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Buy, Sell or Hold: Suncor Energy Inc.
On July 21, when oil was trading at some $125 a barrel and in an apparent freefall, I issued a scaled “Buy” on Chevron Corp. (NYSE: CVX). I based this call on the stock’s ultra-low valuation and the company’s business model, which would enable it to keep posting strong profits even at lower margins. Despite the huge market sell-off – and a whipsaw market for oil that saw prices fall to as low as $90 a barrel before rebounding recently – Chevron’s stock has outperformed both the broader stock market and its oil-sector peers. At Friday’s closing price of $86.95,…
29Sep2008 | Money Morning | Comments Off | ContinuedThe Western World Running on “Eâ€
Western nations — the U.S., in particular — are now experiencing the bow wave of a profound change in the current and future availability of oil. According to recently published data, oil output from all major Western oil companies is on an ominous decline trend. Exxon Mobil, for example, announced that its average oil output has fallen by 614,000 barrels per day in 2008.
Western oil majors like Exxon are finding it harder than ever to identify new prospects and successfully complete new oil projects. This comes despite the fact that the oil industry is flush with profits from upstream operations,…
2Sep2008 | Whiskey and Gunpowder | Comments Off | ContinuedPeak Oil, Politics, and U.S. Energy Supply
Western nations – the U.S., in particular – are now experiencing the bow wave of a profound change in the current and future availability of oil. According to recently published data, oil output from all major Western oil companies is on an ominous decline trend. Exxon Mobil, for example, announced that its average oil output has fallen by 614,000 barrels per day in 2008.
Western oil majors like Exxon are finding it harder than ever to identify new prospects and successfully complete new oil projects. This comes despite the fact that the oil industry is flush with profits from upstream operations,…
29Aug2008 | Energy and Oil | Comments Off | ContinuedOil Defies a Correction…
The returns are coming in from the distant precincts of the oil patch, and the winner is……… Oil!
The price for oil has barely budged based on the Saudi Summit. There has been no summer sell-off, and I’d be surprised to see a significant pull-back as the summer driving season kicks into gear. (Followed by hurricane season, and then the buildup for winter heating stocks, followed by winter.)
What’s going on? Well, what the Saudis give — in proposed, future increased production… the Nigerians take away — with ongoing oil patch carnage that forces the likes of Shell & Chevron to close vast pipeline systems.…
26Jun2008 | Energy and Oil | Comments Off | ContinuedEnergy Q&A Part II: Investing in Oil Refiners and Oil Service Companies
Q: “Why is it that the refiners aren’t making any money with oil as high as it is? Aren’t they charging more for their services?â€
Refiners make money on the “crack spreadâ€. They profit from the difference between the price of crude oil they buy and they price they receive when they sell the refined product. But right now, refiners are squeezed between rising crude prices and consumer resistance at the gas pump.
Refiners have to pay the world price for crude oil. The markets dictate that price. Right now, there are no major physical shortages in the reports from the oil…
19Jun2008 | Energy and Oil | Comments Off | ContinuedBig Oil’s Secret Impoverishment
The headlines seem to be rolling in nonstop for Big Oil: “Chevron Posts Record $17 Billion Profit. BP Profit Up 52%, Record $4.4 Billion Quarter.†And the giant among giants, “Exxon Mobil Reported All-Time Record $39.5 Billion Profit.â€
We’ve all seen these headlines before and, sad to say, many investors bought into the hype. Both Chevron and Exxon Mobil shares have climbed more than 150% in the past five years. BP, despite constant problems with its pipelines and international operations, has scored a 50% gain in the past five years.
On the surface, it seems like a pretty safe bet, right? Big…
7Feb2008 | Anonymous | Comments Off | Continued
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