discussed with this group!
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
This is not a sell off... it is a scare off by market manipulators. Just because Tidewater lost 9 million dollars last quarter is no reason to throw the baby out with the bathwater.
On the bright side, this red ink in oil service sector is good because it washes out all the weak shares and give long term players a chance to load up.
Notice that there is very little volume. This tiny sell off will turn around in less than 2 hours. Maybe it's a Barron's bullsh_t tactic just to give their shorts a chance to reverse.
WHAT A BUNCH OF BULLSH_T.
I've never seen more crapola coming out of Barrons then we are seeing today. They are YELLING sell sell sell offshore drillers, including SDRL. They should be charged with market manipulation for pumping out such garbage. Where is the FTC when you need them?
Crude oil in moving down on the increase in the value of the dollar. Traders are reading this all wrong. They are selling drillers when they should be buying. Here's why: anytime crude oil prices move on a change in the value of the dollar, it is a reflection on the currency, not the value of crude.
Traders will realize they made a mistake to sell at a time like this. I say prices will recover by Thursday noon.
Don't sell... buy all you can afford.
Anybody got any good ideas why the short ratio is still 30%?
I can't figure it out. What does this 30% believe is about to happen?
Could there be some sort of hedge or arbitrage?
I think WTI is gonna trade sideways for awhile, but it still don't explain why 30% on the shares are short.
Trading drillers while relying on technical charts is like driving your car forward at a high speed while watching the road in your rearview mirror.
When it comes to the oil service sector, especially the drillers, throw the charts away. Pay attention to supply versus demand. Look hard and long at management, the drilling fleet, and the balance sheet. Try to imagine how the world economy will be in the next few years. Ask when will the excessive rigs be scrapped? When will the demand for rigs exceed the availability? Will the Artic and the Antarctic ever be opened for drilling? When will we see peak oil? When will production match demand? When will the extra crude now in storage be removed? Is the world moving away from crude towards natural gas? And about a thousand more question.
None of these answers can be found studying past performance charts. Charts are excellent for manufacturing, but worthless for oil service companies.
I see nothing going forward that leads me to believe that WTI will stay much above $60 until mid-2016. The world economy sucks. Supply is in excess. Demand is not rising. OPEC pledges not to regulate supply.
With no one is willing to cut back, the only regulation of supply is price governed by demand. Such a scheme will cause prices to stay right where they are until demand exceeds supply. Only demand can cause prices to rise and then only until excess supply lowers them back down again. In other words, we are entering a new era when prices will bounce up and down like a cheap Chinese yo-yo.
Oil service investors need to reassess the tools they use for making trading decisions. Best bet is to throw the technical charts in the garbage and stick to the fundamentals.
As far the present, it looks like a lot of new blood wants to get into the oil service sector before share price rises much higher. This new blood will hang around a few months, get disappointed and then run back to their old favorite stocks.
Don't be surprised if WTI drops back to $50 and SDRL to $11.
I told you a few weeks ago that there was a big problem with WTI over $60 while US crude storage was at an 80 year high. I'll tell you one more time. There is a different ball game going on today than there was 10-20 years ago.
There’s a worldwide crude oil surplus of 1.5 million barrels per day. The IEA (International Energy Agency) projects a surplus of 3.2 million barrels per day in April 2015 compared to previous years. No telling which way to projected surplus will go in May, June, July, and August.
Oil production from OPEC, Russia, Brazil, China, Vietnam, and Malaysia will continue to rise in 2015 and 2016. This means the oil glut is just not starting, and will get a lot worse.
God only knows how many barrels are stored in tankers around the world waiting on a price increase that will never come. The oil will have to be dumped at a loss soon.
We might be stuck with $65 crude for the next 20 years. We will never see $100 crude again.
The Saudis figure that the use of natural gas, wind, solar, battery technology and etc will soon make crude oil as obsolete as coal. In other words, long before we run out of crude, crude demand worldwide will be cut to less than 5 million barrels per day. That's the real reason the Saudis are pumping and drilling like crazy. That's the "market share" they want. They want to make sure to pump as much oil out of the ground as they can before demand cuts the prices back to $40.
Be careful in this market.
I did not say the Saudis were hurting... far from it.
I think the Saudis told the truth. They wanted to stop investment money from flowing into fracking and put US tight oil producers out of business because the US was no longer buying as much oil from them as before. They wanted to protect their US market share--the strongest market in the world.
