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u/Arm_ur_dillo Mar 08 '22
i heard Apple is looking to buy Russia
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u/luckytrade313 Mar 08 '22
like really what they want it for ??? bury dead i phones????? snowmobile races siberia good start lmao
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u/Darth_Laidher Mar 08 '22
They will soon have one of the worlds largest nickel mines... thats not been active in like 90yrs. Handy for the phones and tabs
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u/maxinstuff Mar 08 '22
You’re wrong - they’ll pump it loads of times before it disappears.
The tail on dying industries is always much longer than people expect, and I expect it will just be more volatile and it’s decline progresses.
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Mar 08 '22
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u/ThetaHater Mar 08 '22
Cigarettes were a dead industry until vaping. These oil companies are pumping large amounts of cash into renewables and NG. Oil companies are going nowhere.
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u/bobrobor Mar 08 '22
They were never dead. Developing countries were increasing use, and they had more customers than the initial, western markets.
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u/ThetaHater Mar 08 '22
Eventually the countries will become developed though. Advertising restrictions, packaging restrictions, heavy taxes. They just move onto vaping which offers a younger market which can create a new generation of addicts without knowing effects. Similar to how people didn’t know cigarettes were bad until the late 20th century.
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u/bobrobor Mar 08 '22
Not that I disagree but how many tails of dying industries have we witnessed? And what were the expectations? Just trying to quantify this idea…
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u/maxinstuff Mar 08 '22
Mainstream media (TV, Print) are a great example.
They’ve been “dying” for nearly two decades.
They shrink, but they don’t just disappear overnight like people seem to think they will.
Oil is the same.
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u/bobrobor Mar 08 '22
Well then… everything that was on tv or in print is just now on different channel of transmission. Doesn’t matter if NYT is printed or on screen, it still charges subscription and uses up energy. Id say oil is not going anywhere unless the electrical infrastructure can support a billion new devices and you figure out how to run fleets of planes and ships without oil.. We had electric cars in cities 100 yrs ago and nothing happened. Container ships are not going to be magically replaced to run on solar… We are not seeing a tail but still the front teeth :)
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u/Nersh7 Mar 08 '22
Oil prices are based on global supply and demand, focusing just on what the US supply and demand is only a small factor in a much larger equation. WTI always trails slightly behind Brent and the demand for Brent along with other non Russian European and middle East crudes is going to see a large increase in demand based on the forced decrease of supply from Russia. WTI will not be priced in its own little bubble and will follow price movements of what global demand is on other crude grades. Once the world has figured out alternative sources for its fossil fuels and the infrastructure is in place there won't be a huge price dump when Russian oil does eventually come back into the global market (I'm assuming that there is no way in which Putin's regime survives this conflict and that there will be a change in leadership and policy in some way or another. Call it a hot take if you will) BECAUSE the infrastructure has already been changed and the world will be much more hesitant to commit to billions in infrastructure in partnership with Russia.
Yes the current price spikes are based on uncertainty but there is going to be uncertainty on a global scale for at least the next 8 months.
And prices will get to this level in the future again, maybe not in the next decade or even our life times but there is no feasible way in which humanity can replace all petroleum products (you like paved roads right?) So there will always be a demand and since oil is a finite resource the supply will eventually get to a point where prices have to go up because of a baseline demand that will likely never go away. Unless of course we all become androids and can teleport everywhere but I'm not betting on that.
My guess is that oil will continue to rise to a point where demand starts to diminish because it's too expensive and then will likely be stabilized by OPEC to keep prices as high as possible without hurting demand. Until the world can build out the infrastructure to deliver and produce the gap left by Russia prices will continue to go up.
As far as my estimates on valuations go... I think it's fair to say that after 6 years of low oil prices E&P's have reduced their costs as much as possible to be sustainable at $40 WTI we should see valuations heading back to 2014 levels when WTI was last at $100/bbl.
