Leonard the Monkey

Four Oil Giants to Keep an Eye on - Barron's

XOM is at least 20% overvalued and trades at a significant premium to it's peers.

That is taking into consideration their top notch balance sheet.

Estimates are for a 40% decrease in earnings this year to 5.51

Given a 10 pe and $6 in cash = $61

They will also have billions in write downs on projects such as the oil sands, the Chavez seizure and other investments in projects that are no longer feasible.

Oil Will Peak at $150-200 - Barron's Interview

Oil is starting to remind me of the housing bubble. It will eventually boil down to how much does it cost to get the oil to the market. With the newer harder to get supply the price will go up, all the way to about $60 per barrel. If the world would just drill more and invest more in the necessary infrastructure there is no reason oil can't move at least 20% down from here.

The world needs to permanently change it's habits of wasting huge amounts of oil to a more conservative stance lowering world demand, aided by alternative fuel sources to a level where supply and demand meet. Currently we are in balance but the perception that we won't be in a couple years is the driving force behind this oil rally. Eventually I fully believe we will be in balance but the million dollar question is will it happen soon enough to avoid a supply demand imbalance that sends oil to $200+.

I can't believe were still not drilling more on land and offshore, alternatives need more time to catch up and it will take a couple of years before we see a drop of oil from many of the best prospects we have. Why are we waiting? Maybe we want to force everyone into an electric car in 2010 first.