yank

Surprising Upturn for the Energy Sector

The USD broke a key support level last week, closing below $83.45 It is headed below $80 which will onlu fuel more commodity buying. Hoping for a USD rebound is an exercise in futility.


On May 09 03:32 AM Alan von Altendorf wrote:

> I expect oil and natgas to move lower again. The pop was spillover
> from the financials. This whole market is starting to feel like a
> dollar devaluation hedge, which pushes up nominal USD prices.

Is There Enough Natural Gas?

Please provide solid proof that the Bush Admin was "anti-science". And leave out all the global warming garbage which thousands of reputable scientists still dispute. The Obama Admin is a complete disastewr whethe rits econ policy, scientific, or otherwise. We may not survive as a country until 2012. The Great "O" is a charlatan. A fraud, plain and simple. If you can't see that you are a moron.


On Apr 27 10:33 AM charliezap wrote:

> Comments from the top of my head, which could be disproved by research
> or facts.
>
> 1. I don't think that Big Oil is much interested in looking for oil
> onshore the lower 48 any more. Their main interest within the US
> is potential fields offshore or in Alaska. Virtually all of the smaller
> E & P companies are already focused on gas.
>
> 2. There's lots of gas out there. The issue is cost. You have to
> go deeper, into deeper water, or use new technology fracturing to
> get it out of the shale formations.
>
> 3. Let the market decide, yes, but we do need tax incentives and/or
> disincentives to steer usage away from energy sources that pollute,
> contribute to global warming, or lack security of supply. A carbon
> tax (or cap and trade) would solve a lot of problems. A) It would
> encourage conservation in the use of transportation fuels, B) it
> would push more power plants toward natural gas, C) it would reduce
> carbon dioxide emissions, D) it would push demand toward domestic
> natural gas and other domestic sources (including wind and solar),
> and would reduce reliance on imported oil, including from countries
> such as Venezuela, Nigeria, and Saudi Arabia, E) it would improve
> the US trade balance, and, F) it would reduce the US federal budget
> deficit.
>
> 4. SemiFinal Comments: I don't think it is feasible to switch over
> to natural gas in the time frame proposed. It would take enormous
> amounts of capital for drilling and infra-structure. And there are
> so-called "environmentalists" who oppose everything that does not
> conform to their "ideal". Environmental opposition will slow down
> any solution.
>
> Final Comment: I don't see any point if firing Chu. I think the Obama
> administration has as good a grasp of the situation as any administration
> could. In fact, they will push science as part of the solution, in
> contrast to the prior administration, who were anti-science.

Your Oil Stocks Aren't Coming Back

The tech sector is touted by just about everyone as the "fair haired" investment theme. It's the same old story we were told right up to 2000 when the tech bubble burst. As for who cares about oil "demand destruction"? What cave do you live in? That is the "mantra" used every day by the shills at CNBC who have hated the energy/commodity trade forever. Your argument that previous sector winners can NEVER repeat their previous performance is the same tired Wall St. thinking that has generated a negative return in the S&P since 1999. Get over it.


On Feb 20 01:45 PM The Reformed Broker wrote:

> Yank,
> where did anyone on this post or thread recommend "buying tech stocks"
>
>
> are you kidding me?
>
> I dont tell anyone here to buy anything...is english your second
> or third language?
>
> and who is talking demand destruction? who even cares about that?
>
>
> i think you've misread the discussion or you're on the wrong page
> of SA

Your Oil Stocks Aren't Coming Back

I think it's a bit premature to say the energy sector trade is "done". Will we be walking to work tomorrow instead of driving? Maybe we will copy the Chinese and bicycle to work? That should work out well here in Miami with 50 inches of rain per year and 1/2 the year with a +90% heat index. The real issue here is manipulation. Do you think that the same Govt that regularly delivers contrived and inaccurate inflation (CPI/PPI) data would miraculously deliver accurate oil inventory data? If you do I have a bridge to selll you. As for the daily almost nauseating claim trumpeting "demand destruction" I did not see much of that in a late summer drive from Miami to New York and back (with gas at/near $3 gallon). In fact as I drove through several metro areas including Orlando, Atlanta, Charlotte, Wash, DC, and Philadelphia I saw nothing but "bumper to bumper" auto traffic. But keep telling me about "demand destruction". It sounds good anyway. As other posters have repeatedly said we are many years away from any viable replacement for oil as a transportation fuel. But the most important reason that the energy bull is NOT over is the continual generation of cash flow that companies you sneered at (like RIG and XTO) still manage to deliver. If the oil bull is over why would a company like Petrobras continue to spend billions on deep sea oil exploration? Keep buying Tech stocks thought. That should work well until the NASDAQ goes below 1,000 this year.


