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Raymond James downgrades a litany of big energy stocks, believing crude oil prices will average...

Raymond James downgrades a litany of big energy stocks, believing crude oil prices will average $65/bbl in 2013 as “oil fundamentals have only gotten worse." E&P names reduced: APA, APC, BPZ, CLR, CXO, DNR, EXXI, PXD, QEP, REN, WLL, GDP, KOG, OXY, PQ, SFY, OAS, SM, NOG, BRY, COP, FST, ROSE.
Comments (26)
  • TruffelPig
    , contributor
    Comments (4059) | Send Message
     
    Oh, cool. $65/barrel on average. Hahaha. They will look silly. Very silly.
    18 Jun 2012, 04:00 PM Reply Like
  • IgnisFatuus
    , contributor
    Comments (2115) | Send Message
     
    I agree with you TruffelPig.
    18 Jun 2012, 04:01 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
     
    $65 is only another $17 down from where we are now for WTI, or about 20%. Its an bold prediction, but rising production in the US and Iraq, a slowdown in Europe, and a slowdown in China filling their strategic reserves could see WTI get down that low. Probably not average that low, but we might see a sub $70 day or two in the next 18 months.

     

    Calls like these are easy for analysts to make. If hes wrong, which he likely is, no one will call him out on it in Jan 2014. If hes right, CNBC will label him a genius, he'll get a book deal, and start a hedge fund. Its a gamble with no real downside and huge upside.
    18 Jun 2012, 04:22 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    If world economies continue to weaken, it is entirely possible that oil gets to $65/barrel. But if so, it likely won't stay there for very long.
    20 Jun 2012, 06:47 PM Reply Like
  • captiankirkoptions
    , contributor
    Comments (192) | Send Message
     
    Bad call on their part, someone ought to bring it up in a year.
    18 Jun 2012, 04:05 PM Reply Like
  • tibialexpert
    , contributor
    Comments (45) | Send Message
     
    at 72 dollars the producers just about break even. Does he think the producers are idiots??
    18 Jun 2012, 04:07 PM Reply Like
  • DickF
    , contributor
    Comment (1) | Send Message
     
    44 senators from both U.S. political parties just wrote Obama a letter in which they urged him to put the military option front and center if no progress is made next week at the nuclear talks with Iran in Moscow.

     

    The first two negotiating rounds went nowhere and, if anything, the atmospherics for the next round of talks are getting worse, not better. (See recent statements by various high ranking Iranian officials from Khamenei on down.)

     

    $65/bbl oil prices in 2013? Don't bet on it.
    18 Jun 2012, 04:12 PM Reply Like
  • Stockmaven
    , contributor
    Comments (76) | Send Message
     
    I believe in the tooth fairy too. More likely to be $120
    18 Jun 2012, 04:32 PM Reply Like
  • shj
    , contributor
    Comments (15) | Send Message
     
    Like all good doctors say... it's important to consistently take your meds... and any good analyst should be aware of this... just take a look at the (so-called) leaders of several of the countries sitting on vast oil reserves for a good example of what can happen to a person when they stray from their regular medications... I'm terrified just guessing where it may be tomorrow... much less 12 months from now...
    18 Jun 2012, 05:18 PM Reply Like
  • Pinocchio1
    , contributor
    Comments (206) | Send Message
     
    Time that these analysts put their OWN money where their mouth is
    18 Jun 2012, 05:21 PM Reply Like
  • Vasiliy
    , contributor
    Comments (44) | Send Message
     
    30% world oil goes from OPEC which is stick to 80-100 $$ range, 10% from russia where everything belongs to Putin\Sechin\kgb.
    i want to see 70$ try. only if Spain will be bankrupt and German exits euro.
    18 Jun 2012, 06:10 PM Reply Like
  • ChuckXX
    , contributor
    Comments (1018) | Send Message
     
    Raymond James is a pretty well respected firm and does alot of work in the oil patch. I wouldn't be too critical of their call if I were you. Remember that there are 17 countrys in the EU all hanging on by their bootstraps.
    18 Jun 2012, 06:18 PM Reply Like
  • worldbank
    , contributor
    Comments (118) | Send Message
     
    Let's do some math. HE said: "WILL AVERAGE $65". If we assume we enter 2013 @$75 per bbl, then we will need to see something in the $50's per bbl. to average $65!!! This seems rather doubtful unless we have GREAT DEPRESSION #2. Does anyone REALLY think oil will drop an additional 30% from it's current level of $82. If it does, we probably get to say goodbye to IRAN, IRAQ,VENEZUELA & probably MEXICO.
    18 Jun 2012, 06:19 PM Reply Like
  • Harry Johnson
    , contributor
    Comments (480) | Send Message
     
    Agree with Mike; people forget an off the chart prediction that doesn't hit the mark by the second week after it was supposed to happen, but if it by chance hits, the soothsayer is enshrined forever.

