Oil stocks got hammered today, again.

[One_more_turn]

Schlumberger, leader of the oil driller pack, is down another 4.46% today. Crude oil and gasoline prices will most likely decline very soon because stocks are always a good leading indicator. It seems a slowing global economy and hawkish central banks around the world are having an effect.

I think soon people will be enjoying $2.50/gal gas in the US, until the next run up of course.

[Zkribbler]

....however....one of the biggest corporate buyers of its own stock right now is ExxonMobile. It didn't get to be the most profitable corporation in the galaxy by making serious financial blunders.

Regardless, irregardless and non-regardless of what happened in today's marker, oil stocks are going to be going up-up-up-up-up!

[Asher]

Heh.

A couple friends of mine just got hired at Schlumberger here in Calgary right out of school -- $70,000CDN/year starting salary...for software QA work. Plus the perks.

Oil!

[One_more_turn]

I'm still long term bullish about oil: supply is limited, 20 years of bear market has done lots of damage to the supply infrastructure; demand is there, China's per capita oil consumption is like 1/40 of the US.

Even if we start drilling in ANWR today, we won't see any meaningful production until 5+ years out. Canadian oil sands sound cool, but they also take time to reach a meaningful level of production. Other forms of substitutes are but a drop in the bucket compared to the petroleum consumption.

If Schlumberger gets down to 50 or even 40, it's a brainless buy for me.

[One_more_turn]

ExxonMobil is a dog: its reserves are declining, its production is not growing, its dividend yield is pathetic, its management is outrageously greedy, and governments are squeezing it.

ExxonMobil's arrogant posture regarding global warming is not winning any friends either. They could at least act like the hypocrites such as BP and Shell to make their own lives easier.

[DanS]

I'm still long-term bearish about oil. Long-term, I doubt $70/bbl can be sustained, since there are viable substitutes at that price.

[One_more_turn]

It takes lots of time to create new supplies. Until then, bull market!

I expect the oil to make a run at the inflation-adjusted all-time high of $89/bbl during this summer. After that, we are going to have a serious correction as the world economy slows down and demand drops.

[One_more_turn]

Oil down almost 3% today. More downs are ahead.



cheaper gas on the way

[Asher]

If the stocks are losing value, wouldn't the companies want to increase value by maximizing profit...?

[One_more_turn]

When oil hits lower 60s, something will happen in oil producing countries, be it the Nigerian rebels kidnapping Shell workers, be it another suicide attack against Saudi oil facility, be it Chavez raising oil taxes again, be it Gazprom having another "pipeline outage", be it Iranians talking about nukes..... Something will happen.

But should the oil price continue to decline despite all the above, you know the bull market is over.

[Frozzy]

Lord Browne, the chief executive of oil firm BP, has said he expects crude prices to fall from current near-record levels as more supplies are discovered.

However Lord Browne, speaking in an interview with German magazine Der Spiegel, said there was not likely to be any dip in prices in the short term.

He said prices will probably settle at an average of about $40 a barrel in the medium term, before falling lower.

Prices have surged this year amid fears about supply and global instability.

No certainties

A combination of these factors pushed oil to more than $75 a barrel in April, amplifying concerns that the increased raw material costs would seriously impede global growth.

There was a short respite and dip in oil prices at the end of last week when top militant Abu Musab al-Zarqawi was killed in a US-led operation in Iraq this week.

Consumers are ready to pay for the protection of the environment
Lord Browne

A barrel of New York light crude was trading at $71.63, while a barrel of London benchmark Brent crude was at $70.48.

"We cannot really count on oil prices easing very much in the near future," Lord Browne told Der Spiegel in an interview due to be published on Monday.

"But is very likely that oil prices will range in the medium term around an average of $40," he continued. "In the long run it could even be $25 to $30."

Lord Browne said that companies were finding large oil deposits in the Caspian Sea, while there was good production potential in countries such as Russia and regions including Western Africa.

He also said that improved efficiency would help boost crude extraction.

"In the past we managed to get out 20% to 30%," Lord Browne said. "At the moment it's maybe 40% to 45%. I can see no reason why we could not reach 50% or 60%."

Green issues

One of the factors to emerge from the recent high oil prices has been an increased focus on developing alternative sources of energy.

Lord Browne said in the future consumers would have a large role to play in deciding the success of new technologies.

"Consumers are ready to pay for the protection of the environment," he explained. "In Europe more and more people get green electricity despite coming at a higher price. Ten years ago this would have been unimaginable."

http://news.bbc.co.uk/2/hi/business/5069294.stm

[One_more_turn]

Do you think those guys can talk about $90 oil in the public and get away with it?

ExxonMobil has been talking $25-$30 oil ever since 2003. What we got instead is a run-up from $35 to $70 during the same time.

I always take a contrarian view of those "public announcements". Whenever someone makes noise about $100, $200, $300 oil, a correction is near. Last March Goldman Sachs came out with a $105 price target, and oil plunged from $58 to $44 soon after. This April Soros spoke of $260 oil, and oil already fell from $75 to $67. Now he's talking about $40 oil on CNBC, which I believe the purpose is to scare some chicken **** to sell out to him.

[Kidlicious]

Re: Oil stocks got hammered today, again.

Originally posted by One_more_turn
Schlumberger, leader of the oil driller pack, is down another 4.46% today. Crude oil and gasoline prices will most likely decline very soon because stocks are always a good leading indicator.

As far as the indicator goes, I disagree that stock prices are good indicators, but if the economy shows more signs of recession than that would be a good indicator of falling oil and gas prices.