Oil opportunity

Glen_Clark

Dan83 wrote: »

I'm not doubting your knowledge of the market, the reason I thought shale would of been a good investment is, I live in the northwest, there isn't a week that goes by with out it being in the news.

When its in our local news its usually because NIMBYs are calling for restrictions on it, which makes it a bad investment.

jaydeeuk1

Soon the barrel the oil is held in will be worth more than the contents.

Theres an investors saying; 'Never catch a falling knife'.
I'd wait until the price shows signs of stabilising, if not rising. Might be a while though, perhaps when Iran, Israel and saudi arabia go to war over the next year or two it will be a good time to buy

Shmo

Can't remember who mentioned this article but it was an interesting read given the date.

The Economist - Drowning in oil - Mar 4th 1999

Oil was $10 a barrel back then and the article suggests that it could fall to $5, which it never did, but it's amazing how well that article called the bottom as it rose fairly steadily for the next couple of years back up to $30 after that article before it dipped again.

I guess there's so much speculation on the price that it's almost impossible to determine what the true level should be.

Personally I'm sad because my Shell shares have gone down a lot, but then I filled my car for £45 yesterday so it's not all bad. Also given current trend of the oil price I can predict with 100% certainty that by this time next year they will be giving away oil for free so I'm looking forward to that.

bigfreddiel

Glen_Clark wrote: »

Its a bit more compliicated than that. What is likely to happen is that the companies who have borrowed heavily to pay for exploration, drilling, planning permission, equipment etc etc will go bust under a sea of debt. But then someone else will buy up their oil wells for fire sale prices, and since they have little debt to service their only extra cost will be maintaining the pumps, so they can pump shale oil profitably for sub $30 a barrel.
(Shell could have done that if they had not been too keen, jumping in too soon, and paying too much for BG)

Of course I over simplified it

Most people won't remember anything complicated, that's if they understood it in the first place! That may sound harsh, or condescending, but it's true.

You can give the most complicated jargon rich explanation you wish. And it's just as likely to be as right or wrong as a simplified explanation, because in reality no one really knows anything, it's just that the gullible public are more likely to believe something they can't understand but won't asl for clarification in case they look stooopid!

So oil will bottom out at around $10 a barrel, June July time from there who knows. Shale oil and gas won't be going anywhere soon.

Glad that's cleared up

fj

booksurr

Shmo wrote: »

Can't remember who mentioned this article but it was an interesting read given the date.

The Economist - Drowning in oil - Mar 4th 1999

Oil was $10 a barrel back then and the article suggests that it could fall to $5, which it never did, but it's amazing how well that article called the bottom as it rose fairly steadily for the next couple of years back up to $30 after that article before it dipped again.

I guess there's so much speculation on the price that it's almost impossible to determine what the true level should be.

Personally I'm sad because my Shell shares have gone down a lot, but then I filled my car for £45 yesterday so it's not all bad. Also given current trend of the oil price I can predict with 100% certainty that by this time next year they will be giving away oil for free so I'm looking forward to that.

on that basis you had better bookmark today's BBC news page then

http://www.bbc.co.uk/news/business-35362397

bigfreddiel wrote: »

Shale oil and gas is dead and buried, it was only a goer when oil was $100+ a barrel. At sub $30 a barrel it isn't economic to produce

This is why the Saudi's have been over producing to kill off shale gas and oil.j

don't know what you do for a living, but the BBC's Economics Correspondent would not agree with your punditry of who is responsible...."The oil price has plummeted 75% since mid-2014 as oversupply, mainly due to US shale oil flooding the market, has driven down the cost of the commodity."

enthusiasticsaver

I won't ever invest in individual company shares. Much too risky for me. All it takes is an oil disaster like BP had a few years ago and that could wipe a massive percentage off them. On the plus side though it cost me £30 to fill my car with diesel today which is the lowest it has been for more time than I can remember.

doe808

Will add BP and buy Shell once things settle down. Will I call the bottom? No chance, but as I normally hold shares around 10 years, its not critical.

KNJ_2

Oil companies delay exploration and production at these levels, it is just not economic, and the lead times are horrendous.
If you want a real gamble look at oil futures. Get it right and it is a 10x increase in investment. Wrong well,,,,,, I do not want to think.
Serious gamblers, sorry investors only. Might be worth a punt if it goes below 20

Glen_Clark

doe808 wrote: »

Will add BP and buy Shell once things settle down.

What do you mean by 'settle down'?
If you wait till the future looks better won't the share price have already risen?
Oil goes in cycles and Shell is half what it was, so if you get in now you at least you are nearer the bottom of the cycle than the top.

eskbanker

Glen_Clark wrote: »

Oil goes in cycles

Indeed it does, it helps them run smoothly