Posted by calvintaneng > 2016-01-24 14:07 | Report Abuse

Crude Oil Prices Will remain subdued from Oil Glut. Impending release of Iranian Oil into world markets will further weaken oil price.

As such all OSV Players and Upstream Oil Companies will be further impacted.

The Big Beneficiary will be downstream Oil Processors and Especially Oil Refineries like PetronM & Shell. Both their shares have already run up (So please don't chase now!) Warren Buffet is buying Oil Refinery Phillips 66 for the same reason.

The Best Beneficiary from low crude oil will be MPHBCAPITAL.

Why MPHBCAPITAL?

Answer:

MPHBCAPITAL HAS 1,800 ACRES OF PRIME LANDS JUST BESIDE RAPID

Petronas' RAPID IS A 10 KILOMETER LONG COMPLEX OF OIL REFINERY, ONE OF THE LARGEST IN THE WORLD. And MPHBCAPITAL Is Just Beside It.

Posted by calvintaneng > 2016-01-24 14:17 | Report Abuse

See

MUKESH AMBANI's Wealth Grew The Most In The World As Oil Price's Plunged. Ambani is the Owner of A Big Oil Refinery in India.

www.livemint.Com/Companies/+YyNOfs3gC0z8ELa0YW3jM/Mukesh-Ambanis-Reliance-is-gaining-from-30-oil-price.html/

Posted by Annetan > 2016-01-24 14:56 | Report Abuse

Calvin,after reading so many of your comments and articles,I must say you are really a very knowledgeable man.I begin to respect you and though some calls you made,price went down,to me is not that you made a wrong call.You are a fundamentalist as even Warren Buffet suffers paper loss of up to 50%,lol!Your view is oil prices will remain subdue due to oversupply,I am wondering what would happen to make the one geng feng shui master to say oil and gas stocks will rebound from it's trough to a big change and entering into a big flaming bull market.Sometimes it's an abstract we layman can't see.

Posted by Annetan > 2016-01-24 15:01 | Report Abuse

Oh btw,in sept 1998 he said sudden change,one will never expect Datuk Anwar sacked as deputy PM and put in jail!

Posted by calvintaneng > 2016-01-24 15:33 | Report Abuse

Good afternoon Annetan,

We must See the macro picture first, then only the micro picture.

The Macro picture for Malaysia is now in a continual contraction.

When both Crude oil & Palm oil revenue fell drastically Pm Najib implemented GST at 6% to save the Malaysian Economy. This burden of 6% consumption tax is having a drag on consumer spending - so all businesses will be impacted directly or indirectly. That was when Crude Oil fell from US$120 barrel to US$60 a barrel. And the Malaysian budget was based on Crude oil hovering around US$50 to US$60 a barrel.

Businesses will have to rely on Govt pump priming.

Since then Crude Oil fell another 50% from US$60 to US$30 & Govt has to revised downward its expenditure due to even less revenue. (This round GST cannot be increased further as the rakyat are already over burdened.)

In many areas budget will be reduced further. One patient could only get her medicine in small quantity as Govt hospital and clinic now don't have extra cash.This shows that All Malaysian Businesses Will Continue to shrink and shrink in both revenue and profit.

This bleak macro scenario will result in at least 80% of Malaysian stocks going down in unison. The "other" 20% will be those stocks which have resilient nature; those with recession proof abilities and defensive capabilities.

We must find these stocks to invest to "protect our wealth" and also hopefully grow in these difficult environments.

For year 2016 the need to pick the correct sectors and stocks will be very crucial.

Try to keep more Cash. I think the days, months ahead will present great buying opportunities.

Posted by orlandooil > 2016-01-24 15:44 | Report Abuse

calvintaneng bought Armada at 1.30+, calvin stil holding?

Posted by orlandooil > 2016-01-24 15:47 | Report Abuse

Armada upstream or downstream calvin?

Posted by calvintaneng > 2016-01-24 15:49 | Report Abuse

Orlandooil,

No. I have cut loss in most O&G counters except Waseong. Waseong owns a lot of IGB shares. I plan to buy more Waseong if it touches 50 cents. And I am also watching all O&G counters. As Crude Oil is cyclical it will yet see the light of day in future.

Posted by Annetan > 2016-01-24 15:52 | Report Abuse

Thank you,Calvin for the lengthy explanation.How do you see Engtex?

Posted by orlandooil > 2016-01-24 15:52 | Report Abuse

Go for u

Will it be a long wait or short wait? Medium wait?

Posted by calvintaneng > 2016-01-24 16:02 | Report Abuse

Annetan,

Engtex is ok due to replacement of Old Water pipes. I bought Engtex at 90 cents before it doubled and split. So I have taken profit already.

Orlandooil,

I wish I know the correct timing. Since we cannot tell the future exactly just buy when things are selling at bargain basement prices.

And always go defensive and diversify.

Once you find a value buy don't be afraid to average down slowly.

As for Armada it is Offshore Support Company - so it is more upstream.

But as of now I don't see any reason to buy upstream O&G stocks yet. I think the first sign to SEE will be those shale oil cowboys going bankrupt one by one in North Dakota. After that All US Banks with exposure to Shale Oil will also go belly up.

