The US oil price has fallen below the symbolic threshold of $50 a barrel for the first time since April 2009.

[Ricboff]

who's the happiest chap with surging oil prices (recently hit a 2015 high)?.....

http://www.cnbc.com/id/102653143

[h=1]Russia: Back from the brink[/h]
Interest rate cuts, rallying oil prices and an easing of tensions with neighboring Ukraine: Russia couldn't ask for a better combination perhaps to bring it back from the brink of economic crisis.

Last week the country's central bank slashed interest rates by a 150 basis points to 12.5 percent amid a recovery in the Russian ruble and signs that inflation in the country had peaked.

"The ruble has been on a tear from very depressed levels and this has a lot to do with oil, which is a huge performer," Joseph Dayan, head of markets at BCS Financial, told CNBC on Tuesday

"Close to 60 percent of Russia's budget is dependent on oil or oil-related income, so not surprisingly, both of these moves are going together. There are other things that are coming together for the Russian story – geopolitical factors in particular," Dayan added.



that's a well diversified economy ya got there, Mr.Putin.........

 

[ScottL]

^^^Well then it's time for American Frackers to hang another 'For Shale' sign!

 

[Ricboff]

ha Scott!!!


the Iranian oil minister is at it again, calling for a steady climb of oil to $80. Dunno about that.... Clearly USA is becoming a huge player in the game

http://oilprice.com/Energy/Oil-Pric...elp-U.S.-Companies-Win-The-Oil-Price-War.html

[h=1]This Innovation Will Help U.S. Companies Win The Oil Price War[/h]

Although some US oil companies are struggling with low oil prices, a new wave of innovation is hitting the oil patch, allowing for a significant reduction in drilling costs.A variety of different improvements in production are starting to show up at all levels across the industry from small firms to oil majors. Statoil for example recently noted that it is experimenting with different types of sand and chemicals to improve production. And a number of companies have noted that they are moving from drilling wells one at a time, on an ad hoc basis, to drilling multiple wells at once. GE Oil & Gas has produced variable-use pumps that can be turned on and off in order to save energy versus the previous 24-hour a day operation cycle.

The end result of these actions is that per-barrel costs of oil have fallen to around $60 today versus $75 a year ago according to Citi analysts. And executives from oil companies are now forecasting that per barrel prices could fall to $50 or less before long. America has not yet lost the price war.Now, one small Denver-based oil company has come up with a whole new modelfor producing in order to further drive down costs. Described as an “oil factory,” Liberty Resources LLC and its CEO Chris Wright have developed a novel method for extracting oil. The firm is starting out by doing everything it can to eliminate the need for trucks traveling to and from its site. The company notes that trucks are often an irritant with local residents and more importantly, they add significantly to the cost of producing oil.

To do that Liberty will build a series of pipelines to its massive 10,000 acre Bakken site. The firm has pipelines that carry water and gas produced by wells, as well as other pipelines to carry oil. This technique is called ‘centralized resources’ and while other firms like Continental have explored it to some extent, Liberty is pioneering the process. In essence, the firm is trying to bring the efficiency focus of industrial engineering to the production focus of petroleum engineering

In addition, like Statoil and a few other larger oil firms, Liberty is also focused on creating a production process than can be stopped and started based on optimal production times, costs, and oil prices. This could be an invaluable capability. Take Russia for example. Russian oil wells will freeze if they are shut down, and the country lacks significant storage capacity. As a result, Russian oil producers cannot respond to price downturns.

Moreover, Liberty is developing the entire 10,000-acre site to be fracked at once with nearly a 100 oil wells operating simultaneously. By drilling multiple wells at once and controlling inputs and output supply, the firm has significant cost advantages versus traditional ad hoc production methods. Even employee costs are lower, with Liberty citing the use of a third less workers than a conventional production process.So what is the combined result of all these efficiency improvements? Liberty says it will still make money even with oil at $50 a barrel. And the firm expects costs to keep falling as oil service companies become more efficient and lower their own prices. At these prices and efficiency levels, US production becomes competitive with virtually any other oil source. And if efficiency gains continue at this pace, the US may weather the onslaught of Saudi oil much better than many expected




.............

USO cooling off,taken to the woodshed today. it'll shall 5 straight days of losses......

 

[Ricboff]

regrettably been on the sidelines with USO- it's moved sidelines , tight trading range . Neat for covered call selling, esp when premiums offered are 2% higher on monthly contracts.

The below will be telling as to where OIL shall move, short term....big week coming up...