     

    For those of you who eschew history, a halving of world oil price in a matter of weeks is not unprecedented (I know, I know - this time it is different). And so far, tibialexpert, history has shown that the mental condition of oil producers has had very little influence on crude prices.
    18 Jun 2012, 06:52 PM Reply Like
  • Ernest P Icahn
    , contributor
    Comments (377) | Send Message
     
    World economy just too bad. US Shale Oil production just too good. It's one of those conundrums that just shouldn't happen, but as they say, timing is everything. Almost every other commodity's hit the pits, everyone takes their turn, what's so special about oil?
    18 Jun 2012, 09:17 PM Reply Like
  • txbeekeeper
    , contributor
    Comments (293) | Send Message
     
    well if it does go there I'm buying as long dated call options as possible on every company they listed.
    18 Jun 2012, 09:43 PM Reply Like
  • MexCom
    , contributor
    Comments (3050) | Send Message
     
    The lower it goes the higher the next upswing. Oil is one of the most inelastic commodities.

     

    As long as a well is producing, the amount of production will not change until it runs dry. The amount pumped is dependent on the cost of pumping and delivering once the hole has been punched into the ground. Oil can go down to $30 and the amount produced won't dramatically decline but the exploration for new oil will stop completely. With the production steady and with no new production coming on line, any future upswing in demand could make prices increase well above $100 perhaps even over $200 in the short run until additional supply comes on line.

     

    At $300, they will be squeezing oil out of pimples on a sows ass to get it to market! Oil to provide automotive fuel will continue for very long time. The industry is healthy and well capitalized. It should continue to be a lucrative investment for the long term.
    19 Jun 2012, 06:13 AM Reply Like
  • ChuckXX
    , contributor
    Comments (1018) | Send Message
     
    Well here's another thought. Just for arguments sake lets say oil does drop to $65 next year. That means that our beloved oil stocks will drop another 20-25% from here. For those of you that truly have "a pair" that would be the time in your life to " back up the truck" and load up. It might take 2 or 3 years to see them come back to life but I can almost assure you that "in time" you would make a killing. I've seen this movie before several times and yes it does have a happy ending for those of you with time and patience.
    19 Jun 2012, 08:24 AM Reply Like
  • Harry Johnson
    , contributor
    Comments (480) | Send Message
     
    And it is a good thought. In "the old days" the stock price of a well run oil and gas company didn't move in lockstep with the daily price of crude oil futures (possibly because there was no such thing). Now that today's rain falls on the just and the unjust, so to speak, an opportunity does present itself to load up as ChuckXX suggests. The trick, as always, is determining which ones are the good ones.
    19 Jun 2012, 10:54 AM Reply Like
  • badbernanke
    , contributor
    Comments (231) | Send Message
     
    LINN was in the teens in 2009. EVEP was in the low 20's. Other oil patch stocks were in the toilet. Who made money? People buying when the world looked like it was going to end. We're not there yet, but we could be again.
    19 Jun 2012, 03:07 PM Reply Like
  • koolsool
    , contributor
    Comments (291) | Send Message
     
    It is easy to downgrade E&P companies after their share prices have already come down 20% from where they were in April. It seems like a useless call to me. I look at these late brokerage house downgrades as buying signals. It would not surprise me if this brokerage house is in there buying right now too.
    19 Jun 2012, 08:33 AM Reply Like
  • badbernanke
    , contributor
    Comments (231) | Send Message
     
    Wasn't oil in the low $30's in 2009? Markets are irrational and this guess is as good as any other. Any combination of bad economic events relating to the Euro, India, China, US debt, etc. could pull the rug out from under a fragile and paranoid market. Maybe adding some OTM puts is the way to play defense this market.
    19 Jun 2012, 03:05 PM Reply Like
  • gem-exp
    , contributor
    Comments (10) | Send Message
     
    Oil prices will always be volatile and based on the combination of supply, demand and perceived movement by traders who can and do manipulate the markets.
    Opec came out today saying the they have agreed to cut back production to take out the surplus in the market. Easy for them to do. Not a "quota" but an agreement.
    This should hold the market near where it is until the next outside influence moves it but that is likely up baring global financial meltdown.
    GEM-EX
    19 Jun 2012, 05:07 PM Reply Like
  • Harry Johnson
    , contributor
    Comments (480) | Send Message
     
    Saudi Arabia needs production at the current level and $80/barrel to avoid a budget deficit, but that doesn't mean they won't join the rest of the world with a deficit if it means keeping the price of oil as high as possible.
    21 Jun 2012, 11:56 AM Reply Like
  • Duane Byron Carlson
    , contributor
    Comments (129) | Send Message
     
    People with wisdom can see beyond the horizion, me I can hardly see beyond my nose. How far can you see?
    20 Jun 2012, 10:19 PM Reply Like
  • Harry Johnson
    , contributor
    Comments (480) | Send Message
     
    Just far enough to see that people perceived to be wise are (1) not looking at the horizon, but inside information, or (2) running a Ponzi.
    21 Jun 2012, 11:52 AM Reply Like
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