Market in the toilet who’s buying?

Varmint

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Happens more frequently than people think.

Market sold off by over 20% in Q4 2018 when Powell spoke on Oct 3rd and send panic about interest rates.

Market also imploded 35% in 2020 in the throes of covid.

Just part of the deal, never fun.

Both crashes only reversed when the Fed went Uber dovish. They’ll have to do it again this time.
 

Varmint

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Tomorrow is the big Fed announcement. The market is down only 10% from the high, so the Fed cannot change it’s tune yet or they’ll look like cowards. They don’t need to do anything yet.

Which means they will just repeat the taper talk without throwing a bone to the market and things will get ugly this week. The market is testing the Fed’s resolve and they can’t afford to blink at just a 10% pullback. Watch for a major down day tomorrow or Thursday.
 
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I sold everything but my oil stocks, and stocks that I was long and way up on.........still very bullish on oil, and maybe banks. Since Biden rolled in here they've done everything they can to get oil to 100 a barrel.

Chevron has doubled for me, plus a nice 5% dividend added. I just wish I have had more money to throw at it.
Noone, I mean NOONE, wants oil over $100. Not the Saudis, the Russians, US shale, Biden, oil investors, greenies, offshore guys. NOONE. Even if they think they do, they don't want it...


Oil going up is a natural outcome of supply and demand. It going up too much, too quickly, will result in literal bloodshed
 
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Broccoli Iglesias

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Happens more frequently than people think.

Market sold off by over 20% in Q4 2018 when Powell spoke on Oct 3rd and send panic about interest rates.

Market also imploded 35% in 2020 in the throes of covid.

Just part of the deal, never fun.
Didn't the market also take a dump for a short time around September 2020?
 

Mark from MA

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Noone, I mean NOONE, wants oil over $100. Not the Saudis, the Russians, US shale, Biden, oil investors, greenies, offshore guys. NOONE. Even if they think they do, they don't want it...


Oil going up is a natural outcome of supply and demand. It going up too much, too quickly, will result in literal bloodshed
Not sure I follow........is it because they then will not be able to control inflation with higher interest rates?

I get the Saudi's and Russians don't want it because it makes the US Shale guys go full bore and we become more energy independent.

The greenies want it because they want everyone buying Electrics.

The auto companies don't want it because their bread and butter are trucks and big SUV's.......which in 2005 when gas was 4.50 a gallon, were rotting on lots because people were buying Corollas and Prius's. Coincidently that's when I bought my last truck for 15K off sticker.

But now Auto companies are going electric for even those vehicles.....so they have an out.
 
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Not sure I follow........is it because they then will not be able to control inflation with higher interest rates?

I get the Saudi's and Russians don't want it because it makes the US Shale guys go full bore and we become more energy independent.

The greenies want it because they want everyone buying Electrics.

The auto companies don't want it because their bread and butter are trucks and big SUV's.......which in 2005 when gas was 4.50 a gallon, were rotting on lots because people were buying Corollas and Prius's. Coincidently that's when I bought my last truck for 15K off sticker.

But now Auto companies are going electric for even those vehicles.....so they have an out.
Oil prices rise too high/too fast:

Russians and OPEC (cartel)/ Oil investors/companies/shale: they ramp up drilling. Which increases flows, dropping prices. Cannibalism occurs in the industry-Rinse and Repeat the 7 yr oil bear market that we are only now recovering from. The fall is equally hard. Investors should want a slow, gradual rise. To fully take advantage of one of the last few oil up cycles.

Biden-mid terms elections, and 2024 elections coming up, high oil prices bad for the vote. One of the most critical materials in the world driving up prices for everything, not just gas.

Greenies have the least to lose. But I include green countries in mainland Europe under this. See whats happening at the Ukrainian tug of war.
The demand for hydrocarbons is insatiable. Powerplant HC fuels are switchable.



Rolling blackouts, energy poverty, upheaval, most importantly war. The next great conflict will likely be fought over oil/gas IMHO.
 