[h=1]Iran may usher a quick return to $50 U.S. oil prices[/h]
The oil market’s mostly focused on U.S. supply data this week, but next week should be all about Iran and the deadline for a final agreement over its nuclear program.
If a deal between Iran and six world powers is reached by the June 30 deadline, Iran could soon start dumping millions of barrels of oil into the global market, ushering a quick return of $50 oil prices.
“Iran has at least 34 large tankers full of oil — about 50 million barrels or more — ready to “sell and sail” if sanctions are lifted, said Byron King, editor of investment newsletter Outstanding Investments.


He said some of that may have been pre-sold or deals may have already been wired, but “that’s a massive distortion waiting to hit markets as soon as it’s legal.”
Analysts debate over just how much oil Iran has in floating storage, but all agree that the oil can have an immediate impact on the global market.
Michael Lynch, president of Strategic Energy & Economic Research, said the amount may be more like 30 million to 40 million in storage, but it “could hit the market very quickly.”
Even if sanctions on Iran are not lifted right away, some buyers, such as India and China, may “assume that enforcement will be lax,” he said. “So traders are likely to give a small bump downward in oil prices, probably by $5 a barrel, and then wait to see what happens.”
That could happen within about a week following an agreement, he said.
And “if Gulf exporters suddenly find their market weakening because Iran has unloaded its stored oil, they might offer discounts and keep prices for [West Texas Intermediate crude] in the $50-$55 range,” said Lynch.
Crude oil for August delivery CLQ5, +1.28% settled Tuesday at $61.01 a barrel on the New York Mercantile Exchange. Prices haven’t traded close to the $50 level since early April.
Meanwhile, Saudi Arabia, which has been pumping more than 10 million barrels of oil a day with no signs of a slowdown, probably will not cut back to make room for Iranian oil, said James Williams, an energy economist at WTRG Economics.
Saudi Arabia, the top producer in the Organization of the Petroleum Exporting Countries, has made it clear that it has no plans to slow production, as it continues to battle non-OPEC producers for market share.
Against that backdrop, Williams sees oil prices falling by $5 to $10 a barrel — and possibly by more in the short term if the Iranians dump the oil it has in storage in tankers, he said.


http://www.marketwatch.com/story/ir...to-50-us-oil-prices-2015-06-23?dist=afterbell

 

[PatsFan1283]

All the China volatility having a big effect on oil

By Nick Cunningham
Posted on Thu, 09 July 2015 22:38 | 1





The latest fall in oil prices is once again putting pressure on indebted shale companies.
After falling from over $100 per barrel down to $43 per barrel at its lowest point in March of this year, WTI prices rebounded with a 40 percent rise, trading for more or less $60 per barrel for May and June.
The rebound appeared to spell the end to the worst of the glut, with production plateauing, if not falling, and demand starting to rise. Although estimates were all over the map, many saw a strong bounce coming in the oil markets, with some even predicting supply shortages before the end of the year.
A few companies donned a renewed sense of confidence, suggesting that they would start drilling again with oil prices in the $60-per-barrel range.
Related: OPEC Still Holds All The Cards In Oil Price Game
Still, mountains of debt had accumulated across the U.S. shale sector. That didn’t go away but was sort of on hold as drillers, and their financial backers, hoped that further price increases would allow them to pay down debt. To stay afloat, drillers issued new debt and equity.
But the renewed plunge in oil prices is kicking off a fresh round of debt concerns. Bloomberg reported that energy-related junk bonds have lost 3 percent of their value in the last two weeks, after WTI crashed to nearly $51 per barrel and Brent fell below $57. Bond traders are avoiding high-yield, high-risk debt, and yields have jumped to nearly 10 percent, a level normally associated with default risk.
“The energy sector of the high-yield market continues to be a silo of misery,” Margie Patel with Wells Capital Management, told Bloomberg telephone interview. “If we stay near these levels, marginal high-cost producers won’t be able to survive.”
Bonds due in 2020 for Energy XXI, a driller in Louisiana, are now trading at 84.5 cents on the dollar, and Oklahoma-based SandRidge has seen its debt fall to 87 cents on the dollar.
Related: The Next Fracking Boom May Be Closer Than You Think
The markets will get a clearer picture as second quarter earnings season arrives, as indebted shale companies provide some clues into their ongoing struggles.
Saudi Arabia is very worried about the coming shale boom in Argentina… and with good reason

George Soros, Warren Buffet, major hedge funds and other savvy investors all have their eyes on Argentina and the massive undeveloped shale reserves they have just opened up to outside oil companies.