Now what they gonna do. They cut the price of crude in half and lost BILLIONS. But they did not stop the tight oil producers and will never stop them unless they run crude down to $30. Everybody knows they screwed up; so does the new King which is why he replaced the old oil minister with a new one.
But I don't think the new King wants to piss the US off too much with all the problems in Yemen. I also think the new oil minister is working on the QT to stop any agreement with Iran. Iran could cut into the Saudis quota and hurt them really bad.
I don't think the fat lady has had a chance to sing yet.
Trade easy...
The USA consumes 19 million per day, produce 9 million per day and imports the rest, much of it coming from Canada, Mexico, and other countries.
Of the 9 million barrels per day the US produces, ~5 million barrels of crude have been stored almost every week for the last 4-5 months. The US is producing more "sweet" crude than refineries wanted to buy. If sweet WTI holds at $60, tight sweet will start flowing again and the extra barrels will go into storage. But storage tanks are near maximum capacity so sweet WTI must drop in price if producers expect refineries to buy it. The Saudis are pumping all they can in an effort to cause Brent to drop.
They never accomplished their original goal of putting US tight oil out of business. Their only action now is to either surrender and cut production or keep pumping in hopes prices fall back closer to $40.
I think the Saudis screwed up by not cutting in 2014. The only thing they have accomplished is to lose billions in oil revenue.
I'm stumped. I've been through 2 other downturns, neither of them like this one.
WTI at $60 is going to result in an increase in production by small producers who are desperate from cash. More US production will lead to an increase in crude going into storage tanks. WTI will drop back to $50.
The only way out of the current oversupply is a booming demand, which will not come until July/August.
As far as offshore drillers, I think we are one year away from a time when day rates start increasing.
Enjoy the ride....
volume and price up sharply is spite of downgrades. Looks like we are finally removing a few shorts. There might be a lot more shorts to take out so watch for a squeeze.
I like the move this morning; SDRL gets downgraded by two brokerage houses, and then the stock dives. It then shoots up and hour after the open when the clients of the two outfits start buying in. What a head fake.
Looks like the market don't like the new CEO.
I knew RIG wasn't gonna hold, but I did not believe it would give back $2. I'm sure glad I sold out. But I'm back long now and ready for a second run at $20.
why is SDRL taking a beating today?
great article... a deal is the only way crude is going to get back to $80 - $100 range.
I'm day-trading; closing out every night. I'm nervous about everyone wanting to pump as much crude as they can. I've lost the faith that WTI will get much higher than about $60 before the end of 2015. With OPEC no longer trying to balance supply, we may be in for 2-3 years of volatility before we see WTI at $70. I don't think we'll ever see $100 again. Even $90 seems like a longshot. $70 might even be the new norm.
My price target for RIG at the end of 2015 in now $22 to $25.
I see day-trading as my best gamble for the next few months.
girlfriend, at one point in time, hopefully very soon, you will see RIG volume slowing increasing, hitting 15+ million shares every day. This signals two things: (a) shorts reversing themselves and buyers accumulation a position which they intend to hold for the long pull. That's the signal I'm waiting for.
I was hoping that RIG would at least show some high volume days. And, I am disappointed to see the stock track crude prices so close. One would think this stock would move up to $18 -$19 range on high volume. But it ain't happening. Volume is low. Which tells me that there no great rush to get in at these bargain prices. It seems like the stock is just drifting along at a slow pace with no sense of direction. Frankly, unless volume increase, I don't think RIG can hold $16. Where is the bottom? Is crude gonna take another dive back to $44?
We.re stuck in a rut. Crude is at a price where trading firms have to think long and hard about paying a higher price per barrel. And, if crude don't go up, RIG buyers are not going to pay anymore than $16 to $17. On top of this gloom and doom, the shorts are pumping propaganda about all the extra crude everyone is pumping and the limited storage space. We don't hear a dang word about demand increasing. Volume is also down 30% lately.
All this may be why the shorts are holding firm.
Anyway, I bailed out completely Friday. I'm going to daytrade this puppy until the fundamentals improve a little.
active rigs down 42 units for the week. WTI will bounce up a little.
watch for the news on the rig count coming out in about 15 minutes. This number can move the stock up or down.
we need volume. crude is pressing against a strong resistance. I don't think we gonna get our squeeze until we hit $19 or higher with volume over 25 million for 2 days running.
crude is not going to go straight up. We're gonna get days when WTI will consolidate and build a base. Then will get days when WTI jumps 3%. My call is that we hit $60 by May 1st. And RIG will be selling for $20.
