Oil rebound anytime soon ? Stocks to watch or get in to?

[BCClone]

One thing supporting oil is the dollar. A strong dollar is what opec wants. All oil transaction are done in US$. They then gain on the exchange rate into their currency. If we really wanted to put the screws to the Middle East, we would take the dollar down. That would help the US oil sector, trade in general, and made other oil countries hurt.

Oil companies are going under, many have idled rigs when they can. Drilling companies are hurting. Oil output in the US has dropped. Ethanol subsidies are basically nonexistent now. The mandates are what is holding it together along with cheap corn and new production shortcuts

I see support in that 30 dollar area. One thing to consider is dividend paying stocks. I have a couple companies paying 14-16 percent dividends now that the stock is half of what it was. Buy those and after a couple years, you have recaptured a big chunk. Find companies with cash, there are some looking to pounce. When you hear oil companies buying smaller ones, move quickly, they are signaling what they project as the bottom.

 

[JohnnyAppleseed]

 

[ArgentCy]

Care to elaborate more on this ? Any opinion on SLW ?

Yes, one of my favorites but have been waiting to pick it up below $10. Have owned some physical shares since buying around $3.

 

[intrepid27]

I own some UCO. It is an Electronically Traded Fund. It is a 2X ETF so if crude goes up 1% it goes up 2% and so forth.

 

[DurangoCy]

I own some UCO. It is an Electronically Traded Fund. It is a 2X ETF so if crude goes up 1% it goes up 2% and so forth.

Be careful with this, as a lot of them have a pretty significant decay rates due to the way they're structured.

 

[jsmith86]

Crude isn't going to be up for at least another year, barring some sort of war involving the Saudis and Iran. Right now however, would be a good time to invest in oil companies that are going to be around when it goes back up, but that would be a long term investment that is likely to be painful in the short term.

 

[cyatheart]

I have actually been wondering the same thing.

Saudi has to depeg or cut production, they aren't going to cut. So either dollar weakens or Saudi depegs, one of the two have to happen for crude to go up much.

 

[CascadeClone]

Two thoughts:

1) I think a lot of the Iran impact is priced in. The other factor is the world economy looks like its trapped in a port-a-john and someone is about to tip it over. 2016 is going to be bad. 2017 too probably.

2) Is oil at a bottom and you should buy in somehow? Depends. How long do you want to hold it? If you wait 5-10 years it should certainly be higher. If you are expecting a 50% rebound in 3 months, well, that's harder to predict.

 

[ISUCyclones2015]

I got more or less pretty lucky investing in a few pharmaceuticals before they were FDA approved. FDA approves them and $$$$

I do the same thing! Got burned one time when the FDA didn't approve it though.

Also, I am gonna hold out until the end of Spring. I think the market needs to stabilize with Iran exporting again.

 

[IASTATE4LIFE]

I have just started putting my money back into oil on friday. I don't think this is the low, but I plan to scale in. I am purchasing some high dividend stocks and the USO. I am also selling puts so if it goes lower I will just get lower price ownership, if it rallies I make some money. This seems like the kind of drop that we will see some capitulation and see a "V" bottom formation at some point. Once I see the V, I will be again adding to my position. I see the scale out opportunity beginning between 3-6 months and continuing up to 3 years. So It is by no means a get rich quick trade.

 

[jsmith86]

Two thoughts:

1) I think a lot of the Iran impact is priced in. The other factor is the world economy looks like its trapped in a port-a-john and someone is about to tip it over. 2016 is going to be bad. 2017 too probably.

2) Is oil at a bottom and you should buy in somehow? Depends. How long do you want to hold it? If you wait 5-10 years it should certainly be higher. If you are expecting a 50% rebound in 3 months, well, that's harder to predict.

A rebound like that isn't going to happen. Most of the tanker fleet is already in place as temporary floating storage and now another country is entering the market.

Before oil goes back up, it will have to absorb all that surplus supply. And then when it does go back up, there are a good amount of wells ready to go here in the US as certain price points are reached, further extending the time for a full return on higher prices.

 

[buf87]

It will bottom when nobody expects it. Land bubble of the 80's, $8/cwt pigs in the late 90's or 2000.

 

[cyfan92]

Are you looking for short term(within 5 yrs) or long term(over 5 years) gains?

Short term I like Visa and guidewire software inc. I work in investments so the best advice I could give you is to probably not take my advice... NOBODY knows what to do near term

 

[SCNCY]

If you are looking to get in to oil, I would figure out how much money you want to invest and slowly put money in the market. As you put more in to the market, you increase your purchase each time, assuming the market continues to fall. This will do a couple things. 1) if the bottom has been hit, at least you got in close enough. 2) if the market falls further, your initial investment loss will be less than if you went all in first. If the market continues to fall, you will be able to buy more shares at cheaper prices, but still limit your overall loss. 3) Your average cost per a share should go down with each purchase.

 

[CtownCyclone]

I got more or less pretty lucky investing in a few pharmaceuticals before they were FDA approved. FDA approves them and $$$$

I'm hearing good things about Provasic. Check out Devlin MacGregor.

 

[Boxerdaddy]

I am buying gold/silver right now. (If simply to balance my portfolio more)

Others commented on oil Iran need to get cash, throw in alternatives like solar becoming cheaper and cheaper
China has also cut back on coal usage and oil consumption, significantly.

They have shut down multitudes of coal burning plants.

I bought some silver a year or so ago with the intent of just holding for a rainy day or if the silver/gold ratio swings the other way. It's hard to see nearly a 33% reduction in what i own, but again, i bought it for the long haul. that being said...with the prices where they are, i've looked at buying more, however I don't think it is near the bottom yet. I am a novice, but with the interest rates going up, people don't want to hold metals as they could get a better return if they put that into other interest earning sources. At least that's what i've been told.

Would love to hear your take on it.

 

[Cyclonepride]

Some say iranian oil has already been priced into the lows.

Probably. If you are investing based on the news of today, you are way too late.

 

[brokenloginagain]

saying you're new to investing and you want to know which oil stock to buy is like saying you're new to skiing and you'd like to know which double black diamond at vail you should try.

people forget that oil was ~$20 for 20 years. this may take awhile.....

 

[BoxsterCy]

Some say iranian oil has already been priced into the lows.

This. Not like lifting the sanctions on oil wasn't foreseen as a done deal.

 

[BoxsterCy]

saying you're new to investing and you want to know which oil stock to buy is like saying you're new to skiing and you'd like to know which double black diamond at vail you should try.

people forget that oil was ~$20 for 20 years. this may take awhile.....

So Schoolmarm green at Keystone?