Energy Sector

[Gregmal]

3 minutes ago, fareastwarriors said:

 

I think you said this many times in one way or another, you just to have take advantage of the situation that is here and make some easy money off this foolishness. 

 

Sorry it's not  as eloquent as you would put it !

Call options right all the wrongs in the world LOL if they don’t, try puts!

[patience_and_focus]

On 1/4/2022 at 10:45 AM, rkbabang said:

 

 

It depends on the people.  Californians seem to be happy with rolling blackouts on hot days.  I don't see anyone screaming for nuclear plants there.  It seems that people will happily sit in the dark and sweat(or freeze depending on location), before they will change their minds.  Reminds me of the old joke: What did socialists use before candles?  Electricity.

 

 

You mean like this -

 

https://en.wikipedia.org/wiki/2021_Texas_power_crisis

 

 

[Ulti]

I've agreed with below for a long time; which is why I'm cautious about new domestic drilling. As an aside, I'm more attracted to companies like CTRA; clean balance sheet, lots of reserves and for now

a constraint on capital expenditures, new drilling and acquisitions.

 

 

Munger in 2013

il is absolutely certain to become incredibly short in supply and very high priced .. The imported oil is not your enemy, it's your friend. Every barrel that you use up that comes from somebody else is a barrel of your precious oil which you're going to need to feed your people and maintain your civilization. And what responsible people do with a Confucian ethos is suffer now to benefit themselves and their families and their countrymen later. The way to do that is to go very slow in producing domestic oil and not mind at all if we pay prices that look ruinous for foreign oil. It's going to get way worse later ...

The oil in the ground that you're not producing is a national treasure ... It's not at all clear that there's any substitute [for hydrocarbons]. When the hydrocarbons are gone, I don't think the chemists are going to be able to just mix up a vat and create more hydrocarbons. It's conceivable that they could, I suppose, but it's not the way to bet. We should spend no attention to these silly economists and these silly politicians that tell us to become energy independent.

 

 

 

[Gregmal]

9 minutes ago, patience_and_focus said:

 

You mean like this -

 

https://en.wikipedia.org/wiki/2021_Texas_power_crisis

 

 

That’s the thing, even in states that have it somewhat right, the infrastructure is shot. There is really not a fix for the short term so you’re going to eventually see panic and more speculation and prices today will seem tame.

[fareastwarriors]

We didn't stop producing

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

 

 

 

 

 

Edited March 2, 2022 by fareastwarriors

[rkbabang]

 

41 minutes ago, patience_and_focus said:

 

You mean like this -

 

https://en.wikipedia.org/wiki/2021_Texas_power_crisis

 

 

 

Grid problem.  It doesn't really matter what is generating the electricity if the geniuses who design/maintain/regulate the grid don't think they ever have to worry about occasional cold weather.  If the electrical system was designed rationally from the ground up today there would be a small nuclear facility (or three) in every city/town and would only tap the grid for unforeseen emergencies.  No failure could wipe out a whole state or region.  Of course that isn't what we have.  You take out the grid, you take out enormous regions and leave huge populations without power.

 

[Gregmal]

38 minutes ago, fareastwarriors said:

We didn't stop producing

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

 

 

 

 

 

Listen to the E&P companies. Ive heard now several calls where theyre all saying the same thing. Big oil is not budging. Theyre paying down debt, issuing dividends, and buying back stock. They arent really interesting in new drilling right now. People see that, and its why the futures markets were woefully confused all of last year. 

[Gregmal]

Look what happened in housing. Its not necessarily whats going on right now. Its what is the gameplan for the future. And with O&G in USA we have surging demand and...well, eventually those wells that are producing right now won't and if you aint encouraging the E&Ps to do their thing...youre gonna have problems. Or I guess we'll all just ride around on electric scooters...

[KJP]

I've also heard the hesitancy among public E&Ps.   On the other hand, oil futures are in pretty steep backwardation (April 2022 $110, January 2023 $85) and rig counts are steadily increasing, though still below 2019:  https://www.investing.com/economic-calendar/baker-hughes-u.s.-rig-count-1652

[Spekulatius]

I think it's cringeworthy when people buy a truck that gets 12 miles/ gallon and then complain about high gas prices. If you have a car that gets 30-40 miles/gallon, the gas prices can go wherever they want and  it doesn't matter. Those cars are also cheaper.