And no need to worry about Iran. That Iran can cause WTI to fall $15.00 is pure bullshit spread by the shorts--don't buy in to it.
First and foremost, the idea that Iran has 30 million barrels of stored crude is a complete joke. It would be crazy to store 30 million barrels in Iran with the unstable middle east. Iran has already been selling crude on the black market and off the books. Another problem is that it will take them two years to crank up production. They're part of OPEC so will need to work out their quota. The Saudis and other OPEC members are the ones who will suffer the most. The Saudis are the 800 pound gorilla of oil production. They know if they want to buck Iran, oil prices will indeed collapse again. But that ain't gonna happen. An Iran agreement is a deal changer. Cool heads in OPEC will need to set quotas on production, otherwise there will be a very very costly price war that no OPEC member can afford.
The Saudi oil minister screw up big time by not cutting production to keep prices up. The new King could kick his butt out of office if he don't make the right deal now. Both Iran and the Saudis know that Iran can not dump crude on the market and cause a crash in prices. Such a move would be like committing financial suicide and they know better than anyone.
josey, you might be right. Looks like we got some profit takers selling out today. You usually see this action after a 10% run-up. Such selling is even good since it removes all the weak shares. We are also getting hit today by market manipulators---one manipulator with 2 accounts selling shares from one account to the other just to run the price down and scare out the weak shares. This too is good for the long term investors since it also takes out weak hands that would sell out in any rally. Just close your eyes to this temporary nonsense... RIG will bounce back and move on up is no time at all.
By the way, I am long-long-long-long RIG. I got everything bet on this puppy and don't have an ounce of fear. RIG is a double in 6 months and another double a year later. Said differently, RIG will be up 200% by the end of 2016.
squeeze time is approaching... shorts are watching and worrying... all we need to see is rising price with a sudden increase in volume. If that happens, shorts will reverse as fast as they can.
not a short squeeze yet but hang on to your hat. One more day like this and we will get the biggest squeeze of all time.
The Iran deal is no threat to crude prices. Even if ratified, it still does not take effect until July. It also has the big snap-back clause that says all the sanctions return if Iran cheats. Iran needs the major producers to come in and drill. Who will be ready to spend a billion dollars if the snap-back clause can put them out of business? What bank will be willing to loan money? Iran has a long way to go to raise oil production. Brent will reach $75 by August 1st, 2015; WTI will reach $70. And RIG will be selling for $25. Time to load up.
As I said, no real deal for Iran, just an agreement to try again at a later date. Sanctions will remain in place; and if they are ever lifted, it will be at a slow pace.
No need to worry about Iran any more for at least 6 months.
On the other side of the coin, we need to worry about supply disruptions in the middle east due to many conflicts now ongoing.
Just hang in there and watch it happen. I been investing in oil stocks for 25 years. I do lots of homework. I know the oil business. I know trading and I know what's about to happen; I am betting a whole lot of money that I'm right.
here's comes $15 and more....
We're heading into driving season. Airlines tickets sky high. Gas is cheap. Lot's of families planning to drive their vehicles for summer vacation. Motor boating will up this year. Trucks will be transporting goods all over the world as the economy picks up. Refineries will be running full speed, turning crude into summer driving fuel. The Iran deal will not happen until later this year, if it happens at all. Congress will repeal the export ban on crude.
The middle east will be in turmoil; oil stocks will be a worry causing bump ups in price.
WTI will reach $60 by May 15. Brent will hit $65.
RIG will announce a new CEO that will excite mutual funds and other large investors.
RIG's volume is picking up. Share price will hit $20 by May 1st.
Buy in and enjoy the ride!
All is good!
keyotee... I'm with you 100%
Compare the percentage of loss in share price... not the actual current price. This will show you where the beaten down bargains are to be found. Bottom fishing some people call it.
If you looking for a 10% return on your money, there are thousands of good stocks to buy. On the other hand, if you want to double your money, then stay where you are and listen to some old dogs. You'll slowly learn.
The advice is keep buying RIG. If you have better advice, lets hear it.