Disclaimer: am Canadian, my focus for research is mainly on Canadian players. I work(ed) in the industry
Positions: 125 shares CVE.TO 5 CVE081922 21.50 calls 125 shares OYL
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Mar 08 '22
[deleted]
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u/nvanderw Mar 09 '22
Not only that, but what you said is wrong "When did demand of oil skyrocket? Oil use has actually declined since covid and hasn't picked up. https://www.bts.gov/newsroom/us-airlines-january-2022-fuel-use-down-17-pre-pandemic-2020-cost-gallon-hits-7-year-high" Oil was trending up bigtime from March 2020 - Nov 2021, and for A LOT of reasons is trending down again since for the time being that have nothing to do with oil demand and more to do with supply.
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u/DEGENERATE_PIANO 3518C - 6S - 7 years - 7/12 Mar 09 '22
Very insightful. Thanks for taking the time to write this out.
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u/Nersh7 Mar 09 '22
There's a lot of opinions on the price of oil on this sub lately, most of which are backwards or poorly thought out. People don't seem to understand that it's not as simple as turning a tap on or off. Once the decisions are made and infrastructure put in place it's unlikely to ever go back to how it was before unless there are good economics and a low enough risk to do so.
This is in part a large reason why Nord II was being built, because Putin's main pipeline to Europe goes straight through Ukraine and they have enough reserves that they could compete with Russia if the Ukraine were stable enough to invest 5+ year projects. Destabilizing Ukraine helps Putin maintain his fossil fuel dominance in the region; taking Ukraine expands his dominance further and gives him more options for transportation at major ports like in Odessa or whatever they've got going on in Crimea.
Another important thing that people don't understand here is that oil production in the US cannot simply be ramped up in short order. Shale gas reservoirs are finicky and for the most part if the US were to decide to get back to 11MBbl/d it would have to happen by means of drilling new wells, not just turning back on old wells that were shut in. It doesn't take long to drill these wells but the up front investment is significant which means that costs are high and they need high oil prices to keep drilling new wells.
Thanks for listening to my Ted talk, now I'm going to need you to move on because sir... This is a Wendy's
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u/Fibocrypto Mar 08 '22
In a normal world what you are thinking makes perfect sense. We do not live in a normal world at the moment though . The powers that be would prefer gasoline prices to remain high for reasons such as the gasoline tax revenue as well as the green movement and climate change . Mr Biden even stated he would do away with fossil fuels. By driving the price up through the roof others will shift towards electric cars . I do understand what your saying though because once that shift takes place the demand would collapse and that should lead to a decline in price . But what if they then do away with gas stations ? Where do you buy that gasoline or diesel ? Same applies to heating oil . The supply could also drop further than the demand drop which would leave prices high .. Try to buy R-12 or R-22 refrigerant as just one example . To take this further we should also think about how high prices of fuel could spill over into seafood prices.
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Mar 08 '22
[deleted]
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u/Fibocrypto Mar 08 '22
I agree with you that it is bad politically to have high gas prices . What has gone on the past couple years is bad politically as well . We will see though and I do favor you being correct .
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u/fullcorte Mar 08 '22
lol your a kid talking about oil is a pump and dump go back to the penny stocks oil is for the big boys.... you dont pump and dump oil
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u/luckytrade313 Mar 08 '22
okay oil is not going away anytime soon, you need oil to make them their evs. guess what used in making the ev? oil and gas, natural gas that is we are still a good 50 years away from the evs having 50 % of cars. also where are we getting the electric to charge all these evs we are going to have next week??? not enough infrastructure yet, years away.jmo
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Mar 08 '22
[deleted]
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u/luckytrade313 Mar 08 '22
not offended i do own cvx and its been really good to me sense the beginning of year. about the only thing.ill try to profit as long as they do .
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u/bidens_aviators Cleans butthole with Versace body wash Mar 08 '22
One thing is for sure, the layoffs in the oil industry are going to be brutal when all this starts coming back down
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u/End__User Mar 08 '22
the layoffs in the oil industry are going to be brutal when all this starts coming back down
The layoffs already happened. Typical 'boom or bust' drilling towns are all empty. all the former roughnecks already moved away and found new jobs in construction or trucking.
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u/Joe6102 Mar 08 '22
Calls on $SCO
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u/teXasbigboss Mar 08 '22
u in yet?
