ConocoPhillips' (COP) sale of its 40% stake in Russian JV NaryanMarNefteGaz to Lukoil makes...

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Stone Fox Capital Comments (4579)
 
um, the oil price isn't even close to mediocre so why do that?
23 Aug 2012, 06:38 PM Reply Like

ElCabong Comments (24)
 
Yeah, somebody needs to define mediocre. It's 95 dollars and some change today.
24 Aug 2012, 10:29 AM Reply Like

David A Booth Comments (75)
 
WTI is $96/barrel while Brent is $115. The analyst is concerned that COP hasn't demonstrated how it will do well with oil at $80/barrel. Assuming that he means the Brent price of $80/barrel, this is what he is saying: COP shares won't do well in an environment where oil prices drop $35 per barrel. O.k., we all get that. But do we really need a professional analyst to tell us this?

Here are two other things that we know:

1. COP has a management that is committed to creating and unlocking shareholder value. We see this in their willingness to split off PSX into a separate company.

2. Current oil prices reflect one of the worst economic backdrops of the last 50 years. If we look out 3, 4, or 5 years it is difficult to not see global growth being much better than it is today. Yes, China is currently slowing and Europe is a basket case - but that is today's story. When the global economy moves out of its current funk what do you think will happen to oil prices?

3. The U.S. has created dollars like they were going out of style. Once velocity returns to the money supply we should expect this to produce meaningful commodity inflation (the alternative of the FED stepping heavy on the economy's breaks seems exceedingly unlikely to me). If I am correct about this, oil prices will not simply rise with increased economic demand they will rise faster than the increased economic demand.

Best wishes,

David
long COP, PSX
23 Aug 2012, 08:31 PM Reply Like

jeavant Comments (21)
 
COP WILL DO JUST FINE - THEY HAVE ALREADY CREATED VERY GOOD STOCK HOLDER WEALTH BY SPINNING OFF PSX -
23 Aug 2012, 08:45 PM Reply Like

Michael Fitzsimmons Comments (4377)
 
a "mediocre" oil price? seriously?
23 Aug 2012, 09:55 PM Reply Like

The Autonomous Guy #23 Comments (213)
 
David : I concur with everything you have stated.

I too am long COP and PSX. Heard that Mr.Buffet picked up a few

million shares of PSX just the other day.
23 Aug 2012, 10:25 PM Reply Like