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Don D.
With the political vent and that also of many people to cut carbon at almost any cost it seems that the coal industry is virtually now dead. I have not invested there for years, but with that and most of our power usage on the east coast and natural gas seemingly the current winner where do you foresee the pricing to move toward in the next few years. Also would you be a buyer of the pipelines or the Utica exploration companies. If I have reviewed my oil pipeline maps it seems MWE, SXL have some of the biggest networks moving into the east coast. What are your views on this?
I read your piece about supplies and also demands, as I sit listening to the talking heads, one hears we are so over supplied, and that every oil well is pumping full bore. Then they boast pricing down to the mid 20’s others say we should move upward as the US supply will drop due to normal well depletion. MLP’s should be be making a lot of money with gasoline usage up, storage high, processing of Nat Gas up due to hotter summer. With that and also the drop in SUNE does one go for potential upside with new funding deal, or future of oil?
Robert Rapier
Writing an article on this now Don. I read someone write yesterday “The price of oil is definitely going below $40 today.” Well it didn’t. And he couldn’t figure out why, because in his mind the fundamentals favor lower prices. But he is only seeing half the picture, and not recognizing that traders are looking ahead.
This will probably be the topic of next week’s Energy Letter. I will bring facts and data to the table.
I plan to publish a shortened and modified version for The Energy Letter next week.
Don D.
Robert,
I appreciate the piece you attached, I studied it in depth and have a better understanding of the supply issues, I know our refineries were set up to distill heavy crude decades ago when we mostly imported, so it seems our refusal to allow exports means we keep the light crude here in the US and import so our refineries can get us gasoline. Do the morons in government have any real desire to understand you can be awash in oil and it still not solve anything, no different than being in the middle of the ocean and have nothing to drink.
Yesterday MLPL lost about 9% wheras AMLP rose by about 2.5%. Don´t they have the same underlyings so that they should move into the same direction (at different speeds though as MLPL isn leveraged)? Is there a fundamental explanation for this discrepancy or is it due to the risk that comes with MLPL being an ETN?
Igor Greenwald
Actually the underlying index was down 4% Monday, so it’s the action in AMLP rather than MLPL that seems anomalous. I don’t really have a good exlanation for why AMLP behaved the way it did, other than perhaps there was a prior discount to NAV that disappeared on Monday, But it’s always worth remembering that MLPL is leveraged on a monthly rather than a daily basis and, like other ETFs and ETNs, is subject to additional volatility based on liquidity or lack thereof. Lots of ETFs behaved funny early Monday as their liquidity dried up, though I don’t know of any others that outperformed their index like AMLP did for the day. I will never recommend AMLP because of the serious tax leakage involved. It’s doomed to dramatically underperform its index on an annual basis.
It’s a would-be general partner that’s lost the confidence of the investors in its yieldcos as the moment, and would be worth considerably more under new ownership/management. Backing out ot the unfortunate and poorly received Vivint Solar acquisition would help a great deal as well. With all that said, the downward price action has been excessive, as this former hedge-fund motel completely turned over its shateholder base in recent weeks. I’m modestly optimistic in the near term and much more so over the long haul from current price levels, though it remains a very risky play suitable only for the most aggressive speculators.
With the purchase of Cameron by SLB do you feel this could be the early innings or mergers? If so and I don’t try to invest in arbitrage but what solid companies E&P or Processors could be the biggest targets for buyouts. The move with a 50% price premium from yesterday is significant although not significant to January values but significant none the less.
Robert or Igor I just read this piece from Jim Rogers who over time I have found to have a unique view of the world compared to most in the US. You have professed much of the same on supply and demand and his last few lines make me ponder exactly where to invest next if supplies truly deplete and his statement about frackers. Will companies like WLL, MTDR, CXO survive the current financial down turn and thus turn into the next amazing investments for the foreseeable future?
I think we will look back and laugh that EOG or COP ever got this cheap. There are come concerns over COP’s dividend at this price, but they have announced a commitment to maintaining it. They may have to divest some of their deepwater holdings to do so.
A very nice move off the bottom to the upper 40’s and should see some near term dips I would assume. With that now that cash is ready and I have reviewed your buy lists and also having some of them already, and when this next dip takes place as it seems Russia, Venezuela (even not that big a producer) and Saudi whispers of production adjustments which pieces are the best to select. I like MMP, SXL for years, MTDR, EOG,CXO and ALJ so with that do I just add to these and will say I am not a fan of the large integrated firms.
Stock Talk
Don D.
With the political vent and that also of many people to cut carbon at almost any cost it seems that the coal industry is virtually now dead. I have not invested there for years, but with that and most of our power usage on the east coast and natural gas seemingly the current winner where do you foresee the pricing to move toward in the next few years. Also would you be a buyer of the pipelines or the Utica exploration companies. If I have reviewed my oil pipeline maps it seems MWE, SXL have some of the biggest networks moving into the east coast. What are your views on this?
