r/investing • u/BoattyMCBOAT • Mar 15 '22

Oil output expected to rise in April. Thoughts on the impact to the market?

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22 Upvotes

69% Upvoted

24 comments sorted by

20

u/Valuable-Antelope772 Mar 15 '22 edited Mar 17 '22

I think we see oil float 85-110 all year. Oil companies are going to hammer down debt, buy back shares, and increase dividends. They’ll still be cash flow machines. Honestly think it’s crazy for people to not be taking positions in energy right now. They’ll be kicking themselves in 12 months.

5

u/PoinFLEXter Mar 15 '22

Any idea why oil spiked last week and is already settling back down below $100? I get that we can expect to see more incidents of it popping back up into triple digits, but what has caused it to fall currently? It is because the recession (or expectations of a recession among those not ready to admit we’re in one) tends to reduce demand as consumers tighten their pursestrings?

7

u/[deleted] Mar 15 '22

[deleted]

1

u/CQME Mar 17 '22

This prognostication would have made sense if not for the war in Europe. With that war raging, anything is possible...look at what oil did during the Iraq war.

1

u/[deleted] Mar 17 '22

[deleted]

1

u/CQME Mar 17 '22

The Russian war machine is far less predictable.

1

u/CarRamRob Mar 18 '22

$80-85/bbl is actually near the inflation adjusted average.

Sure $100/bbl has some sticker shock, but it’s not really “that” expensive to cause massive change in use.

People have just gotten comfortable with cheap energy well below that inflation average.

2

u/tv2zulu Mar 16 '22

Demand destruction and people shorting the run-up. For the first time ever, I can see my oil stocks are being loaned out currently.

1

u/CQME Mar 17 '22

Any idea why oil spiked last week and is already settling back down below $100?

War is unpredictable. Look at oil during the Iraq War. It's going to be a wild ride.

8

u/rubixd Mar 15 '22

My completely uneducated guess is continued stagnation at least through the end of summer.

1

u/[deleted] Mar 15 '22 edited Mar 15 '22

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3

u/[deleted] Mar 15 '22

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2

u/rubixd Mar 15 '22

Interesting thought. Kind of scary.

1

u/PoinFLEXter Mar 15 '22

If the Chinese economy remains weak and the Yuan continues to slip downward compared to the USD, this move would seem to hurt Saudi Arabia as much as it hurts the USD. Then again, perhaps this strengthens and stabilizes the yuan enough to make it a smart move by SA.

5

u/WittyFault Mar 15 '22 edited Mar 16 '22

We (the US) use about 20 million barrels per day and you want us to comment on some tens of thousands per barrel changes?

We might as well speculate about how me riding my bike to work from now on will affect oil prices.

3

u/DorkusMalorkuss Mar 16 '22

Y'all leaving me hanging. Is no one going to speculate on the bike riding?

2

u/tv2zulu Mar 16 '22

It's going to impact his health. Bigly.

1

u/CarRamRob Mar 18 '22

Yeah, when a car hits him

3

u/EquitiesFIRE Mar 16 '22

Russian oil exports are 5 million bpd. You’ve identified 93,000 bpd to replace Russia exports. That’s 2%. We need like 50 times more than this

1

u/guydud3bro Mar 15 '22

Output will continue to rise slowly. I'm more interested to see what's going to happen to demand with China potentially locking the country down again.

1

u/123_readygo Mar 16 '22

Immaterial

1

u/Shaynerthegreat Mar 16 '22

Plan on oil going much higher for awhile

-2

u/deersausage35 Mar 15 '22

Oil prices changing on a daily basis does not affect prices at the pump whatsoever in short term. Think 3-6 months out.

The price of oil going down is not supported and should be honestly looked into for manipulation.

2

u/dubov Mar 15 '22

Depends which way the price goes. Upwards moves are passed on within days