Dr. J
Active Member
Cramer: "Look, this is the other side of Tesla." Thus reinforcing the thread title.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Wow, between Cramer and Blackrock, the investment tide has turned. Doesn’t matter what you think about climate change, if the rest of the world is concerned, your stock will get hammered. Sold my Exon a year ago and bought Tesla, so much farther ahead now.
TheTalkingMule
Distributed Energy Enthusiast
Delta halting flights to China from Feb 3rd through April. American announcing something similar, others will certainly all follow. People are underestimating the impact this will have on global oil demand.
You think XOM had a rough time with refining margins the last two quarters? Good luck in 2020! Airlines are the last customers in line that get hosed on pricing because their demand is the least flexible. The impact of this on refining margins will be double or triple the impact of say.....EV marketshare gains.
You think XOM had a rough time with refining margins the last two quarters? Good luck in 2020! Airlines are the last customers in line that get hosed on pricing because their demand is the least flexible. The impact of this on refining margins will be double or triple the impact of say.....EV marketshare gains.
I love this quote. When Cramer turned the corner on Tesla, he could easily see that oil was done for.
Cramer is a money flow trader. It doesn't matter when exactly oil will peak. Money will stampede well in advance of declining production. So Cramer instinctually sniffs out this sort of action.
In these thread for years, we have been waiting for this day to come. Cramer is a loud mouth giving voice to the quiet changes in money managers. This reframes oil and gas investments this way: there is an exodus coming, exiting money flow will swamp whatever you think you're getting from stock buybacks and leveraged dividends. Heading into a glut will not end well for oil and gas investors.
Let's suppose an institutional investor is starting to divest oil and gas. What will that money flow into? How will this investor hedge over the time it takes to divest?
Is it wishful thinking to imagine that some of this money will flow into Tesla and other parts of the EV supply chain? I would like to think of Tesla stock as an attractive hedging instrument against oil and gas exposure. If a fraction of capital flows from O&G E&P into the whole lithium ion battery supply chain, that would be a real plus for Teala in that it would assure that battery minerals are well supplied and cheap.
What do we think? Will Tesla benefit from the O&G stampede?
Is it wishful thinking to imagine that some of this money will flow into Tesla and other parts of the EV supply chain? I would like to think of Tesla stock as an attractive hedging instrument against oil and gas exposure. If a fraction of capital flows from O&G E&P into the whole lithium ion battery supply chain, that would be a real plus for Teala in that it would assure that battery minerals are well supplied and cheap.
What do we think? Will Tesla benefit from the O&G stampede?
TheTalkingMule
Distributed Energy Enthusiast
If you think it was funny watching shorts try to take down Tesla, just wait till you see these historically fossil-based investors attempt to hoard portions of the sustainable energy sector. It's going to be hilarious.
I literally think they're incapable of making this transition. It goes against every fiber of their being.
There will be plenty of bag holders in the fossil industries.
Let's take a look at oil and gas prices. Shall we?
Any questions?
Any questions?
I think we're well aware that TSLA is becoming an energy company, and thus a natural opposite to O&G, but would the institutional investors see that? Or would they think that Solar/Wind/Hydro are the competing companies and invest there? Also, how does BP/Shell's investments into Solar companies affect their "investibility"?
I think if O&G can successfully sell a plan to "transition" into renewable energy production (after all, it's all still about energy production and distribution), then they can stem the tide of investor exodus.
Edit: Never mind, I take this back. Just checked Total SA's renewable energy investment, and it's super tiny. So far it consists of development work in the building of solar farms in Japan and China. They're not investing enough to survive peak oil consumption.
Last edited:
mspohr
Well-Known Member
Except renewable energy production and distribution has absolutely nothing in common with O&G.
Old dog, new tricks.
Back to the title of this thread, I'm starting to wonder if now might be a good time to actually start "shorting" oil. Perhaps we've gotten close enough to the "tipping point", if we haven't already passed it.
I just had a look at long dated Puts on XOM. For about $1/share, one can bet that XOM will drop in half over the next two years. Or, for closer to $4/share, that XOM will lose a quarter of its value during that time. Specifically, I'm talking about XOM Jan. 21 2022 $32.50 Puts and XOM Jan. 21 2022 $50 Puts, respectively. Any thoughts?
I just had a look at long dated Puts on XOM. For about $1/share, one can bet that XOM will drop in half over the next two years. Or, for closer to $4/share, that XOM will lose a quarter of its value during that time. Specifically, I'm talking about XOM Jan. 21 2022 $32.50 Puts and XOM Jan. 21 2022 $50 Puts, respectively. Any thoughts?