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Peter
Why has ETE dropped by more than 4% after their earnings report, when distributale cash flow had risen by 55%? What am I missing here?
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Don D.
I read your piece about supplies and also demands, as I sit listening to the talking heads, one hears we are so over supplied, and that every oil well is pumping full bore. Then they boast pricing down to the mid 20’s others say we should move upward as the US supply will drop due to normal well depletion. MLP’s should be be making a lot of money with gasoline usage up, storage high, processing of Nat Gas up due to hotter summer. With that and also the drop in SUNE does one go for potential upside with new funding deal, or future of oil?
Robert Rapier
Writing an article on this now Don. I read someone write yesterday “The price of oil is definitely going below $40 today.” Well it didn’t. And he couldn’t figure out why, because in his mind the fundamentals favor lower prices. But he is only seeing half the picture, and not recognizing that traders are looking ahead.
This will probably be the topic of next week’s Energy Letter. I will bring facts and data to the table.
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Robert Rapier
Don, I just published an article Why the $20 Oil Predictions are Wrong:
http://www.energytrendsinsider.com/2015/08/20/why-the-20-oil-predictions-are-wrong/
I plan to publish a shortened and modified version for The Energy Letter next week.
Don D.
Robert,
I appreciate the piece you attached, I studied it in depth and have a better understanding of the supply issues, I know our refineries were set up to distill heavy crude decades ago when we mostly imported, so it seems our refusal to allow exports means we keep the light crude here in the US and import so our refineries can get us gasoline. Do the morons in government have any real desire to understand you can be awash in oil and it still not solve anything, no different than being in the middle of the ocean and have nothing to drink.
You must be logged in to post to Stock Talk OR create an account
You must be logged in to post to Stock Talk OR create an account
You must be logged in to post to Stock Talk OR create an account
Peter
Yesterday MLPL lost about 9% wheras AMLP rose by about 2.5%. Don´t they have the same underlyings so that they should move into the same direction (at different speeds though as MLPL isn leveraged)? Is there a fundamental explanation for this discrepancy or is it due to the risk that comes with MLPL being an ETN?
Igor Greenwald
Actually the underlying index was down 4% Monday, so it’s the action in AMLP rather than MLPL that seems anomalous. I don’t really have a good exlanation for why AMLP behaved the way it did, other than perhaps there was a prior discount to NAV that disappeared on Monday, But it’s always worth remembering that MLPL is leveraged on a monthly rather than a daily basis and, like other ETFs and ETNs, is subject to additional volatility based on liquidity or lack thereof. Lots of ETFs behaved funny early Monday as their liquidity dried up, though I don’t know of any others that outperformed their index like AMLP did for the day. I will never recommend AMLP because of the serious tax leakage involved. It’s doomed to dramatically underperform its index on an annual basis.
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C. Fisher
Can you comment on SUNE.
Igor Greenwald
It’s a would-be general partner that’s lost the confidence of the investors in its yieldcos as the moment, and would be worth considerably more under new ownership/management. Backing out ot the unfortunate and poorly received Vivint Solar acquisition would help a great deal as well. With all that said, the downward price action has been excessive, as this former hedge-fund motel completely turned over its shateholder base in recent weeks. I’m modestly optimistic in the near term and much more so over the long haul from current price levels, though it remains a very risky play suitable only for the most aggressive speculators.
You must be logged in to post to Stock Talk OR create an account
You must be logged in to post to Stock Talk OR create an account
Don D.
With the purchase of Cameron by SLB do you feel this could be the early innings or mergers? If so and I don’t try to invest in arbitrage but what solid companies E&P or Processors could be the biggest targets for buyouts. The move with a 50% price premium from yesterday is significant although not significant to January values but significant none the less.
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Don D.
Robert or Igor I just read this piece from Jim Rogers who over time I have found to have a unique view of the world compared to most in the US. You have professed much of the same on supply and demand and his last few lines make me ponder exactly where to invest next if supplies truly deplete and his statement about frackers. Will companies like WLL, MTDR, CXO survive the current financial down turn and thus turn into the next amazing investments for the foreseeable future?
http://www.marketwatch.com/story/rogers-dont-rule-out-a-bull-run-in-commodities-2015-08-26?dist=lcountdown
Robert Rapier
I think we will look back and laugh that EOG or COP ever got this cheap. There are come concerns over COP’s dividend at this price, but they have announced a commitment to maintaining it. They may have to divest some of their deepwater holdings to do so.
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You must be logged in to post to Stock Talk OR create an account
Don D.
A very nice move off the bottom to the upper 40’s and should see some near term dips I would assume. With that now that cash is ready and I have reviewed your buy lists and also having some of them already, and when this next dip takes place as it seems Russia, Venezuela (even not that big a producer) and Saudi whispers of production adjustments which pieces are the best to select. I like MMP, SXL for years, MTDR, EOG,CXO and ALJ so with that do I just add to these and will say I am not a fan of the large integrated firms.
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