Oil is down 2.8% at $51.78 as I write this. Looks like $80 oil won't happen this year. The know-it-all experts will be wrong again. How do you like those low gasoline prices in Houston? How do you like losing your job?
7 replies (most recent on top)
Correction- it was the Gulf of Oman. No one claims responsibility for the attacks. Who knows? Stay tuned.
Nothing beats middle east military action to increase crude oil prices. Two oil tankers in straight of Hormuz damaged by mines and/or torpedo with one on fire. No one claims responsibility, but Iran is top suspect. Sad, but stuff like this might save your job.
Buffet, Icahn and a few big banks will end up owning most of Oxy in short order and then they will sell what's left of it in 2023-2024 to the highest bidder for another stack of chips. VH will be ousted by an eventual shareholder revolt and growing internal unrest of other key management personnel, and or BOD placed by key investors. She will go back home with her millions, none the worse for wear. Oil will see $40 /bbl before 2024 and many will have to tighten their belts before a liberal democrat moves into the white house in 2024. The shale revolution will result in a glut of US oil while ever more increasingly WTI, becomes WT Light, then WT Condensate, then not worth the cost to drill and produce. Every operator in the oil business simply can't frac the shale to smithereens and not expect diminishing returns at some point in the future. The eventual and inevitable downgrade of the Permian resource will be due to over frac'd shale, diluted acreage plays, over prices services, large scale bankruptcies and a prolonged coupling with $45 per barrel that will wipe the shine off of most operator's P&L in the Permian. They call me Nostradumba$$. Just saying its a theory.
If crude oil price averages well below $60 for the rest of the year, then more cost cutting will obviously be necessary. Investors hate reducing the dividend, so look for more asset sales, project budget reductions/ cancellations and higher layoff numbers. All because of an overpriced purchase of Anadarko with the added Buffet expense. Some people here will not be around for 2020.
Now at $51.07, down 4.13%.
OXY may be crippled for years. Aside from the massive pending layoffs and asset sales to reduce the the massive pending debt load, CAPEX spend will be reduced to the bare minimum. Only the the non-operated interests will be funded as OXY does not control the the cash calls from the operators.
The incompetent and poorly operated companies like Oxy will be hit the hardest, especially given the latest calamity of the Anadarko purchase. The share price hit is also amusing.