Posted by gray > 2016-01-24 21:43 | Report Abuse

I knw us has the largest oil. It has ban export for strategic reason. Now they r very confidence its just another commodities like palm oil.
They r selling to the whole world at mcdonald price.

Posted by Desa20201956 > 2016-01-24 21:43 | Report Abuse

oil gets cheaper
climate change gets faster

Posted by sunztzhe > 2016-01-24 21:44 | Report Abuse

When USA exports more and more Crude Oil in the future , the USD will strengthen. USD had a problem in the past because USA was importing almost all its crude oil needs and running huge trade deficits..so the USD weakened then.

Now USA had been producing shale oil aggressively over the past 10 years and the financial position of USA had improved and will improve further.

Posted by gray > 2016-01-24 21:46 | Report Abuse

All these r good news to usa but terrible news to msia.

Posted by sunztzhe > 2016-01-24 22:03 | Report Abuse

Refineries will be a better bet in a benign crude oil biz environment in Msia relative to the upstream sector especially so when there is readily available local captive market for the refined petrol, diesel ,lubricants etc.

SHELL and PETRONM will deliver better performance in the future relative to the upstream players. Their financial QR since beginning 2015 is already indicating this and I wont be surprised that once the QR for the 4th quarter 2015 is out by Feb 2016 , both will have PE below 10 based on its closing market price last Friday.

Posted by Annetan > 2016-01-24 22:55 | Report Abuse

If you say US has so much oil to sell to the world then it's not US's interest to keep oil prices low,isn't it?What's the pt of plenty to sell but the price is low and create high inflation that they have to increase rate aggressively which would cause market crash!They had been trying hard to have market up since so many yrs ago!

Posted by sunztzhe > 2016-01-24 23:40 | Report Abuse

It was Saudi Arabia who decided not to cut production n instead single handedly waged a war of attrition against the shale oil producers in USA by increasing more production n selling cheaper with the sole objective of killing off the shale oil producers.Saudi Arabia had not changed its stance since then.

Alan Greenspan when interviewed by Bloomberg TV in late 2014 foresaw the long term implications of Saudi's belligerent stance n stated then that this was the game changer to the Oil n Gas industry then. Since late 2014 the Crude Oil price had steadily plummeted.

Posted by Probability > 2016-01-24 23:41 | Report Abuse

goodpoint there Sunzthe...
Saudis has small brain but big ego..

Posted by sunztzhe > 2016-01-25 00:05 | Report Abuse

Saudi Arabia is a low cost producer..if not already the lowest cost producer by now. Saudi's game plan is to produce more crude oil at lower prices to kill off the Shale Oil producers and when supplies from the higher cost producers are knocked off because of a sustained low price biz environment and by then most surviving Oil majors had already cut CAPEX and had downsized. PETRONAS is going to downsize soon.

As you all know it takes time for oil majors, engineering coys to rehire, train new personnel, propose new CAPEX, get it approved, appoint engineering coys, award contracts to EPC, fabricate structures etc etc..It will take minimum time of 3 to 3.5 years to bring new fields into production.

So Saudi and its allies have a lead time of minimum 3 years to reap the financial windfall should crude oil demand spike up. I wont be surprised that they r also shorting the Crude Oil futures while selling at lower prices.

Saudi Arabia is now experiencing large fiscal deficits and large trade deficits and this situation is not sustainable. They may just depeg its currency against the USD to reduce its twin deficits and unleash another financial tsunami. So be prepared and be vigilant.

Posted by Annetan > 2016-01-25 08:35 | Report Abuse

One of the oil forum guys has just said Saudi agreed to cut production.Again how true the new is,we don't know.I am just saying whatever you see in the media and laid on the table,don't be too negative.Open your mind to possibilities and watch O&G stocks.Things could suddenly turn and you will just missed it. Even ClSA believes in feng Shui and gives out feng chart every yr without fail.There must be some degree of accuracy in it,otherwise why they spent money on it.You think cheap?Probably not.