I love the idea that the market might turn against oil and gas... but it’s nearly unfathomable to me that Exxon could lose half its value in two years. Tesla will still be selling less than a million cars a year... there’s going to be plenty of oil demand still. It would have to be the case that the whole rest of the market turns against fossil fuels such that it’s a wholesale change of sentiment not a 50% change in fundamentals. I loved hearing Cramer trash talk oil and gas, but the rest of the market is still the interviewer, basically calling him crazy.
Exxon’s Earnings Slump On Poor Petrochemical, Refining Results | OilPrice.com
Earnings are down 31%, while the oil fell 4%. The stock price is down 13%. P/E ratio is probably too high considering these facts. Moreover, production was flat in 2018 and the refinery business and gas were money losing. So right off, Exxon could be due for a 20% price correction.
Moreover, oil and gas might both be headed into to a multiyear glut. If oil falls 30% through this glut, the stock price could take a huge hit. I can't convince myself that this will likely happen, but the potential exists with nontrivial probability. I'm not going to short it, but I definitely would want to be exposed to it.
Earnings are down 31%, while the oil fell 4%. The stock price is down 13%. P/E ratio is probably too high considering these facts. Moreover, production was flat in 2018 and the refinery business and gas were money losing. So right off, Exxon could be due for a 20% price correction.
Moreover, oil and gas might both be headed into to a multiyear glut. If oil falls 30% through this glut, the stock price could take a huge hit. I can't convince myself that this will likely happen, but the potential exists with nontrivial probability. I'm not going to short it, but I definitely would want to be exposed to it.
What? If Tesla keeps growing at 50% a year, Tesla alone will use over 400 MWh in 6 years. Meanwhile, they're basing this battery JV on an estimate that all of Europe will use 400 MWh by 2030?
Somehow I think they'll be revising those estimates after Battery Investor Day in April...
Or, you know, hey, maybe they're predicting that Tesla will be the only car manufacturer on Earth by 2030, and Europe will be 20% of their total 2 TWh capacity.
mspohr
Well-Known Member
BLOWOUT by Rachel Maddow | Rachel Maddow
Big Oil and Gas Versus Democracy—Winner Take All
Rachel Maddow’s Blowout offers a dark, serpentine, riveting tour of the unimaginably lucrative and corrupt oil-and-gas industry. With her trademark black humor, Maddow takes us on a switchback journey around the globe—from Oklahoma City to Siberia to Equatorial Guinea—exposing the greed and incompetence of Big Oil and Gas. She shows how Russia’s rich reserves of crude have, paradoxically, stunted its growth, forcing Putin to maintain his power by spreading Russia’s rot into its rivals, its neighbors, the United States, and the West’s most important alliances. Chevron, BP, and a host of other industry players get their star turn, but ExxonMobil and the deceptively well-behaved Rex Tillerson emerge as two of the past century’s most consequential corporate villains.
Big Oil and Gas Versus Democracy—Winner Take All
Rachel Maddow’s Blowout offers a dark, serpentine, riveting tour of the unimaginably lucrative and corrupt oil-and-gas industry. With her trademark black humor, Maddow takes us on a switchback journey around the globe—from Oklahoma City to Siberia to Equatorial Guinea—exposing the greed and incompetence of Big Oil and Gas. She shows how Russia’s rich reserves of crude have, paradoxically, stunted its growth, forcing Putin to maintain his power by spreading Russia’s rot into its rivals, its neighbors, the United States, and the West’s most important alliances. Chevron, BP, and a host of other industry players get their star turn, but ExxonMobil and the deceptively well-behaved Rex Tillerson emerge as two of the past century’s most consequential corporate villains.
TheTalkingMule
Distributed Energy Enthusiast
These FCF figures are intriguing considering those were the good times! 4Q had oil priced a good 20% above where it should have been. Now we have coronavirus and a looming recession. Is this already the end?
navguy12
Active Member
I read this book about three months ago...the part that really suprised me was the use of a nuclear device to attempt to free up trapped natural gas deposits in IIRC Colorado in the late 1960s...
The industry has become more efficient and supply is up, thus reducing price. But I am thinking volume is the key and despite a discernible pivot to renewables, most the world still runs on fossil. And I think, given the ascension of the developing countries, demand will increase rather than decline.
Similar threads
