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  • The Price of Oil: Weak Demand Trumps Distractions [View article]
    I just want to know how everyone value oil. Its not like you are discounting cash flows for a company.

    One might look at the production cost to replace the commodity.....or one might look at the physical labor output a gallon of oil may hold.

    By the measure of oil replacement.....I would say the fair value of oil might be $100/barrel as most of the "expensive" oil becomes profitable at $80/barrel....but most oil companies will wait for some margin of safety before kicking those back into gear.

    As for terms of the fair value of energy content in relation to manpower. Well....the price could be tens or hundreds of thousands of dollars when you multiply 10/hr * manhours of work.


    I would say at $30-40/barrel is pretty underpriced.....and its a good time to be buying.
    Jan 13 08:57 am |Rating: +4 0
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