Posted by sunztzhe > 2016-01-25 09:22 | Report Abuse

Well that was the expectation before the last OPEC meeting and Oil price meandered up in expectation but Saudi did not cut. Saudi kept on its game plan to knock off the higher cost producers mainly from USA.

The fundamental driver of Oil price is Supply vs Demand. Demand had not kept pace with the increase in supply. Moreover there is alternative energy source that will eat into crude oil market share over time particularly the petrol/diesel consumers such as cars.

US govt is giving good subsidy to promote Battery powered cars..heard that Tesla will come up with a new model at USD 30,000 per unit and it will outperform the performance cars.

Well it may be interesting to have alternative views from the feng shui angle but it is better to focus on the fundamental drivers for crude oil price (SUPPLY VS DEMAND) and the current/future potential trends that may dampen the DEMAND or SUPPLY of Crude Oil/petrol/diesel.

Posted by sunztzhe > 2016-01-25 09:31 | Report Abuse

Lets take a look into the decision to purchase Hybrid/battery powered cars. If crude oil price is high say USD 100/bbl, there will be enormous cost savings to motivate the car consumer to go for Hybrid or battery powered cars. If Oil price remain at USD 30/bbl to 40 USD/bbl then the cost savings may not be that significant and the new car consumer may not readily switch over to Hybrid/battery powered cars even though there is active govt subsidy.

Posted by sunztzhe > 2016-01-25 09:41 | Report Abuse

Lets take a look into the decision to purchase Hybrid/battery powered cars. If crude oil price is high say USD 100/bbl, there will be enormous cost savings to motivate the car consumer to go for Hybrid or battery powered cars. If Oil price remain at USD 30/bbl to 40 USD/bbl then the cost savings may not be that significant and the new car consumer may not readily switch over to Hybrid/battery powered cars even though there is active govt subsidy.

Do u think that Saudi Arabia as the major producer of Crude Oil is totally oblivious to the threats from alternative energy source to power cars that could potentially reduce demand for Crude Oil?

My wager is Saudi knows very well the threats from alternative energy source and their strategy is intentional in knocking off the US shale oil producers and to delay the switch over to alternative energy source for cars. As long as crude oil price is cheap at say USD 30 to 40/bbl, there will not be a powerful motivator for the car consumer to switch over to alternative energy power to power the cars unless the cost to produce hybrid/battery powered cars is as competitive if not lower cost than the petrol/diesel engine powered cars.

Posted by r°Moi > 2016-01-25 09:44 | Report Abuse

Beijing Shanghai.... are covered by thick smog everyday... the minute China made it compulsory for hybrid cars on the roads of its major cities.. demand will plummet.. so too the oil prices... naturally...of course

Posted by r°Moi > 2016-01-25 09:49 | Report Abuse

Climate change...

Climate change might just be the thing that do in fossil oils

Anyway... google... Global Appolo Programme to Combat Climate Change

And... DDPP

Posted by Lollipot Anison > 2016-01-25 10:53 | Report Abuse

no matter how I look at it.
oil has a sad outlook in next 2-3 years.
price may hover between 30-45 for long periods until the supply and demand re-balance.

it may rebound in short-term but long-term is just not good. my 2 cents

Posted by gray > 2016-01-25 10:59 | Report Abuse

Good analysis lolipot.
Widen the range 20-60 due to spikes in short n covered.

Posted by Desa20201956 > 2016-01-25 11:01 | Report Abuse

while you are at it, you should widen the range from zero to infinity....covers all possibilities.

<Widen the range 20-60 due to spikes in short n covered.>

Posted by Desa20201956 > 2016-01-25 11:03 | Report Abuse

no need wishy washy. Oil will close the year above $40....NEARER TO $50.

Posted by Annetan > 2016-01-25 11:06 | Report Abuse

Desa20201956,that is his view.You don't have to criticize ,you don't need to agree either.It's a guessing game after all only time will tell whether you view it correctly or not.