Click here to sind a unique way to play this massive opportunity


However, the outlook moving forward may be gloomier than whatever they report in the second quarter.
The swift drop in oil prices over the past year was driven by tepid demand and surging supplies. But the renewed drop has occurred because of broader market turmoil, which comes on top of the ongoing glut. Greece has defaulted on its debt and the stage is set for its exit from the euro, with unknown ramifications for the EU. That could weaken oil prices through a stronger dollar, falling EU demand, and a higher perception of risk.
More concerning is the meltdown in the Chinese financial system. The Shanghai Composite and has lost more than 30 percent of its value since June and the Shenzhen Composite has seen 40 percent of its value vanish into thin air. While the precipitous decline raised worries at first and saw modest action from the government, the turmoil is quickly turning into a meltdown, sparking panic in China and around the world.
Related: Dodging The Export Ban: U.S Condensates Export Flourishes
Now Chinese regulators, in a desperate attempt to stem the outflows, havebanned large shareholders selling their stakes for at least five months. Companies representing roughly 45 percent of the two exchanges (or $2.4 trillion) are suspending trading, trying to avoid more sell offs.
"We are seeing a panic in China. It goes back to 2008, when it always seemed the Chinese were really in control of their economy. They were the first ones out there with a stimulus, and now it looks like they don't know what to do,” oil historian and vice chairman of IHS said on CNBC on July 8.
Of course, as the largest oil importer in the world, China has massive influence over prices. A sharp downturn could crush oil prices.
That would ensure larger default rates in the shale industry.
By Nick Cunningham of Oilprice.com

 

[superbeets]

[h=1]Opec: oil demand on the up but US output growth is slowing[/h][h=2]World's major oil-producing group sees more balanced oil market as US supply growth is expected to slow[/h]

US oil drilling has slowed Photo: AFP


The Organisation of the Petroleum Exporting Countries has signalled the oil market may be turning slowly back in its favour after it revised upwards its forecast for world oil demand once again, while predicting supply from the US will grow at a slower pace.

The group, which controls roughly a third of world oil supply, said in its latest monthly market report that oil demand in 2015 was now expected to grow by 1.28 million barrels per day (bpd), following an upward revision of 100,000 barrels from its last report.

In 2016, world oil demand growth is forecast to pick up by 1.34m bpd, reaching nearly 94m bpd. Meanwhile, Opec said that supply growth outside the cartel had slowed since last year as lower oil prices hit investment.

The group said that total US petroleum liquids production was expected to grow by around 330,000 bpd, just one third of the growth of 930,000 bpd that was originally expected.

Opec said in the report: “Cuts in (US) upstream spending and lower drilling activity levels have started to impact output.”
The cartel of 12 mainly Middle Eastern oil producers triggered an oil market war last year when it decided in November to leave falling prices unchecked. A number of Opec members have grown concerned over the growth of shale oil fracking in the US, which has challenged its dominance of the crude market.

Oil prices opened trading weakly on Monday with Brent crude falling briefly to below $57 per barrel. The benchmark for crude is down 40pc from levels seen last year. Prices are being weighed down by the prospect of a nuclear sanctions deal with Iran, which could result in the Islamic republic opening its spigots.
As Iran prepares to pump more oil onto the market, Opec said that it expected demand for its own crude to dip below 30m bpd this year before recovering next year.

 

[Ricboff]

this is an eye opener...

http://www.cnbc.com/2015/07/12/fina...rrows-4bn-as-oil-price-reality-hits-home.html

[h=1]Saudi Arabia borrows $4B as oil price reality hits home[/h]

Saudi Arabia has borrowed $4bn from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump.
Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected.





anyway, i'm back in...

sell 20 puts USO Aug (17) @ .69


....dagone.......

 

[PatsFan1283]

this is an eye opener...

http://www.cnbc.com/2015/07/12/fina...rrows-4bn-as-oil-price-reality-hits-home.html

Saudi Arabia borrows $4B as oil price reality hits home



Saudi Arabia has borrowed $4bn from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump.
Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected.





anyway, i'm back in...

sell 20 puts USO Aug (17) @ .69


....dagone.......

Saudi's actually want to curb domestic consumption. Their consumption has skyrocketed last few years because oil is like 50cents/gallon there. People leave the ACs on all day.

They subsidize oil in a way that people use it like we use water.

http://www.wsj.com/articles/saudis-take-steps-to-curb-oil-consumption-1430881485

Rick you want a sweat on oil? DNR 5.30, 11yr low, gulf coast company that extracts from wells that are near depletion. Chop mentions it in this thread.