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Fed didn’t throw the stock market any dovish platitudes so tomorrow is going to be interesting.
I love how he consistently lies through this teeth claiming over and over that the rise in inflation is caused by supply chain issues. Also stating that once the supply chain issues resolve themselves by the end of the year inflation will taper off. Sure buddy.
 

Broccoli Iglesias

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I love how he consistently lies through this teeth claiming over and over that the rise in inflation is caused by supply chain issues. Also stating that once the supply chain issues resolve themselves by the end of the year inflation will taper off. Sure buddy.
Why is the end of the year the magic time this gets solved?
 

Varmint

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I love how he consistently lies through this teeth claiming over and over that the rise in inflation is caused by supply chain issues. Also stating that once the supply chain issues resolve themselves by the end of the year inflation will taper off. Sure buddy.

It’s that or admit the tides going out and he’s not wearing pants.
 

dans

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Noone, I mean NOONE, wants oil over $100. Not the Saudis, the Russians, US shale, Biden, oil investors, greenies, offshore guys. NOONE. Even if they think they do, they don't want it...


Oil going up is a natural outcome of supply and demand. It going up too much, too quickly, will result in literal bloodshed

Whose Noone?
 

Mark from MA

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I love how he consistently lies through this teeth claiming over and over that the rise in inflation is caused by supply chain issues. Also stating that once the supply chain issues resolve themselves by the end of the year inflation will taper off. Sure buddy.
Not if oil is at 100 a barrel.

Diesel trucks bring everything to market and fuel drives the prices up on everything.

They lie about true inflation anyway. Everything I buy to live is up more than 8% Fuel - 50%, Groceries and Consumables - 20%, Meat - 50%, Ammo - 30%, where is this magical 8% number coming from. I'd love 8% inflation at this point.

I think this market has more to go......earnings have been great....and they are being ignored because people don't believe the inflation numbers, and beleive they are going to have to hike interest rates a hell of a lot.
 
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Not if oil is at 100 a barrel.

Diesel trucks bring everything to market and fuel drives the prices up on everything.

They lie about true inflation anyway. Everything I buy to live is up more than 8% Fuel - 50%, Groceries and Consumables - 20%, Meat - 50%, Ammo - 30%, where is this magical 8% number coming from. I'd love 8% inflation at this point.

I think this market has more to go......earnings have been great....and they are being ignored because people don't believe the inflation numbers, and beleive they are going to have to hike interest rates a hell of a lot.
Oil is definitely heading over $100 a barrel this summer. Coming out of fake lockdowns and everything opening back up like flights, cruises, driving, transport, etc, etc. Not to mention the inability for OPEC nations failing to deliver output!

Eta the elephant is economical growth. And Russian invasion of Ukraine.
 
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Woodsloafer

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Oil is definitely heading over $100 a barrel this summer. Coming out of fake lockdowns and everything opening back up like flights, cruises, driving, transport, etc, etc. Not to mention the inability for OPEC nations failing to deliver output!

Eta the elephant is economical growth. And Russian invasion of Ukraine.

I think the days of cheap oil are over and there may be some dips but it is only going up from here. All the world's largest oil fields are in decline (and, because of this, it is more expensive to get that remaining oil out of the ground, it is "harder" to "pump"/extract from those reserves) as far as what they are producing and even if there are new discoveries the cost of recovering will be expensive as the oil is not easy to get to, nevermind the forces working against oil. People talk about Bakken, etc. but with the higher costs for materials, steel, labor, it will only be more expensive to get that oil out of the ground even if shale oil production increases. Even Bakken, at it's highest estimates of maybe 12 billion barrels of oil, is less than two years supply for the United States at 20 million barrels per day so even if they get every single drop out, it is still a small quantity in the big picture and only getting more expensive to extract.
 