[rkbabang]

1 minute ago, Spekulatius said:

I think it's cringeworthy when people buy a truck that gets 12 miles/ gallon and then complain about high gas prices. If you have a car that gets 30-40 miles/gallon, the gas prices can go wherever they want and  it doesn't matter. Those cars are also cheaper.

 

People have boats, campers, trailers, large families, etc.  Where is the car that tows 9000lbs, carries 7 people + cargo for a vacation, and gets 40 miles/gallon?

 

[KJP]

7 minutes ago, KJP said:

I've also heard the hesitancy among public E&Ps.   On the other hand, oil futures are in pretty steep backwardation (April 2022 $110, January 2023 $85) and rig counts are steadily increasing, though still below 2019:  https://www.investing.com/economic-calendar/baker-hughes-u.s.-rig-count-1652

 

Midstream, e.g., Williams, Enterprise Products Partners, also doing very well, which also suggests some bullishness on US oil & gas production growth.

[Spekulatius]

2 minutes ago, rkbabang said:

 

People have boats, campers, trailers, large families, etc.  Where is the car that tows 9000lbs, carries 7 people + cargo for a vacation, and gets 40 miles/gallon?

 

This is true, but those trucks are largely used for other purposes and people commute in them. FWIW, I bet you can tow a boat with a Mercedes diesel car. They do it in Europe. Same with trailers.

Also, all those things are big energy sucks by themselves. Instead of trailer one can do camping. There are substitutes for most things that require much less energy.

[fareastwarriors]

3 minutes ago, rkbabang said:

 

People have boats, campers, trailers, large families, etc.  Where is the car that tows 9000lbs, carries 7 people + cargo for a vacation, and gets 40 miles/gallon?

 

 

Many don't have those toys or big families. And most people in our suburbs have 2 or 3 cars anyways.  I get your sentiment but we all know the truth is somewhere in the middle. 

 

[fareastwarriors]

4 minutes ago, KJP said:

 

Midstream, e.g., Williams, Enterprise Products Partners, also doing very well, which also suggests some bullishness on US oil & gas production growth.

 

Sustained high prices will on more exploration and eventual production. A company can only stay disciplined for so long before they see other companies get rewarded with "growth."

[Gregmal]

7 minutes ago, KJP said:

 

Midstream, e.g., Williams, Enterprise Products Partners, also doing very well, which also suggests some bullishness on US oil & gas production growth.

It’s not just cars is right. Like I said earlier heating oil for homes? We typically fill the 550 gallon twice per year and that’s basically part time considering we spend 2 months in Florida during peak winter. Of course we are lucky. But 550 x 2 fills. Last year average price 2.15 now today it’s $4. That’s $2,000 extra a year not including the cars which for a family of average means…..definitely not irrelevant 

 

edit: meant to quote @rkbabang but quoted @KJP

Edited March 2, 2022 by Gregmal

[rkbabang]

The truth is always somewhere in the middle.  If you tow only a few times per year you need the bigger vehicle, but gas prices would have to be tremendously high to justify having a second vehicle for commuting/everyday travel.  There is the purchase price + maintenance + insurance + registration + additional taxes in many states.  High gas prices sucks for a lot of people.  I don't think it is appropriate to dismiss them as whiners who made poor vehicle purchase decisions.  Also, not everyone is driving a new vehicle purchased this year, many people purchased their vehicles when gas prices were lower and it made sense.

[fareastwarriors]

6 minutes ago, Gregmal said:

It’s not just cars is right. Like I said earlier heating oil for homes? We typically fill the 550 gallon twice per year and that’s basically part time considering we spend 2 months in Florida during peak winter. Of course we are lucky. But 550 x 2 fills. Last year average price 2.15 now today it’s $4. That’s $2,000 extra a year not including the cars which for a family of average means…..definitely not irrelevant 

 

 They should move to the Sun Belt. I heard it's quite warm and nice.