Posted by orlandooil > 2016-01-24 16:07 | Report Abuse

Calvin yes that seem to b d worries

But WB is investing like d shale people will b d suppliers of his refinery's throughput so shale oil may not kaput so easy

Posted by calvintaneng > 2016-01-24 16:18 | Report Abuse

Orlandooil,

Warren is one very smart fella. His Wells Fargo Bank has big exposure to Shale Oil.

He is balancing his risk by putting more money into Phillips 66.

If Crude Oil continues to hover between US$30 to US$40 more than 70% of Shale Oil Drillers will continue to suffer because their cost of production is around US$50 a barrel. The cost in Saudi Arabia is below US$20. The Saudis can survive. But the Saudis have overspent during boom times. They have air conditioned flower and fruit garden & such extravagant stuff. So they need Crude Oil to be at US$80 to balance their budget. If crude stays low for an extended period of more than 3 or 4 years the Saudis will also go bankrupt. So no oil producers want price war to last too long.

Posted by Annetan > 2016-01-24 16:33 | Report Abuse

Perhaps oil prices hitting this level is US doing so they thought would kill Putin first.It could be hidden political moves but ultimately if it doesn't kill Putin but instead of it's own people,they could change strategy,lol

Posted by Annetan > 2016-01-24 17:26 | Report Abuse

http://www.bloomberg.com/news/articles/2016-01-22/oil-is-trade-of-the-year-for-citigroup-after-iran-export-surge

Posted by sunztzhe > 2016-01-24 20:40 | Report Abuse

Russia is sitting pretty...its main export is GAS to EUROPE and it has the leverage over Europe as the sole supplier.It had reduced budget deficit and is in trade surplus. Saudi is running large current account deficit and large fiscal deficit and its not sustainable in the medium to long term. Saudi could potentially depeg its Currency against the USD and cause another financial meltdown.

Posted by Annetan > 2016-01-24 21:05 | Report Abuse

As I mentioned earlier according to Jim Paulsen ,normally oil plunge from history cause US economy to recover strongly and core inflation rises instead of coming down and they have to raise interest rates after that.25 basis pt already cause havoc to the world stock market including US and from the past yrs,you can see US just wants their stock market to go up hence perhaps they are pushing it back up again.This geng feng shui master is forecasting a flaming big bull market lead by oil and gas stocks for 2016 and they will rebound from it's trough to a big change.So far following him since 1997 he has never gone wrong on forecast like that hence it's something we have to watch out.It's an abstract we layman cannot see.How did oil go from $10 to $147 in the 1st place?It's something unthinkable ,right?When it was $147,golman sach said it's going to $200! WHo foresee it's going to hit $27.5 in a fews yrs time?When they want to push to that level,they will justify with whatever they can think of ,so is in the bear market.I believe every market(whatever tradeable) is manipulated by the big boys.When prices come down to certain level,one must not listen too much nor take seriously what is published,Remember media is used as a tool by big boys to flash out the weak holders.

Posted by duncan2 > 2016-01-24 21:10 | Report Abuse

hi calvin, which o&g counter best to invest now ? because we r not god therefore we wont know when will be lowest. as long as we got it close to the lowest that would be enough. of course we can buy littlw bit first slowly top up more when it goes lower. Any good undervalue oil counter which you think can be easily go up when oil started to rebound? thanks in advance..

Btw, are you still in jb?

Posted by Annetan > 2016-01-24 21:12 | Report Abuse

BTW,US still wants very much to be "Tai kor"! They can't afford to let US currency runs otherwise their technically bankrupt is confirmed officially PN4 already! WHich country in this world who borrows so much still can fetch so high value for their currency?Only US!

Posted by sunztzhe > 2016-01-24 21:30 | Report Abuse

Congress approved USA to export Crude Oil. Iran will soon export Crude Oil but Global demand had not increased to match the increase in supply.

Fossil fuel consuming Equipment are getting more fuel efficient and consuming less petrol/diesel.Largest consumer of petrol and diesel are cars, trucks, earth moving equipment, ships etc.

Hybrids and battery powered cars are making inroads into the traditional market of petrol and diesel.Renewable energy had gained market share against fossil fuel energy. Gas will also eat into petrol/diesel market share.

So how can crude oil price rise to USD 100? Most likely it will hover around USD 40-50 when the high cost producers drops off arising from a sustained period of low crude oil price around USD 25 to USD 35 per bbl.

Lets look at the reported earnings since beginning 2015 from upstream players and downstream player such as refineries in Malaysia, PETRONM and SHELL. Bursa announcement of reported QR had shown that majority of UPSTREAM players had decreasing QR earnings since beginning 2015 whereas downstream players such as Refineries had shown improvement in earnings.

Posted by gray > 2016-01-24 21:36 | Report Abuse

Cant see why oil can go back above 60 in my lifetime...

Posted by sunztzhe > 2016-01-24 21:38 | Report Abuse

USA has easily 2X Reserves of Crude Oil over Saudi reserves. So the Tai Kor for Crude Oil is USA..NOT SAUDI ARABIA...

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.