Posted by sunztzhe > 2016-01-25 11:23 | Report Abuse

Current rebound rally is due to covering of the massive shorts. Base on chart trends, it is a rebound off its low but NOT REVERSAL.

Fundamentals of Supply vs Demand has not changed. The high volume at low price indicate bottoming...looks like it will go into sideways consolidation after shorts had been covered and thereafter choose a future new direction.

Posted by Annetan > 2016-01-25 11:28 | Report Abuse

What price target would you consider a reversal?

Posted by Probability > 2016-01-25 11:29 | Report Abuse

has Iran started actively capturing the oil market? if not...I predict another short term dip..

Posted by gray > 2016-01-25 11:30 | Report Abuse

Iran hasnt shipped out a single barrel yet the whole world shout oil has bottom.

Posted by sunztzhe > 2016-01-25 11:37 | Report Abuse

Iran had been selling oil even during the embargo era...however all its pipelines are really old and need to be replaced to facilitate higher exports. Iran has Gas but no LNG technology..so it will invest in LNG technology and export OIL & LNG.

Posted by BeatIt > 2016-01-25 11:40 | Report Abuse

Market rallying now thanks to US blizzard. Yahhoo! Why la we holiday?!!
http://www.reuters.com/article/us-global-markets-idUSKCN0V2139

Posted by BeatIt > 2016-01-25 11:53 | Report Abuse

Annetan, if your FS Sifu predicts correctly that OnG will rally, then oil must go up. Oil up market will bull run.. But many psychology very funny ... For example, when a counter up, ppl will cheer to say it will continue up trend ( usually the opp. is true), and vice verse.

For in every yang there is a yin. In every yin there is yang... What goes up must come down, what goes down must go up... Took no? Heheheh...

Mere observer. :p

Posted by sunztzhe > 2016-01-25 11:58 | Report Abuse

Low Oil price for extended period of say 2-3 years is good for DOWNSTREAM players such as Oil refineries ie. PETRONM and SHELL...Both have shown earnings improvement since beginning 2015 but it is not good for UPSTREAM sector companies as majority have shown earnings decrease if not loss.

Posted by Annetan > 2016-01-25 12:35 | Report Abuse

Yes,that what he is saying.The thing is the whole is so bearish on oil and he didn't say rebound but flaming big bull market lead by oil and gas counters.For that to happen there must be something happening for the whole world to change it's outlook on oil price to have a bullrun.The fact he has not be wrong in such a major call like this keep me looking at oil and gas counters.In fact I kiasu and went it earlry which I cut it out but went in again the call warrants when oil was hitting ard $28 something which in my opinion is rather low already.Of course low can get lower,I didn't a lot at atime till I see a rebound in oil on Friday.

Posted by BeatIt > 2016-01-25 12:36 | Report Abuse

Today aro usd 32 lehhh...

Posted by Annetan > 2016-01-25 12:41 | Report Abuse

Oil is 32,37 yesterday's high is 32.62 and today is 32.42.Looks like ard 32.4 is quite a strong resistance which is ard the low in 2009.Not surprisingly since it moves from 27 somethhing in just a few days time

Posted by Desa20201956 > 2016-01-25 12:43 | Report Abuse

oil is grossly oversold.
no one has been able to tell me demand for oil has disappeared......not even China.

Posted by Annetan > 2016-01-25 12:48 | Report Abuse

Yes indeed it has but the fact people who long on oil due to oversold has been slapped with heavy losses hence you can see many are very skeptical on oil bottoming and wanting to short on a higher level which they believe will come down in a few days time.People who long also are very nervous.The move downwards and speed it does of oil future is probably one of the worst that I have ever seen in my lifetime since I started trading 1992!

Posted by Desa20201956 > 2016-01-25 12:56 | Report Abuse

doesn't matter. You are not a oil trader. doesn't affect you.
the only truth is Oil is grossly oversold.
whether your are chartists or fundamentalist and behaviourists....the only valid conclusion is Oil is grossly oversold.