 

[PatsFan1283]

[h=1]Refracking: Shale Revolution 2.0?[/h][h=2]by Nick Cunningham | @nickcunningham1 | July 09, 2015[/h]

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Innovations in hydraulic fracturing and horizontal drilling have allowed the U.S. to become one of the world’s largest oil producers in recent years. However, the abruptness of the production surge has raised many questions about its longevity. Meanwhile, the collapse in oil prices is testing the resilience and staying power of the U.S. shale industry.

Fracturing a shale well allows for an initial burst of oil and gas production, but flow rates drop off precipitously almost as soon as a well is fracked. That means that shale drillers have to keep up a brisk pace of drilling, fracturing new wells to offset the decline of old ones. Maintaining the pace of drilling is possible, but in the past it has required high oil prices andloose credit. Markets are watching to see if drillers can continue to produce oil at elevated levels now that prices have tanked.
Low oil prices could be temporary, however. Over the longer-term, there are even bigger questions surrounding the U.S. shale industry’s ability to survive. After the “sweet spots” in the most promising plays are depleted, will anything be left? According to the International Energy Agency (IEA), U.S. shale output is expected to begin declining as soon as the early 2020s.
Fracking 2.0
Just as the shale industry upended global markets and shocked observers when it unleashed a torrent of new oil and gas production over the past decade, there could another revolution brewing.
We have heard a lot about the efficiency gains that shale drillers are achieving now that oil prices are low—more wells per well pad, more sand used in the fracking process, cost reductions from oil field service companies—but these innovations are just nipping around the edges. Sure, some marginal wells could become profitable with a more prudent approach to drilling, but nothing substantial is taking place in the oil patch that will upend the prognosis of long-term decline.
That’s with the exception of one phenomenon, however, that is generating buzz and raising speculation that it could dramatically alter long-term projections and kick off a new shale frenzy: Refracking.

The attraction of refracking is obvious: Only around eight percent of a reservoir’s oil is recovered after the initial frack job, so refracking allows drillers to unlock another burst of oil and gas.
​

The process is as straightforward as it sounds—fracking a well again after it has already been fracked, targeting the portion that may have been “unstimulated” or “understimulated” the first time around. The attraction is obvious: Only around eight percent of a reservoir’s oil is recovered after the initial frack job, so refracking allows drillers to unlock another burst of oil and gas.
Usually, companies simply drill a fresh well after one is fracked, even if the next well occurs on the same well pad. Once the drilling operation is completed, the company moves on to another site and drills more wells. The industry has become rather efficient at setting up new well pads, fracking them, and proceeding to the next job. That has allowed for cost reductions as drilling has started to resemble a manufacturing process, with standardization and assembly not dissimilar to a factory line. Nevertheless, more efficient drilling may have achieved cost reductions, but companies still need to develop “greenfield” projects over and over.

Early results show that refracked wells could produce as much as 30 percent more oil than they did the first time around, at 25 percent of the original drilling cost.
​

Refracking could allow drillers to return to old wells and just frack them all over again. Better yet, early results show that refracked wells could produce as much as 30 percent more oil than they did the first time around, according to Bloomberg. And since the wells have already been drilled, the refrack can be done on the cheap, perhaps as low as $1.8 to $2.2 million, or about 25 percent of the original drilling cost. That sounds pretty alluring as companies have seen cash flows dry up amid the oil price downturn.
Schlumberger CEO Paal Kibsgaard talked up the opportunity earlier this year when the company reported its first quarter earnings. “In terms of the market potential, I think you’re talking billions, in terms of revenue opportunities, over an extended period of time,” Kibsgaard said. He even suggested that his company is so confident in refracking that it would take on all of the risk, paying the costs of the refracking operation upfront and only receive compensation from the operator after production.
Looking past the hype
Refracking is still in its early stages. Wells that have been refracked number only in the hundreds—a drop in the bucket when you consider the fact that over 35,000 wells were drilled in the U.S. in 2014 alone, according to Baker Hughes. Right now, a strained oil industry is eager for a breakthrough, but despite the excitement around refracking the technology still has a lot to prove.

Due to these challenges, the practice has been nicknamed “pump and pray” by operators.
​

Refracking also carries substantial risk. Unlike fracking a new well, refracking targets only parts of the well that have not been fractured. That sort of precision is technically challenging and depending on the specifics, can result in higher costs. Moreover, if not done properly, it can ruin a reservoir. Even without errors, refracking could merely drain off oil from an adjacent well. Due to these challenges, the practice has been nicknamed “pump and pray” by operators.
So far, the industry’s take is mixed, with some executives choosing to steer clear for now. “We have not tried any refracks. Our outlook on that is that it is really technical,” Bill Thomas, CEO of EOG Resources, told Reuters. “We believe that just drilling a new well, and kind of starting fresh… is probably the preferred way to go,” he added.
EOG is not the only company that remains unconvinced. “I personally have a lot of experience with refracks, most of which was not that good,” the COO of Range Resources, Ray Walker, said on a first quarter conference call, according to Natural Gas Intelligence.