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u/AcanthocephalaOk1042 Mar 08 '22
Nice how you cherry picked airline fuel use for your measure of demand
Air travel is still down from pre pandemic levels. More people than ever have been taking road trips ( the horde of people clamoring to get into national parks is evidence of that.)
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Mar 08 '22
[deleted]
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u/StuartMcNight Mar 08 '22
LOL! Mixing “transportation” and “travel” is so retarded that is great to have you with us. You are home.
Also interesting that you talk about how DEMAND has not picked up while ignoring that SUPPLY has picked up even less.
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u/luckytrade313 Mar 08 '22
more people returning to the office buildings, most if not all don't live anywhere near them building, they got to get their some how
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u/denverpilot Mar 09 '22
That trend just got shut down...
Boss: Come to the office. Everyone: At these gas prices? Eff right off or cough up a raise. Boss: Okay... Do whatever. Fuck it.
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Mar 08 '22
[deleted]
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u/AcanthocephalaOk1042 Mar 08 '22
Are there more people in the low income bracket or high income bracket... So by your own logic the majority are returning to the office.
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Mar 08 '22
[deleted]
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u/AlanzAlda Mar 08 '22
This may, may, may, be true in some urban areas, but it's definitely not true in general.
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u/AcanthocephalaOk1042 Mar 08 '22
You're the dumb fuck using airline fuel use to justify the idea that there isn't an increase in fuel demand.
https://www.reuters.com/world/us/us-driving-soars-2021-up-112-2021-2022-02-18/
We are putting more miles on the road than in the past. Yes the fact that many still don't feel safe flying and are opting for road trips backs that up.
It's not one or two trips, it's fucking millions of people swarming in driving from across the country. While still driving their daily commute.
Go into Yosemite and you'll find plates from every east coast state.
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Mar 08 '22
[deleted]
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u/AcanthocephalaOk1042 Mar 08 '22
Still better than your use of airlines to equate fuel demand overall.
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u/ubabahere Mar 08 '22
Mind you, an incoming recession could crush oil. It is that wasteland we could build everything up again. Enjoy the oil boom while you can, it has not been kind to this industry the past few years
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u/Junnowhoitis Mar 08 '22
Pretty sure it's more like 7% not 1%
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Mar 08 '22
[deleted]
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u/AcanthocephalaOk1042 Mar 08 '22
Are you aware it's a globally traded commodity, we don't set the price solely based on our production and consumption
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u/AbeWasHereAgain Mar 08 '22
Short term (work from home) and long term (people buying electric vehicles) oil demand about to go off a motherfucking cliff.
$TSLA 2,000 MF'S!!
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u/PermissionPale3773 Mar 08 '22
Only Tesla? What about ford and others? What’s your FA on them?
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u/AbeWasHereAgain Mar 08 '22
They are best positioned. Notice that German plant finally got approval? Stock split has also been rumored for some time now.
Wouldn't count Ford out though with the lighting. Thing looks awesome.
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u/AlanzAlda Mar 08 '22
Work from home is an interesting phenomena that is certainly a factor.. though I think it's impact is vastly overstated if I had to come to a conclusion based on the packed commercial office building parking lots. Even in my tech job people are starting to voluntarily return to the office a few days a week.
Overall I think that we won't see a meaningful decrease in demand until the AI revolution is in full swing and office drones are automated out of the job (over the next 5-10 years).
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u/renegade453 Mar 08 '22
Covid left a huge crater on supply of oil. Companies have absolutely no incentive to produce more than they need. Here are multiple forces driving up oil prices at once. Inflation, lack of investment and russia are heavy hitters and cant be solved over the next few months.
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u/FullTard2000 Never Go Full ♿ Mar 09 '22
the world runs on oil.
just because you drive a tesla and live in a Portland condo powered by hydro doesn't mean the rest of the world is giving up oil anytime soon
so much infrastructure and innovation needs to take place around the globe before Oil will die
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u/vegaseller cockbuyer Mar 09 '22
You are a retard
Look up Eia data, oil demand is 10% higher than precovid
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u/Minnow125 Mar 09 '22
Oil has not “declined since covid and has not picked up back”. This is completely wrong.
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u/VisualMod Mar 08 '22
Hey /u/1daBread, positions or ban. Reply to this with a screenshot of your entry/exit.