It's not crude prices or the proposed cuts in capex that holding RIG below $25. The problem is investor fear due to all the bullshit negativity being put out by those holding leveraged short positions. Stop listening to the negative idiots.
Majors will drill in 2015/2016, especially in deep water, because they can get a better price now then they will get 2-3 years down the road when WDI is above $70. IT IS NOT A QUESTION OF DRILLING CONTRACTS--IT IS A QUESTION OF THE PRICE OF THOSE CONTRACTS. As long as the rigs are working, drillers will survive. I say again, the downturn will be in dayrates, not in drilling contracts. Transocean in not going out of business; they are facing a downturn. This downturn is overly reflected in the dirt cheap share prices. The worse that can happen to investors is that they might need to go through a few years of 10% growth in share price.
Everything is going to be okay... Transocean will emerge stronger and the share price will bounce back 500 to 800 percent in the next 3 years.
Don't listen to the scare bullshit. Don't set oo the side lines even 10 more minutes. Buy every share you can. Mortgage the house or the farm. Sell your car and take the bus. Use all your margin account. Stick your neck out and far as you can and you'll be the happiest person in the whole world as you whistle all the way to the bank.
This is the second time I've been through a crude oil collapse. Everybody that is important in the oil business wants crude back up above to $80 asap. This will happen... bet your life on it!
Here the BS I'm talking about. A website called OilPrice.Com just released a news story saying, "If the West and Iran can reach a deal on Tuesday night, oil prices could lose an immediate $5 per barrel, according to analysts at Societe Generale."
Societe Generale is a French Bank---certainly not in the crude business. Some jerk ass clerk make a guess that oil could fall $5 and OilPrice.com spreads the word all over the internet indicating plunging oil prices coming.
I don't believe this junk. I'm loading up on cheap shares of RIG and SDRL all the way to the axles. I know a bargain when I see one!
AS I said yesterday, RIG will close up again today.
WTI and Brent are going to pop up. The noise over the Iran deal is nothing at all. Iran will not be able to pump an extra barrel of oil until late 2017. I even doubt that they will arrive at an acceptable deal.
Global Hunter Securities analyst Mark Brown and team upgraded shares of Transocean (RIG) today. They explain why:
Bloomberg News
We traveled for four days last week with Thad Vayda, vice president, investor relations and treasurer of Transocean Ltd. We believe, to a larger extent than we had previously considered, that Transocean has the ability to significantly reduce risk exposure and manage cash flows even through a potentially prolonged downturn (extending into 2017 or beyond). We see Transocean as poised to emerge from the current market stagnation with a smaller fleet (we assume 22 floaters are stacked or scrapped), but one that is also more concentrated in the relatively scarce asset classes. We believe the upcoming CEO announcement could provide an opportunity for Transocean to take financing steps to fortify its liquidity and lower ongoing risk. We are upgrading our investment rating on Transocean to Neutral from Reduce and leaving our price target unchanged at $14.
read it here
Rig is the biggest loser on my trading screen. Someone with deep pockets is trying to push the share price down in order to scare some weak shares into selling. This is a good thing; it not only gets rid of weak shares, but it also signals a quick rise back to &14.60--if you have dry powder, load up. RIG will close higher at the end of day when the manipulators must reverse their short position and go long.
Rock and roll RIG.
RIG up 20 cents in premarket. WTI down a few pennies; USO up a few pennies. I fell a nice bounce back to $15 today. Happy trading everyone.
Shorts are spreading BS that crude prices will collapse if a deal is signed with Iran. This is not true. Even if a deal is approved, it will take Iran 6 to 12 months to raise production over their current export level. There is also talk that any deal will not become effective for at least 6 months.
Iran needs to drill and they need capital to do so. So even if an Iran deal goes through tomorrow, it will be a long time before they can raise production.
There might be knee-jerk reaction by weak shares so RIG could drop 5% in the early AM but the share price will bounce back by the afternoon. I would suggest that RIG buyers keep a bit dry powder and take full advantage of any dip in price.
I disagree. You get the right CEO and he will guide the business to a level of higher profitability. PROFIT DETERMINES SHARE PRICE. If the CEO makes mistakes, profit falls and the stock crashes. Since 2014, RIG share prices lost more than any of the major drillers because of poor management.
The CEOs of major companies make millions of dollars a year because they are the driving force of the company. Give my the best CEO... nothing else matters!