Analysts at Bernstein called refracking “trivial,” and overly hyped because of the success of a few specific examples.
​

Analysts at Bernstein called refracking “trivial,” and overly hyped because of the success of a few specific examples. “Much of the literature is from service providers or E&P operators that achieved some success,” a Bernstein report concluded. “In addition, much of the market talk around refracks is similarly skewed positive.”
Another shale revolution

Refracking could have pitfalls, but the fact that the technology is in its early stages means there is plenty of time for the industry to refine and improve its methods.
​

The original shale revolution had no shortage of naysayers. Refracking could have pitfalls, but the fact that the technology is in its early stages means there is plenty of time for the industry to refine and improve its methods. Halliburton estimates that there could be as many as50,000 wells that are “candidates” for refracking. Furthermore, with the industry eager for breakthroughs that will enable it to draw more oil from favored reserves while slashing costs, expect innovators to pour money into making this technology work.
Of course, the true extent of the opportunity will only become clear as the industry moves forward. The number of refracked wells is expected to rise from hundreds to thousands in the next few years. “The most important factor to get this off the ground is for E&Ps, particularly service companies, to make large investments to test this,” James Coan, a senior analyst with IHS Energy, said in during a May 20 webinar. “Who is going to be the George Mitchell of refrack?” George Mitchell is credited with pioneering fracking and horizontal drilling, two techniques principally responsible for the shale revolution.
Refracking could allow drillers to gain access to enough reserves to last another 50 years, according to Bloomberg estimates. For an industry expected to see peak production within the next five to ten years, refracking could be revolutionary.

 

[ShotgunPete]

Now that it look's like the sanctions for Iran is going to be lifted how much is oil going to drop in price?Can they make that much of a difference on the market?

 

[PatsFan1283]

Now that it look's like the sanctions for Iran is going to be lifted how much is oil going to drop in price?Can they make that much of a difference on the market?

Not immediately they can't in terms of supply but speculation can take care of that as far as the market goes. It depends how fast they can ramp up production now that they have huge incentive to do so. If they can really produce 2-3million barrels a day to go with their reserves, it will definitely put downward pressure on prices. We won't really know what they can fully churn out until like 2017 and by then many variables in place now will be different.

 

[Ricboff]

this is an eye opener...

http://www.cnbc.com/2015/07/12/fina...rrows-4bn-as-oil-price-reality-hits-home.html

Saudi Arabia borrows $4B as oil price reality hits home



Saudi Arabia has borrowed $4bn from local markets in the past year, selling its first bonds for eight years as part of efforts to sustain high levels of public spending as oil prices slump.
Fahad al-Mubarak, the governor of the Saudi Arabian Monetary Agency, said the government would use a combination of bonds and reserves to maintain spending and cover a deficit that would be larger than expected.





anyway, i'm back in...

sell 20 puts USO Aug (17) @ .69


....dagone.......

bloody oil forming new 52 week lows...how low does she go..


needless to say i'm likely going to be called, i'll take today's positive day in oil to extend a month

buy back Aug (17) @ 2.22. Then sell Sept (17) @ 2.21

net pretty much the same as original , 0.68. Roughly 4%.





.................dagone

 

[Ricboff]

interesting opinion piece..

http://www.marketwatch.com/story/which-is-more-likely-33-or-75-oil-2015-07-27

[h=1]Which is more likely, $33 or $75 oil?[/h]

At a time when stocks are hitting highs, oil prices have been cut in half. Relative to past prices, it is tempting to call oil “cheap” and buy it. Indeed, there are many bullish calls by analysts to do just that. I receive a very large number of emails, and investors are showing a high interest in buying oil ETFs here for the long-term. Let us first try to answer a very simple question, “Will oil go to $33 to $75?”
To answer, please take a look at these two charts.
Please click here for an annotated chart of oil price and U. S. shale production.

​

Please click here for an annotated chart of world liquid fuels production and consumption balance.
Let us examine both the technicals and fundamentals at this time.




Technicals
Based on oil’s current trading pattern, from a medium- to long-term perspective, traditional technical indicators in the categories of momentum, trend, volatility and volume are not only useless, but they are also likely to mislead investors into making wrong decisions.


