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Old Trader is a 63 year old private investor, managing a retirement portfolio constructed to a) generate a high current yield, b) preserve capital, and c) increase capital. His methodology involves taking a "top down" macro view to identify favorable trends, and then engage in... More
  • Too quick to pull the trigger? 2 comments
    Jun 28, 2009 7:44 PM

    I've been (and will be, for the forseeable future) a bull on energy, specifically oil. I know that as time goes on, alternative forms of energy will make inroads in oil use, but there are areas outside of transportation that call for the use of oil (think plastics, by way of an example).

    Still, I was of the opinion that oil had gotten a bit ahead of itself, at least from a fundamental standpoint of supply/demand, and thought a pull back to $60/bbl, or even a bit less wasn't such a long stretch. Acting upon that train of thought, I completely exited on Canroy a week ago on Thursday, and this last Thursday, dramatically lowered my position in a second one.

    In the case of the first company (PWE), over time, I felt prospects for the company going forward had diminished and the funds there might well be better utilized in another foreign energy/oil company. In the case of the second (PVX), it was more of a tactical decision, thinking I would reacquire the shares I sold at a somewhat better price. I didn't go so far as liquidate the position entirely.

    Now, given the resurgence of civil unrest in Iran, I'm wondering if I didn't outsmart myself with my decision vis a vis PVX. Granted, politcal events will ALWAYS be a wild card in the energy sector, as are weather-related disruptions in supply. The bright side to "theory" on the short term price of oil, is that there has been a resumption in production in Nigeria. Of course, that situation has been an "on again, off again" one for the last couple of years.

    Needless to say, I'm awaiting the start of the overnight commodity markets somewhat anxiously.

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  • optionsgirl
    , contributor
    Comments (5027) | Send Message
     
    I do not think you outsmarted yourself. The tar sands plays aren't solid, at $70+- per barrel. We would need to see a sustained move up from here for them to perform well going forward. ( And of course, for those canroys with lots of natty exposure, the question becomes when will natty rise?)
    Yes, we don't know what news from Iran, Nigeria or even Iraq ( now that they are looking at the withdrawal of US troops) will do, but, unless something catastrophic happens now, the fundamentals for crude at these levels don't seem justified, short term.
    29 Jun 2009, 03:57 PM Reply Like
  • Old Trader
    , contributor
    Comments (5724) | Send Message
     
    Author’s reply » Thanks for the "moral support", *s*. Actually, PVX's production is evenly split between oil and NG, and they have a midstream production segment in NGL, which is in a sweet spot right now, with input costs (NG) at low prices and output prices (oil equivalents) at relatively high prices).

     

    On Jun 29 03:57 PM optionsgirl wrote:

     

    > I do not think you outsmarted yourself. The tar sands plays aren't
    > solid, at $70+- per barrel. We would need to see a sustained move
    > up from here for them to perform well going forward. ( And of course,
    > for those canroys with lots of natty exposure, the question becomes
    > when will natty rise?)
    > Yes, we don't know what news from Iran, Nigeria or even Iraq ( now
    > that they are looking at the withdrawal of US troops) will do, but,
    > unless something catastrophic happens now, the fundamentals for crude
    > at these levels don't seem justified, short term.
    29 Jun 2009, 06:17 PM Reply Like
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