Replies to post #10309 on The Rising Influence of Rising Affluence

[DewDiligence]

I’m not adding to any oil & gas positions, but I’m holding my shares of HES. (Selling would trigger a pretty big tax hit.)

[OakesCS]

I suspect that the recent interest is partially related to the close similarity in drilling rig activity between 2008-9 and 2014-15. The month to month differences are <1% (generally <0.5%) for every month over the past 18 months. If the similarity holds then, we are currently at the market bottom. I'm not convinced the parallel will hold. The oil market may still be close to a bottom - I just don't think it will recover like it did in 2010 but stay flatter for longer. When international growth does pick up the production surpluses and demand for storage will go away quickly. I also think the double-whammy of personnel losses in 2010 and 2015 will create many long term problems in the industry. A lot of experience has gone away that won't be coming back.

[WorstLuck]

may wind up with a smallish position anyhow as I sold close dated puts at the 65 strike.

Good news bad news. I managed to get out of the 65's for a trivial profit and then had a brain fart and sold some 63's. So I'm now an owner of a smallish position a bit underwater w/ cost basis in the 62's. No idea where the bottom might be.