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2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance

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18030970 No.18030970 [Reply] [Original]

Do you think it's a good idea to buy stock in oil companies right around the time the nation wide quarantine is lifted?

My logic is
>oil stock goes down because everyone is staying inside
>oil prices shoot up once everyone starts driving again

>> No.18030988

>>18030970
Soon brother soon. The bleeding has only begun.

>> No.18032761

>>18030970
they droppedmainly due to russia/saudi price war

>> No.18032860

>>18032761
You sure it had nothing to do with the virtual halt of travel and non-trade transport?

>> No.18032964

>>18032860
Porque no los dos? Never let a good crisis go to waste

>> No.18032975

>>18030988
this but not soon
could be looking at a decades long decline in asset prices

>> No.18032977

>>18030970
then you're already to late. Buy before around the time the nation wide quarantine is lifted.

>> No.18033201

>>18030970
Yes, oil will never die. Never. Renewables will never compete against oil as long as America is suburban.

>> No.18033259

Pretty sure jet fuel has larger influence on crude oil than consumer gasoline but yeah thats the general idea.

>> No.18033280

>>18030970
GUSH calls

>> No.18033659

>>18033280
THIS

>> No.18033667

>>18032860
No. There was a lot of politics before this. The USA started becoming an exporter of oil products since forever ago. Russia/Saudis didn't like this so they "could not come to an agreement" right when the virus started to pick up in the states. Now American oil producers are shutting down and sending people home.

Long term oil should go back up to at least $40-50 since that's a not ideal but comfy spot for the two mentioned countries.

>>18033280
> He doesn't know.

Better sell soon anon.

>> No.18033796

>>18032860
There’s a demand crisis thrown on top of the price war, so yes

>> No.18033818

>>18030970
Just a reminder how to play oil during a time like this (March 23rd, 2020):

DO NOT:
>buy into 3x leveraged ETFs like GUSH (which reverse split today), OILU (delisted). You will lose money on decay if you hold long term. 3x are meant to be played on short term volatility. Right now almost all the 3x bullish directionals are subject to management issues, so avoid even playing them in the short term.
>invest in E&P companies. It is clear oil will rebound soon, but E&P companies will be the first to lose business. Because of this, E&P companies' stocks won't reflect the changes in the price of oil as well as others will.
>play any sort of options whatsoever on the above companies
>play short term options (in either directions), IV is extremely high and your premiums will get IV crushed over the next few months

DO:
>buy stock in well capitalized, integrated, oil companies that sit on a lot of cash. They are trading at a steep discount, and although dividends are sure to be cut soon, these companies can weather this storm for sure.
>buy long term call options (at least 2021) on oil funds whose holdings comprise entirely of futures contracts (ex. USO). There is risk of negative roll and contango and negative roll during times like these, but if you buy call options way out, you can shield yourself from these short term pains

>> No.18034216

Always do the opposite of biz

>> No.18034781

>>18033818
This.

Or just buy XLE.

>> No.18035107

>>18030970
Can we buy Venezuela using the petrocoin?

>> No.18035271
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18035271

>>18030970
NOPE.

you dumb low iq brainlets don't realize that this is the reset.

EVERY COMPANY is currently laying off, automatic, or home-working. THIS WILL NOT MAGICALLY DISAPPEAR IN 12 MONTHS, MORON.

These changes are HERE TO STAY. Oil will tank in the long term.

>> No.18035437

>>18033818
>buy stock in well capitalized, integrated, oil companies that sit on a lot of cash
which ones do you recommend?

>> No.18035505

>>18030970
Nah market will fall 80% before even remote chance of bottom in

>> No.18035659

>>18032964
This tbqh. One might even grow suspicious that the coronavirus is being hyped purposefully to further drive down the price so that the major banks invested in crude futures and storage can maximize long term profits.

>> No.18035780

>>18032977
fact

>> No.18035928
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18035928

I'm furloughed and quarantined. Two grocery stores within six blocks. Considering cancelling the car insurance if it looks like this will go on for awhile.

Point is, and it is entirely anecdotal, the one thing I will absolutely not need any of in the next month is oil, unless you're talking about it in the form of plastic on food and supplies.

>> No.18035981

>>18032977
You're delusional if you think the price of oil has anything to do with the amount of purchasing Americans are doing

>> No.18036135

>>18035659
Lol

>> No.18036259

>>18036135
You laugh but do you know who is highly invested in the oil futures and storage business and has been persistently expanding their storage infrastructure with low interest QE loans the last 10 years?

>The oil-storage trade, also referred to as contango, a market strategy in which large, often vertically-integrated oil companies purchase oil for immediate delivery and storage—when the price of oil is low— and hold it in storage until the price of oil increases. Investors bet on the future of oil prices through a financial instrument, oil futures in which they agree on a contract basis, to buy or sell oil at a set date in the future. Crude oil is stored in salt mines, tanks and oil tankers.[71]

>Investors can choose to take profits or losses prior to the oil-delivery date arrives. Or they can leave the contract in place and physical oil is "delivered on the set date" to an "officially designated delivery point", in the United States, that is usually Cushing, Oklahoma. When delivery dates approach, they close out existing contracts and sell new ones for future delivery of the same oil. The oil never moves out of storage. If the forward market is in "contango"—the forward price is higher than the current spot price—the strategy is very successful.

>Scandinavian Tank Storage AB and its founder Lars Jacobsson introduced the concept on the market in early 1990.[72] But it was in 2007 through 2009 the oil storage trade expanded,[73] with many participants—including Wall Street giants, such as Morgan Stanley, Goldman Sachs, and Citicorp—turning sizeable profits simply by sitting on tanks of oil.[74] By May 2007 Cushing's inventory fell by nearly 35% as the oil-storage trade heated up.[74]

We're not talking individual whales here anon we're talking "too big to fail" tier titans who can bend markets to their will.

>> No.18036299

>>18035928
It's about the futures and the storage and the fact that we're reaching peak oil. Lol cars don't even drive demand for oil at all its a tiny minority of total consumption. Even if we all go "green" all those industries will still be underpinned by the oil logistics infrastructure for the foreseeable future.

>> No.18036313

>>18035271
I'd like to know more about her.

>> No.18036427

>>18035271
Miam !

Source ?

>> No.18036490

>>18033667
I agree partly but aren't they just dick waving at each other since the OPEC negotiations broke down and the Saudis are trying to crush prices below Russia threshold

>> No.18036535

wait till covid19 is almost finished and watch the iron russia oil war news

>> No.18036553

>>18035437
the companies in the op