On Feb 20 10:08 AM The Reformed Broker wrote:

> ok
> so msft csco and intc had massive losses? show them to me.
>
> and btw, what happens to commodity prices over prolonged periods
> of time of overinvestment and overcapacity?
>
> I guess you and your portfolio are about to find out.
>
> not an oil bear, Ive just learned that when a sector/ trend is done,
> move on

Your Oil Stocks Aren't Coming Back

Couple of observations:
1. Oil producers can cut supply at a faster rate then demand can be "destroyed". Ergo, at some point prices will rebound.
2. Much if not all of this collapse has to do with a perverted, illogical rise in the USD. The USD bull is unsustainable. Unfortunately Mr. Cheney, "deficits do matter" when it comes to currency strength. USD strength is about to collapse in a major way.
3. CHK should have NEVER been bought at $70 as it violated the cardinal rule of value investing. Always buy a stock with a margin of safety (Ben Graham's 50% discount to full value rule). I can assure you that CHK is NOT fully valued at $105. More like the $70 price this buyer paid.

What’s the Right Price for Oil?

It's not just Japan that is ahead of the curve with more fuel efficient cars. In Europe and the UK they have been producing Minivans (diesel) that get 35-40 mpg for at least the last 10-15 years. Those are mileage figures we would love to have here in the USA. But instead our automakers here in the USA sat on their hands. And now we as taxpayers have to bail them out? I'm sick of this charade.


On Feb 12 12:50 AM Teutonic Knight wrote:

> To the Daily Reckoning,
>
> I would like to offer a different perspective from the title of your
> article, if I may.
>
> Instead of debating, or even defending the "right" price for oil,
> isn't it time that we, American, wake up to cease our addiction to
> cheap oil?
>
> If indeed we had learned our lessons from the early '70s Arab oil
> embargo crisis, and started to build energy efficient cars like the
> Japanese did, we would have been in much better shape today. We spent
> about something like a little less than $1T each year importing oil.
> Imagine if we had succeeded in conservation, and invested in converting
> to renewable energy, the money saved would have gone a long way in
> paying down our national debt, and in cleaning up the environment.
>
>
> The truth is we don't want to, unless we are forced to, on top of
> other political and economic reasons that the readers only know too
> well, and which I do not want to elucidate here, after listening
> to the Bankers on Capital Hill this morning.
>
> In my view it has to do with our culture too. i could recall in the
> roaring '60s gas was so cheap selling for 33 cents a gallon. The
> Japanese being a island country with almost no oil reserve and production
> at the time, everyone knew from childhood the high cost of gasoline
> and the need to conserve. As a result they have been way ahead in
> building more energy efficient cars.
>

Commodities: Bubble or Not?

Crossing:
Nicely said. I guess what I would say to those trashing the commodity sector is to listen to Louise Yamada's comments about it. Louise is a technical stock strategist (30 years with Smith Barney) who interprets future sector price action based on past trends. Interestingly, one of her main points is that the longer a sector remains in a downtrend (for commodities see 1980-2000) the LONGER the recovery period when it bounces back. So typically since commodities were down for approximatley 20 years, we will most definitely see at least a 15-20 year bull cycle for this sector. This pretty much confirms what Jim Rogers has been saying all along. The longer the Wall St. community remains in "denial" about commodities as a viable asset class, the longer this uptrend will last. Bunch of whining crybabies. And by the way, Louise remains strongly NEGATIVE about the Financials and Technology sector for the exact opposite of what she said about commodities. Namely, since Financials have boomed for a relatively long period (1982-2000), they will remain in a confirmed downtrend for at least the next 5 years. Sorry CNBC, Cramer, and the other "shills" who can't stop talking about Financials. They are done. Stick a fork in them. Toast.

Yank

Burst Bubble? Commodities' Long-Term Story Remains Intact

Davy:
Right on with your analysis. I have to just laugh when I hear that everyone expected a full point cut and when he "only" cut by 3/4 of a point that was the all clear sign that the USD was on the way back up and commodities were dead. Gee, I must have missed that kind of torturous logic in Deductive Reasoning 101 in high school. Listen up you brain surgeons. Ben cut by 3/4 so he could keep some ammunition for further cuts in April and June. Wow, these people are dense, Davy. They just don't get it. It is NOT the time to pile back into Financials, Retail, or Tech. They are all dead money people. The commodity bull is far, far from over. The uptrend in commodities is clearly intact (Louise Yamada said as much this week). And as for the bold pronouncement that oil demand is dead. Please spare me the idiocy. A decline of 0.1% in one week (yoy) is NOT a meaningful trend people. Did anyone also consider that in February we had some of the worst winter weather in over 25 years and that maybe people don't drive as much when they are shoveling snow out of their driveways? I just marvel at all this stupidity. Commodities will recover this week. You can count on it.