[Gregmal]

Haha. Yea I’m working on 30 acres in St Johns County right now. St Augustine area is beautiful.  Buy, wait, build. Then get a vacation house in JOE territory. No more heating oil. Problem solved 

[Spekulatius]

26 minutes ago, rkbabang said:

The truth is always somewhere in the middle.  If you tow only a few times per year you need the bigger vehicle, but gas prices would have to be tremendously high to justify having a second vehicle for commuting/everyday travel.  There is the purchase price + maintenance + insurance + registration + additional taxes in many states.  High gas prices sucks for a lot of people.  I don't think it is appropriate to dismiss them as whiners who made poor vehicle purchase decisions.  Also, not everyone is driving a new vehicle purchased this year, many people purchased their vehicles when gas prices were lower and it made sense.

Its always in the middle. I do have a particular friend in mind  from town ( not on this board) who complained about high gas prices when we met for some drinks lately. He just bought a lake house in NH  (second home, heated with oil), a 150 HP  Polaris snowmobile, a smaller one for his wife, an off road buggy that is larger than my car  and of course a huge truck to haul all this around. Now he is looking at buying a boat in spring because why have a lake house, if you don't have a boat?

 

This is all nice stuff, and he can afford it, but really complaining about high gas prices in this situation? I told him his carbon footprint is perhaps bigger than Al Gores :-). I guess I just like to travel lighter, but each it's own.

Edited March 2, 2022 by Spekulatius

[rkbabang]

1 minute ago, Spekulatius said:

Its always in the middle. I do have a particular friend in mind  from town ( not on this board) who complained about high gas prices when we met. He just bought a lake house in NH  (second home, heated with oil), a 150 HP  Polaris snowmobile, a smaller one for his wife, an off road buggy that is larger than my car  and of course a huge truck to haul all this around. Now he is looking at buying a boat in spring because why have a lake house, if you don't have a boat?

 

This is all nice stuff, and he can afford it, but really complaining about high gas prices in this situation? I told him his carbon footprint is perhaps bigger than Al Gores :-). I guess I just like to travel lighter, but each it's own.

 

Sounds like me (although I don't have snow mobiles or off road buggys).   It isn't like you can buy a lakehouse in NH that isn't heated with oil, and I agree with him, what is the point of a lakehouse if you don't have a boat?

 

[Spekulatius]

Just now, rkbabang said:

 

Sounds like me (although I don't have snow mobiles or off road buggys).   It isn't like you can buy a lakehouse in NH that isn't heated with oil, and I agree with him, what is the point of a lakehouse if you don't have a boat?

 

I guess one thing just leads to another. I hope to get a ride in the buggy this summer, that's all.

[JRM]

And who says politics and investing don't mix?  Energy and metals have been one of the best setups going into 2022 because of half-baked policies, ESG virtue signaling, and general ignorance by the "smart money".  What's going on in Russia just pulled things forward a bit.  It was an inevitability.

 

I often question whether or not I have any business investing my own money, then I read some of the takes on twitter by the "smart money" and think, holy s&*t, these guys have no idea.

 

And no, I don't hate the environment.  Banning plastic straws and driving $100k golf carts isn't going to save us.

[Gregmal]

My wife the other day was like “isn’t this awful. How high do you think things go?”. And I just thought “not if you own call options”. As we blast through a family road trip encompassing the entire southeast and meander back to NJ. Probably did 3,000 miles of driving the past couple months. Cheap hotels were like $350 a night and in some areas triple that. Inflation made it cost way more than the year before. But “spend” as a percentage of worth declined significantly. And that’s the thing, writings been on the wall long enough for people to murder this trade. If you’re not even benefitting from higher energy and inflation you’re doing it wrong. 

[SharperDingaan]

We used to be mocked by those in love with their Ford 150, 250, etc. - primarily because we prefer the zip of the Mini (Baby BMW), and now the hybrid. Many of the folks who own those 150's, also own variable mortgages, and their overall costs (inflation) are  now escalating by at least $100/month - each and every month. 

 

They knew they were taking a risk, but the money was good! and the risk? ... far away, and remote! But if enough people were 'wrong' at the same time, it really wasn't going to be 'their' problem anymore - it was going to be 'ours'. Welcome to poor mans moral hazard !

 

Obviously, if you took precautions, you're going to do very well; whereas those 'others' ... not so much.

Just keep in mind that it's not a lot of fun when you're making a killing, and your neighbors are losing their homes to their new inability to make ends meet. 

 

Everyone has to live somewhere, but to keep your wealth - others have to allow it.

'Gated Community' is just the pretty word for 'compound' ... otherwise known as a 'gilded cage'

 

SD