Energy companies

[boneil]

With the current information we have, rig count rising, production rising or steady, pathetic US gdp data, and slowing china, there isn't any reason, that I see, for oil to rebound significantly anytime in the near future. XOM and CVX reported terrible numbers today, Exxon profit fell by 50% and Chevron profit fell by 90%. Other companies are in the same boat and many energy names are at or near 52 week lows. These companies are laying off thousands of workers and cutting capex by the billions. It's not going to be pretty, unless something changes.

I am starting to wonder if dividends are in danger. Could low oil prices and the affects of low oil be the event that brings this bull market to an end? I can't see this market making new highs without the energy sector participating.

And this doesn't include what a strengthening dollar does to the situation.

Thoughts/ counter points??????????

[NitroZ7]

It is really hard to know. Cramer had someone one from Cabot the other night that said oil will be at 80 at the end of the summer and on CNBC there are articles saying oil will be in the 30s. The truth is probably right where we are right now between 40 and 60. I think a lot of this has to do with fears about a slowdown in China and those fears may be well founded given the drop in other commodity prices. This period of time we are in right now is the poster child for diversification. This economy and market can go in a lot of different directions.

[200xp]

On my drive home tonight I was listening to fast money, they were talking about the big oil company dividends. Most agreed they were in jeopardy. I don't think the dollar is going to regress anytime soon, probably will get stronger. It is heard to trust any information coming out of china, the current regime can and does manipulate the data. It makes it difficult to determine is it that good or is it that bad. To address the question, I do not think the big oil companies can put a permanent drag on the market, but could cause a short term pause in the progress.

In relationship to oil consumption, the one thing I never hear anyone talk about is the efficiency of the human race. By that I mean each year well build machines, all types, that produce the same horsepower, but consume less fuel. I know the heavy construction equipment I buy is 25 to 30% more fuel efficient than the same size equipment I purchased 15 to 20 years ago. Solar is becoming more popular and so are electric cars. One need to look no further than Tesla. I believe alternative fuel is having an impact on oil consumption. The price of oil started to go up several months ago because rig counts were declining. Then the speculators realized, even with less rigs we were producing more oil, and back down it went.

I steer clear of the oil companies from an investing perspective. Then again, I am not a long term investor, I am a trader. It has been one heck of a run and eventually there will be a correction. I have no idea what the catalyst will be, but I doubt if it is big oil....that is my 2 cents, FWIW.

[Bug88]

APA earnings thur..............they will take a bath...........................then buy.................oil will go up.......Ive got time....)

[Gambler Bob]

That is beating they got today!!

[boneil]

I always hate being in agreement with Goldman.

[milligjg]

I hope it comes back around, I've got some of my 401K wrapped up in energy (wide variety).

[boneil]

I find it interesting that production continues to stay high and today the rig count was up again. That makes 5 of the last six weeks where oil rigs where coming online. I am wondering if these oil companies are trying to pump out the oil with these rigs while the price is where it is because they feel that it may be lower in the future and this is the best price they can get. There will come a time that I enter a trade on oil but that won't come until we take out the 2009 lows or we get a catalysts. There has to be a reason for a rise. I could see oil making it back to the mid 50's on a squeeze. But I don't think it will sustain it long term.

[Bassin08]

It's not just oil, it is also the companies that support them, such as KMI. It has really been a sharp decline these last few months. I am going to hang onto my shares for the dividend, but I sure hope that the share price comes back up. I'm not sure if their share price is due to the oil market, or the consolidation of their companies last year? I do know that when I was holding KMP, it was a great stock.

[Bamaman]

All my money's tied up in two boats, and they've been a great investment--in my sanity.

Oil will be back. It may just take awhile. And with interest rates continuing at about net zero rates, the stock market's the only place to go. Just not in oil right now. But with the DOW dipping somewhat, now's the time to buy--something.

[NitroZ7]

It's not just oil, it is also the companies that support them, such as KMI. It has really been a sharp decline these last few months. I am going to hang onto my shares for the dividend, but I sure hope that the share price comes back up. I'm not sure if their share price is due to the oil market, or the consolidation of their companies last year? I do know that when I was holding KMP, it was a great stock.

If production is continuing then they need to move it or store it. I would think production would slow at some price level but wh really knows. I have a few Mlps which I am holding for the distribution. They have been hit but I bought them years ago so not really showing any losses yet. I bought Starbucks back before the split and it has done well. I guess if you are a long term investor you just try to hold the top companies in diversified sectors so a slowdown in one does mean a slowdown in the other.

[washbdm]

BLKG has performed pretty well for me over the last year. Thought it may take a bit of a downturn with the price of oil, but it's held its own. Might be worth looking into.