There has also been more of a trend to pull our heads out of the assess and start living closer to things rather than do the ridiculous commutes we are used to too. Not sure if it is widespread enough to counteract driving culture though.

One would hope we learned a lesson from high gas prices, but we didn't do it in the 70s so I can't imagine we wont see a bump again. But with mitigating factors and increasing production all around, the effect might be muted from an investment standpoint.

Additionally, while oil WILL go up eventually barring some mystical unicorn fart energy source just appearing tomorrow - investing on that alone might not be the best choice. While your money is sitting there waiting for oil to go back up significantly in 2, 3, 5 or 10 years, it could have been working for you and paying off better returns elsewhere.

If I did it I'd probably do an ERX and roll the dice, gamblings not fun without a higher risk/reward ratio.


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 13, 2015 2:14 pm 
Offline
Member
User avatar

Joined: Tue Jul 15, 2003 5:10 pm
Posts: 3677
Location: Adamstown, MD
bonestomper wrote:
Breand wrote:
I don't think we are at the bottom, but I do think we are already at a place where if you buy and hold long term, you will make a profit. Oil isn't a company that doesn't have a growth horizon, eventually it has to come back up.


OK, great idea. What vehicle do you recommend for that?

I don't have any free cash right now (sticking it out in AAPL to see how earnings go), but if I did I'd go with the producers, like EOG or CLR, rather than USO. Or something like CVX, which has a nice yield. They will likely outperform when it starts going up again.

But oil might stay in the 40s (or lower) for the rest of this year...

_________________
Ex SWG, L2, CoH, Wow, and War
Currently PvPing in the stock market


Top
 Profile  
 
 Post subject: Re: Buy Oil?
PostPosted: Tue Jan 13, 2015 4:27 pm 
Offline
Member

Joined: Mon Mar 21, 2005 8:22 pm
Posts: 11551
Location: Brooklyn, New York
You should probably dump apple before the watch flops this year..


Top
 Profile  
 
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 34 posts ]  Go to page 1, 2  Next

All times are UTC - 5 hours [ DST ]


Who is online

Users browsing this forum: No registered users and 1 guest


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB® Forum Software © phpBB Group