There is some merit to looking at Fibonacci extensions. These extensions are shown on the chart. The chart is of NYMEX West Texas Intermediate crude-oil continuous contract. For trading purposes, the symbol is CLU5, -0.36%
Fibonacci extensions show downside potential to $33 and upside potential to $75. Interestingly, these levels are also in line with the analysis from the Quantitative Screen of the ZYX Change Method; this screen is based on supply and demand levels. The chart also shows the first resistance and first support levels. The background color of the chart is a composite of some of The Arora Report long-term indicators; green is bullish, red is bearish and blue is neutral. Our long-term models have been bearish on oil for a long time. It also shows trades taken by The Arora Report in oil.


Fundamentals
The oil price chart, on the top left-hand side shows U. S. shale production doubling from two million barrels per day to four million barrels per day. During this period, oil should have fallen, but it stayed rangebound between $90 and $120. The reason was that a vast majority of analysts remained bullish on oil with flawed models, as they were underestimating shale-supply growth and overestimating China demand growth. The chart also shows the point when OPEC decided not to cut the production. The OPEC announcement led to the opening of the flood gates for selling oil, and it had become obvious that analysts were wrong.


The second chart shows the world liquid-fuels production and consumption balance. Supply simply exceeds demand. With one exception, the fundamentals have not changed from what I described in “Nine reasons the price of oil will go lower.” The new development is the nuclear agreement with Iran. In our analysis at The Arora Report, we feel most analysts are likely to be proven wrong in their assessment that it will take Iran a long time to bring oil production to pre-sanctions levels. In our analysis, Iran will reach 3.5 million barrels by mid 2016.
Not investable, but tradable
At this time, oil is simply not investable from the long side. Downward pressure is likely to continue. However, there will be many trading opportunities from both long and short sides. For an example, please see, “What does the chart say about oil?“

​

The trouble with ETFs
Trading futures is not suitable for most investors. Fortunately, there are many ETFs such as United States Oil Fund LP USO, +2.27% ProShares Ultra Bloomberg Crude Oil UCO, +4.33% iPath Goldman Sachs Crude Oil Total Return Index ETNOIL, +2.48% VelocityShares 3x Long Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return UWTI, +6.56% and United States 12 Month Oil Fund LPUSL, +2.51%
There are also inverse ETFs that profit from oil going down. These include United States 12 Month Oil Fund LP SCO, -4.47% DB Crude Oil Double Short ETNDTO, -3.91% DB Crude Oil Short ETN SZO, -1.97% and VelocityShares 3x Inverse Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return DWTI, -6.31%
Investors may choose to focus on USO and SCO, as they offer the most liquidity.
The trouble with these ETFs is that they exhibit significant tracking errors. An investor can easily be right on oil, but the ETF may not perform in line with the oil move.
The reason behind these tracking errors is that most of these ETFs invest in oil futures instead of buying or selling oil. Oil futures expire, and the funds have to go into the next contract. The price adjustment does not always work in the ETF holders’ favor. Typically, an ETF is buying high and selling low as it rolls into new futures.
For the foregoing reasons, oil ETFs are not suitable for holding more than a few months.
Price forecast
Oil is the most volatile commodity, and our price forecast is revised weekly. We expect it to trade in a very wide range. Here are our forecast ranges at this time.

• 2015 — $33.00 to $62.00
• 2016 — $33.00 to $75.00
• 2017 — $55.00 to $85.00

 

[Michelangelo]

DNR from 3.11 on 8/5/15 to 4.28 close today.

 

[PatsFan1283]

I should've mentioned HOS in this thread, mentioned it in SSS.

Up to 20 from 17 just a few weeks ago. They have vessels that are best in class in the GoM and seem to be weathering the downturn better than expected.

Have a moat from protectionist maritime laws so not much competition. It is definitely a multi-year wait it out stock though, cheap oil is going to be here for a bit.

 

[Ricboff]

http://www.marketwatch.com/story/oi...a-asked-for-emergency-opec-meeting-2015-08-27

[h=1]Oil prices soar over 10% on report Venezuela asked for emergency OPEC meeting[/h]

Oil futures soared Thursday, with U.S. prices jumping more than 10% on a report that Venezuela has asked the Organization of the Petroleum Exporting Countries to hold an emergency meeting. Venezuela has also asked OPEC to consider a coordination with non-OPEC Russia to discuss a strategy to stem the recent rout in oil prices





..........dagone..........

 

[Ricboff]

oil closes over 10% for the day.....fuckin' wow.....talk about a violent rebound.............