<Yes indeed it has but the fact people who long on oil due to oversold has been slapped with heavy losses hence you can see many are very skeptical on oil bottoming and wanting to short on a higher level which they believe will come down in a few days time.People who long also are very nervous.The move downwards and speed it does of oil future is probably one of the worst that I have ever seen in my lifetime since I started trading 1992!>

Posted by gray > 2016-01-25 12:56 | Report Abuse

If shorty start shorting big at these 32 level. U can see 22-25 soon.
I donno if they r doing it. Need to watch few dwys.

Posted by Desa20201956 > 2016-01-25 12:59 | Report Abuse

doesn't really matter whether they short or not, whether oil go to $22 or not.......suffice to know it is at an unsustainably low price. ...no matter from whatever angle you look at it.


======Posted by gray > Jan 25, 2016 12:56 PM | Report Abuse

If shorty start shorting big at these 32 level. U can see 22-25 soon.
I donno if they r doing it. Need to watch few dwys.

Posted by coolinvestor > 2016-01-25 13:14 | Report Abuse

This up n down movements in oil is called noise. Unless u are an oil trader/ currency trader u will be very concerned. That is also if u short or long in very huge amounts for a short period of time..less than a day. This is your typical traders. Thriving on volatility.

I believe oil is also grossly oversold but this does not mean it will go up soon. Prices can be depressed due to sentiment factors or psychological factors..so it's just hard to tell!

Now is there's time to follow the true saying of buy low sell high.

I believe oil n gas sectors are depressed like hell now. So try to get one with good prospects n less debt. Now u may still see the prices still go lower that is noise n volatility..u can't get rid of it. U will need nerves of steel.

Posted by sunztzhe > 2016-01-25 13:17 | Report Abuse

Oil price most likely will oscillate between USD 20/bbl to USD 60/bbl over the next few years before it chose its new direction
- stay where it is
- go down further
- or go up

Those that believe that Oil price will recover and go up believe that China will continue to continually rise..

Those who are skeptical about oil price going up are indeed fearing China's continuing its continual fall...

Posted by Desa20201956 > 2016-01-25 13:19 | Report Abuse

perfectly agree with this para.

But....but you cannot hunt for OG counters yet....still too early....the co relation with oil price is not so direct, not so strong and not so immediate that you can profit from.


<Posted by coolinvestor > Jan 25, 2016 01:14 PM | Report Abuse

This up n down movements in oil is called noise. Unless u are an oil trader/ currency trader u will be very concerned. That is also if u short or long in very huge amounts for a short period of time..less than a day. This is your typical traders. Thriving on volatility. >

Posted by coolinvestor > 2016-01-25 13:20 | Report Abuse

Upstream downstream doesn't really matter for us unless u have an army of analysts at your side. Simple ppl like us try to look for opportunities n must grab it if it's there. Again buy at your own risk.

If u Dun even have the stomach to see your simple cash of 1000 lose half it's value..u just dun have the nerves of step to succeed. Then just dun buy n invest in properties n not shares

Posted by coolinvestor > 2016-01-25 13:28 | Report Abuse

Where oil prices go..its really hard to say lo. Tts why Warren Buffet also cepat buy a cheap asset refinery first.

Posted by Annetan > 2016-01-25 13:31 | Report Abuse

I totally agree with Coolinvestor,you need nerves of steel to be very successful in sharemarket investing.No matter how very cheap you buy in terms of fundamental valuation,you can still suffer losses.massive if you wallop.Character of a person is also important in share investing.Some people just cannot stomach too much losses and on thr other hand some people just have the nerves of steel.The latter who viewed it rightly are handsomely rewarded.

