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Is it right time to buy into oil rally?

johnNjohnN
edited May 2020 in Fund Discussions
https://oilprice.com/Energy/Energy-General/Is-It-The-Right-Time-To-Buy-Into-The-Oil-Price-Rally.html

/After a heavy dose of doom and gloom, the oil markets seem to be finally getting their footing back. Crude prices have almost fully retraced their historic nosedive three weeks ago, with WTI crude for June delivery following up Monday's 22% rally with a 13.5% gain at 9 am ET on Tuesday. /


Oil energy continued to do well if economy staring open up...we have been adding slowly to this sector past few wks. Whether future returns are attained, hard to say but mid 20s bucks per barrel appear extremely cheap and perhaps only one way is to go is UP

Comments

  • WABACWABAC
    No thanks
  • MarkMark
    Agree. Not happening.
  • ronorono
    Howdy folks,

    Are you sh*tting me?!?

    Seriously there is a lot of money to be made if you can play the dead rats. Cripes, with the money they're printing and pushing onto dead industries so the executives can get bailed out, there is money to be made by individual investors. However, if you aren't FOD you best be very, very nimble.

    Places to play- airlines, cruise lines, casinos, resorts, hotels, travel, energy, sit down restaurants, brick and mortar anything, commercial and retail real estate. Please note that these industries are DEAD and only being kept alive by massive cash injections. The day traders might make a buck but the long term investor needs to either short or avoid them. I'm avoiding.

    And so it goes

    Peace and Flatten the Curve

    Rono
  • MarkMark
    Since the first of the year my only energy buys have been in the alternative energy space. Technology and the innovators are going to win this battle from where I'm sitting.
  • beebee
    edited May 2020
    Think of Oil as a feed stock...an inexpensive feed stock. This should serve as an tailwind to many industries...travel, rail, chemicals, food, utilities. Buys into these sectors as they rally and enjoy the improved margins that "cheap oil" will provide them.
  • MarkMark
    Those industries that use diesel fuel are not enjoying the same discounts as gasoline users however.

    Cost of gas and diesel fuel
  • beebee
    edited May 2020
    Mark said:

    Those industries that use diesel fuel are not enjoying the same discounts as gasoline users however.

    Cost of gas and diesel fuel

    Kinda interesting why...one explanation:
    Diesel fuel, the kind of fuel commonly used in commercial trucks, has not always been more expensive than the standard gasoline used in passenger vehicles. On paper at least, diesel fuel is a less refined petroleum distillate than gasoline, so it should always be cheaper to produce than gasoline. The problem with diesel fuel prices has more to do with the laws of supply and demand for various petroleum products, not the actual cost of production.
    At some point in the year, oil refiners concentrate their efforts on another product similar to diesel fuel: home heating oil. At this point, usually just before winter, diesel fuel becomes more plentiful and the price usually drops. This trend doesn't always hold true, however, since a particularly cold winter can keep demand for home heating oil high and once again put diesel fuel production lower on the refiner's agenda.
  • Derf
    How many people do you know that heat with oil ? Zero here !
    Derf
  • MarkMark
    @Derf - in the country it's still a thing for many. Either that or propane due to the lack of city services. Those folks have no choice and propane during the heating season can be priced beyond expensive. Now many supplement with firewood but one likes to have a backup source. The same goes for wifi and high speed internet. It's a different world out here. Heck, many third world countries have better access then we do.
  • Sven
    Business air travel has changed significantly amid COVID-19 situation as telecons have replaced face-to-face meetings. Most of the tasks are getting done but personal experience differs widely. Security and connectivity are improving. I suspect most of this method will remain for health safety and cost saving consideration when the lockdowns relax later this year. Question is will business travel ever return to the same capacity in the future? Leisure travel may differ. Certainly there will be more restrictive at the airports. With fewer demand on fuels and oil, energy sector is a long long term play if you have the patience.
  • Old_Skeet
    Energy accounts for about eight percent of my equity allocation. Since collectively my mutual fund managers are overweight Energy I'm doing nothing to overweight the sector myself.
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