 

[Ricboff]

.....shale ain't going away, sorry Saudis......

http://www.wsj.com/articles/oil-prices-start-week-on-softer-note-1440984590

[h=1]EIA Cuts U.S. Oil Output Estimates Year-to-Date[/h]

U.S. oil production this year was lower than previously estimated, the U.S. Energy Information Administration said Monday.
The newly released federal data confirmed that U.S. oil output has taken a hit from lower oil prices, as new investments have proven uneconomic and some companies have struggled to stay afloat.
Oil investors and analysts have been surprised this year that U.S. oil output, especially from shale-oil fields, remained robust even as last year’s plunge in oil prices led to a drop in spending on new drilling. Companies cut costs and became more efficient in the face of low prices, allowing them to keep production near multi-decade highs.


However, the EIA said in a blog post Monday that it has lowered its estimates for production in the first five months of the year by between 40,000 and 130,000 barrels a day each month, due to new survey methodology. The largest revisions came in Texas and the Gulf of Mexico.
In addition, the EIA said that June production fell by 100,000 barrels a day to 9.3 million barrels a day, bringing total production in the first half of the year to 9.4 million barrels a day.

 

[PatsFan1283]

Unless you think petro is done forever. CHK is cheap.

Good buy for someone trying to hedge fuel costs.

 

[Ricboff]

thought this article might be interesting for those that enjoy investing in individual stocks. Another route would be a basket of stocks, an ETF in the oil sector..................all assuming, one likes oil long term. Oil at $30-$40 changes the world dramatically, certain regions moreso than others.


http://www.marketwatch.com/story/11-oil-stocks-that-are-forecast-to-rise-up-to-53-2015-06-12


[h=1]11 oil stocks that are forecast to rise up to 53%[/h]The price of oil has staged a recovery from its March low. But not all producers’ stock prices have hitched a ride higher.
Oil rose to a 2015 closing high Wednesday, helped by six straight weeks of inventory declines.
Here’s how the S&P 500 Oil and Gas Exploration Index SPSIOP, +2.48% and the SPDR S&P Oil & Gas Exploration & Production ETF XOP, +2.44% have fared against the price of West Texas crude oil US:CLN5 over the past six months:

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FactSet


Following a remarkable recovery for oil prices from March through the middle of April, oil got stuck and producers’ stocks reversed themselves.“The stocks got ahead of themselves when oil started rallying” from the middle of March through the middle of April, according to Sterne Agee CRT analyst Tim Rezvan.
Rezvan, in a phone interview Thursday, said that over the past year, “the market has bid up names that are perceived to be of high quality.” Those include companies with a high share of shale-oil production in the Permian Basin in Texas and New Mexico.
[h=6]It’s all about production costs[/h]Rezvan on Wednesday rolled out a new “break-even cost analysis” for the 20 oil and gas producers he covers. The idea was to calculate “full-cycle” unit costs for each company’s oil or gas production and arrive at a “conceptual ‘break-even’ commodity price bogey for each company,” which would be 10% higher than the full-cycle cost. In other words, those are the commodity prices each producer needs to make a 10% return in that production category.
Rezvan broke up a group of 18 of the 20 stocks he covers into “oily” companies, with oil production making up 50% or more of the total stream; “gassy” companies, with natural gas making up 70% or more of production; and “combo companies,” with oil making up 25% to 50% of output.
Here’s the “oily” group, with Sterne Agee CRT’s estimated break-even points for barrel-of-oil-equivalent prices in 2015 and 2016, as well as each company’s estimated 2015 percentage of oil, natural gas liquids and natural gas production:

Company	Ticker	Estimated break-even price for oil - 2015	Estimated break-even price for oil - 2016	Estimated oil production %	Estimated NGL production %	Estimated gas production %
Diamondback Energy Inc.	FANG,+2.43%	$40.66	$39.28	77%	13%	10%
Carrizo Oil & Gas Inc.	CRZO,+3.00%	$43.93	$42.04	64%	9%	27%
Pioneer Natural Resources Co.	PXD,+1.13%	$46.18	$45.15	51%	18%	31%
Whiting Petroleum Corp.	WLL,+11.82%	$46.50	$46.86	81%	7%	11%
Energen Corp.	EGN,+2.50%	$49.86	$48.23	64%	17%	19%
Oasis Petroleum Inc.	OAS,+8.06%	$54.40	$52.62	89%	0%	11%
Callon Petroleum co.	CPE,+2.92%	$55.13	$53.74	81%	0%	19%
Denbury Resources Inc.	DNR,+5.17%	$70.91	$69.73	95%	0%	5%
Source: Sterne Agee CRT