Posted by sunztzhe > 2016-01-25 13:39 | Report Abuse

If a refinery has
- good cost management
- a management culture that empowers productivity increase
- selling refined products with strong moat
- a readily available captive market to sell the refined products, no need to find new customers and incur incremental expenses
- forward PE in single digits
- prospect of low crude oil prices for extended periods of time

Why hesitate to buy? WB did not hesitate..He just made the decision to BUY!!!

Posted by Desa20201956 > 2016-01-25 14:09 | Report Abuse

Sun...America sells petrol at market....you sell at market price meh?

Posted by coolinvestor > 2016-01-25 14:22 | Report Abuse

I think dialog has a shared refinery in rapid pengerang...dunno share with who. And dunno refine what chemical

Posted by sunztzhe > 2016-01-25 22:25 | Report Abuse

http://www.investing.com/news/commodities-news/oil-prices-tumble-3-as-focus-shifts-back-to-global-supply-glut-381563

Crude Oil price is back to Fundamentals again of SUPPLY VS DEMAND after covering of the shorts. Renewed concerns on GLOBAL SUPPLY GLUT...AND... SLOWING GLOBAL DEMAND

Posted by sunztzhe > 2016-01-25 23:20 | Report Abuse

Oil dropped after Saudi Arabia, the world’s biggest crude exporter, said low prices won’t reduce its spending on energy projects and China’s diesel consumption dropped for a fourth consecutive month.

Futures dropped as much as 4.6 percent in New York. Saudi Arabian Oil Co., also known as Saudi Aramco, is maintaining its investment plans despite the rout in the crude market, Chairman Khalid Al-Falih said Monday. Diesel use in China dropped 5.6 percent in December compared with a year earlier and gasoline consumption grew at the slowest pace in more than two years.

Saudi Aramco is spending as much now as it did before the crash in crude prices, signaling no surrender in Saudi Arabia’s battle with rivals. It’s formulated a new strategy in response to cheaper crude, Al-Falih said at a conference in Riyadh. The state-run producer can sustain low oil prices for “a long, long time,” he said.

Posted by sunztzhe > 2016-01-25 23:45 | Report Abuse

Saudi Arabia being the lowest cost producer is waging war against the higher cost producers but this war of attrition will be long and protracted before Saudi Arabia emerge victorious. Saudi Arabia's shocking strategy is game changing to the Global Oil & Gas industry.

Meanwhile the other Oil majors will be under tremendous pressures to stay afloat let alone stay competitive and will resort to drastic cost cutting, cutting CAPEX, retrenching its workforce , re-strategize, restructure its business operations and/or downsize to lower its business operating costs. There will be some who could not hack it and they will go under.

At this moment none of the Oil Majors had gone bankrupt.Once that happens, we can safely say that Crude Oil price has bottomed.

Posted by Pavillion > 2016-01-26 07:58 | Report Abuse

Hi Sunztzhe, if you plan long on O&G i.e. buy during dips. Which stock do you recommend? i.e. one most unlikely go bust (avoid high gearing co..most of loan taken @USD100) and one which will recover weĺl. Tq.

Posted by sunztzhe > 2016-01-26 09:21 | Report Abuse

Hi Pavillion, Most Oil majors including PETRONAS are cutting CAPEX. So visibility is rather murky and most likely one can reasonably expect more earnings disappointment from players in the UPSTREAM sector especially those with high gearing. I will avoid upstream at the moment as crude oil is in process of bottoming and there is little visibility on how long this bottoming process will take. I will look at their cash position, cashflows, whether they continue to receive contracts but then again future cash flows may disappoint in an environment when CAPEX are being cut which leads to reduced earning and potential losses.

However the Refineries had turnaround since beginning 2015.Both are showing positive EPS as of YTD Q3R 2015. PETRONM and SHELL delivered cumulative Q3R 2015 of 75.7 cents/share and 85.1 cents/share respectively. Based on cumulative EPS , both companies are in single digit PEs.

The beneficiaries of low crude oil prices for an extended period will be refineries plus the export sectors on proviso that they are not near or fully valued