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I think the days of cheap oil are over and there may be some dips but it is only going up from here. All the world's largest oil fields are in decline (and, because of this, it is more expensive to get that remaining oil out of the ground, it is harder to pump, etc.) as far as what they are producing and even if there are new discoveries, the cost of recovering will be expensive as the oil is not easy to get to, nevermind the forces working against oil. People talk about Bakken, etc. but with the higher costs for materials, steel, labor, it will only be more expensive to get that oil out of the ground even if shale oil production increases. Even Bakken, at it's highest estimates of maybe 12 billion barrels of oil, is less than two years supply for the United States at 20 million barrels per day so even if they get every single drop out, it is still a small quantity in the big picture.
Yep, I wonder where the biggest potential oil basins are currently located?
 
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I think the days of cheap oil are over and there may be some dips but it is only going up from here. All the world's largest oil fields are in decline (and, because of this, it is more expensive to get that remaining oil out of the ground, it is harder to pump, etc.) as far as what they are producing and even if there are new discoveries, the cost of recovering will be expensive as the oil is not easy to get to, nevermind the forces working against oil. People talk about Bakken, etc. but with the higher costs for materials, steel, labor, it will only be more expensive to get that oil out of the ground even if shale oil production increases. Even Bakken, at it's highest estimates of maybe 12 billion barrels of oil, is less than two years supply for the United States at 20 million barrels per day so even if they get every single drop out, it is still a small quantity in the big picture.
The war premium is a key driver. As long as the ground is frozen Russian will in the next few weeks make a move on eastern Ukraine. This brings back the industrial heartland as well as a nice land corridor for Crimea. The sanctions from Western nations will be weak. No one will sanction the energy sector at this stage. It’s gonna get very interesting this year.
 
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Yep, I wonder where the biggest potential oil basins are currently located?
Probably some of the early stage wildcat explorers might be good bets this year. Western Canada, East Africa, and Israel.


We may get a nice dip in energy prices and stocks that would be the last, especially if we get a severe recession based on European shenanigans.
 
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Probably some of the early stage wildcat explorers might be good bets this year. Western Canada, East Africa, and Israel.


We may get a nice dip in energy prices and stocks that would be the last, especially if we get a severe recession based on European shenanigans.
Mega unexploited fields which are not stranded, and face minimal native ESG concerns. I'm thinking offshore (SW Africa-Nigeria, Angola, Namibia and NE S. America-Suriname, Guyana, Brazil) and onshore in harsh environments (Arctic Russia). These are fairly well identified oil producing areas-neighboring finds, late stage exploration..Poor countries that have more to gain and fewer environmental regulations. Lower cost of doing business...
Rich countries (Europe and the US) are holier than thou, willing to give up energy independence in order to check boxes at the Paris Climate Accords.

Mega onshore finds are going to be few and far between. A lot of the low hanging fruit has been picked. Eg domestic fields played out by conventional methods decades ago are now being "redrilled" with hydrofrack.

Forget who said it first, but we know more about the surface of the moon than the ocean floor.
 
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Varmint

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The war premium is a key driver. As long as the ground is frozen Russian will in the next few weeks make a move on eastern Ukraine. This brings back the industrial heartland as well as a nice land corridor for Crimea. The sanctions from Western nations will be weak. No one will sanction the energy sector at this stage. It’s gonna get very interesting this year.

I don’t know, Germany offered helmets to Ukraine. Way to stand up to Russia, guys! [laugh]

‘The behavior of the German government leaves me speechless. The defense ministry apparently hasn’t realized that we are confronted with perfectly equipped Russian forces that can start another invasion of Ukraine at any time. What kind of support will Germany send next, pillows?’

— Kyiv Mayor Vitali Klitschko
 
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I don’t know, Germany offered helmets to Ukraine. Way to stand up to Russia, guys! [laugh]

‘The behavior of the German government leaves me speechless. The defense ministry apparently hasn’t realized that we are confronted with perfectly equipped Russian forces that can start another invasion of Ukraine at any time. What kind of support will Germany send next, pillows?’

— Kyiv Mayor Vitali Klitschko
They also sent medical supplies….you know…for the wounded 🤣
 
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