Diamondback Energy Inc. FANG, +2.43% has the lowest estimated break-even cost for oil production for this group of producers covered by Sterne Agee CRT. And its stock is up 35% this year. Oil will make up an estimated 77% of the company’s production in 2015



Denbury Resources Inc. DNR, +5.29% is at the bottom of the list, with an estimated break-even oil price $70.91, which was more than 50% higher than Wednesday’s closing price for West Texas crude for July delivery. As a result, its shares have dropped 14% this year. Sterne Agee CRT estimated that oil will make up 95% of the company’s total production this year.
Here’s the “gassy” group, showing estimated break-even points per thousand cubic feet of natural gas:

Company	Ticker	Estimated break-even price for gas - 2015	Estimated break-even price for gas - 2016	Estimated oil production %	Estimated NGL production %	Estimated gas production %
Ultra Petroleum Corp.	UPL,+4.07%	$2.82	$2.76	7%	0%	93%
Gulfport Energy Corp.	GPOR,+1.51%	$2.99	$2.85	10%	15%	75%
Rice Energy Inc.	RICE,+3.99%	$3.22	$3.04	0%	1%	99%
Southwestern Energy Co.	SWN,+1.06%	$3.49	$3.36	1%	5%	93%
Chesapeake Energy Corp.	CHK,+1.62%	$4.75	$5.11	17%	10%	73%
PetroQuest Energy Inc.	PQ,+4.17%	$4.78	$4.94	8%	15%	76%
Source: Sterne Agee CRT

Ultra Petroleum Corp. heads the list, with an estimated break-even price for 2015 of $2.82/mcfe, but that is only slightly lower than the closing price of $2.91 for natural gas US:NGN15 for July delivery on Wednesday.

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Here’s the “combo” group with estimated break-even points for barrel-of-oil-equivalent prices in 2015 and 2016:

Company	Ticker	Estimated break-even price for oil - 2015	Estimated break-even price for oil - 2016	Estimated oil production %	Estimated NGL production %	Estimated gas production %
Gastar Exploration Inc.	GST,+10.37%	$24.20	$24.34	33%	20%	47%
Approach Resources Inc.	AREX,+9.22%	$31.81	$31.70	40%	29%	31%
Noble Energy Inc.	NBL,-2.61%	$38.18	$38.62	34%	11%	55%
QEP Resources Inc.	QEP,+3.14%	$39.73	$39.72	36%	8%	56%
Source: Sterne Agee CRT

Costs for oil compare very well to those of the “oily” group. However, this group’s exposure is mostly to gas.
Two companies covered by Sterne Agee CRT were excluded from these lists. Occidental Petroleum Corp. OXY, +0.84% reports unit costs that make a comparison difficult. And Viper Energy Partners LP VNOM, +6.15% is a master limited partnership.
[h=6]Putting it all together[/h]Stocks of some of the companies with the lowest estimated production costs are already too high for Rezvan to place “buy” ratings on them, so his most favored names may not necessarily be what you might expect based on the above cost estimates.
Sterne Agee CRT has “buy” ratings on 11 oil and gas production stocks. Here they are, ordered by 12-month implied upside potential:

Company	Ticker	Closing price - June 10	Sterne Agee CRT 12-month price target	Implied upside
Whiting Petroleum Corp.	WLL,+11.54%	$34.07	$52	53%
QEP Resources Inc.	QEP,+3.14%	$19.13	$28	46%
Oasis Petroleum Inc.	OAS,+8.21%	$17.47	$25	43%
Ultra Petroleum Corp.	UPL,+4.07%	$14.36	$20	39%
Gulfport Energy Corp.	GPOR,+1.51%	$44.46	$58	30%
Rice Energy Inc.	RICE,+3.99%	$23.05	$30	30%
Occidental Petroleum Corp.	OXY,+0.84%	$78.83	$94	19%
Callon Petroleum Co.	CPE,+2.69%	$8.56	$10	17%
Carrizon Oil & Gas Inc.	CRZO,+3.17%	$52.99	$55	4%
Diamondback Energy Inc.	FANG,+2.39%	$81.43	$84	3%
Energen Corp.	EGN,+2.50%	$73.03	$74	1%
Sources: Sterne Agee CRT, FactSet

Shares of Whiting Petroleum Corp. WLL, +11.54% are up only 3% this year. Still, Rezvan believes they can accelerate over the next 12 months because the company is “showing that impressive well-cost reductions are manifesting themselves in low F&D [finding and development] costs.