Oil Stock

[Gold Pile]

I own a certain oil stock. It's been a great dividend machine. We are used to oil stocks fluctuating. It seems that the current rough patch has the potential to be a permanent downturn.

 

Electric cars, alternate fuels, Saudi "over production". I assume SA cant pump forever, and electric vehicles are hyped beyond their realistic practical use. (I wouldn't be surprised to see Tesla have an epic failure). But still the trends are underway.

 

What do you see as the medium term outlook for oil stock?

[carhill]

I've been in an XOM drip since working oil and gas in the 80's. The past four years have probably been the worst performing in memory. Not promising for the third largest business in the world. A war would probably help, as well as China/India opening up Africa. As it is now, about a wash, dividends included, if not a little down.

[major_merrick]

The way I look at it, oil is priced way below where it was a few years ago. It bounces around, but it hasn't gone up significantly. With the problems in the Middle East, the situation could be volatile. I'm thinking that oil prices will rise in the next 5-10 years. I invested in oil stocks/etf's a while back when things were at rock bottom, and I've already seen a decent return on my investment.

 

You mention Tesla - I think it is way overrated. The technology simply isn't there for a long-distance electric car. Might work for people in cities or on the coasts, but for those of us in flyover country it is just a waste. And for those in cities, mass transit is available. I think Tesla is a no-win at the current level of technology.

[CautiouslyOptimistic]

Didn't Walmart just buy five Tesla tractor trailers?

[Joe_the_Plumber]

I'm in Exxon.. and quite bit of OEG and XCEL ENERGY

 

Love them all and have made me money, the XCEL ENERGY is up about 30% for the investment

[Gold Pile]

Didn't Walmart just buy five Tesla tractor trailers?

That doesn't make Tesla a money maker. Lots of showmanship coming from Tesla's Musk. He portrays himself as a visionary. Unfortunately Journalists forget their duty to question when it comes to him. Unseasoned investors have been throwing money at him for years. Tesla isn't making a profit.

 

At this point it certainly seems like electric vehicles will grow & grow. Even if the tech is than perfect, the authorities have and will legislate for them. But the future belongs to other companies that operate with financial discipline.

[GunslingerRoland]

That doesn't make Tesla a money maker. Lots of showmanship coming from Tesla's Musk. He portrays himself as a visionary. Unfortunately Journalists forget their duty to question when it comes to him. Unseasoned investors have been throwing money at him for years. Tesla isn't making a profit.

 

At this point it certainly seems like electric vehicles will grow & grow. Even if the tech is than perfect, the authorities have and will legislate for them. But the future belongs to other companies that operate with financial discipline.

 

Musk is trying to change the world, he isn't trying to make the most profitable company. I think investing in Tesla is more of an ethical decision than a financial one...

 

Anyway as for oil stock, I'm not an expert on the subject at all, but I'm actually not sure who is. It doesn't seem like anyone knows how to estimate the future value of it. Clearly the world is moving away from oil, but just as clearly it isn't going to be an overnight change. Supply which was once thought to be nearing it's peak now seems to far from it.

 

As an Albertan I feel like enough of my future is tied up in oil no matter what, that I don't feel a need to actually invest in it.

[Gold Pile]

Musk is trying to change the world, he isn't trying to make the most profitable company. I think investing in Tesla is more of an ethical decision than a financial one...

 

Anyway as for oil stock, I'm not an expert on the subject at all, but I'm actually not sure who is. It doesn't seem like anyone knows how to estimate the future value of it. Clearly the world is moving away from oil, but just as clearly it isn't going to be an overnight change. Supply which was once thought to be nearing it's peak now seems to far from it.

 

As an Albertan I feel like enough of my future is tied up in oil no matter what, that I don't feel a need to actually invest in it.

Indeed the world is moving away from oil, the time frame is the big question. For many years retirees and other investors have been able to count on a very good dividend income from certain oils stocks. Perhaps there is an element that invests in Tesla as an ethical statement of sorts. Surely many others were expecting a profitable enterprise. Musk is set for life. I hope the above mentioned retirees didn't invest with him.

[carhill]

Oil and coal will still be key to developing nations until infrastructure for other more environmentally progressive energy sources can be developed.

 

Given how global the economy is, and how goods are moved in massive quantities from lower production cost regions to consumption, unless we're developing nuclear merchant vessels and aircraft, yup, oil. Etc, etc.

 

As one example, a typical long range aircraft holds nearly 50,000 gallons of JetA. 50,000 gallons. That's for a plane, one of hundreds if not thousands, which flies long-haul routes every day, like New York to Asia, and it consumes most of that in one flight, one way. Will aircraft always use dino? Maybe not but it's a long way off.

 

We see cars and trains going electric and that's really cool. Myself, I love my all-electric place in the woods, mostly powered by hydro on the plentiful northwest rivers.

 

Then there's oil companies branching out into other energy areas. Diversifying. Responding to the changing marketplace. The main change in my lifetime will be a reduction in dependence on oil countries in which oil is their main or only product. They'll need to diversify or die. The US has one of the largest oil reserves in the world but we're also leaders in hydro, solar, wind, nuclear and coal energy technologies. We're not dependent on one product or area. Diversified.

 

Another sector already mentioned adjunct to oil stocks themselves are oil services. That's what I used to work in, field services. Production setup, maintenance, refit, repair. Today, I'd probably be doing design build on fracking equipment if I were still in the biz. Back in the day it was steam extraction and horizontal drilling technologies, refinery service, pipeline maintenance, compressor/pump repair and refit, etc. All that stuff is still around and if the US chooses to bring more production domestic as total consumption moderates and dependence on foreign sources is selected to ramp down, those service areas will ramp up. Halliburton is a good example of a oil services stock.

 

However, much to my chagrin, my sample tracking of identical investments in WMT and XOM has the giant retailer doing better overall the last two years than the oil company. It is what it is.

[Gold Pile]

Your electric place in the woods sounds nice. You know your oil. Its nice that certain nations cannot hold the US hostage with oil anymore. I agree that oil will be around for our lifetimes. As long as they keep the dividends up, I won't part with the stock. With war, developing nations and such...I hope for an upturn at some point. Not permanent but still nice.

[carhill]

One example of a developing market XOM is involved in:

 

Mobil Producing Nigeria Unlimited (MPN) operations | ExxonMobil

 

Nigeria is just out of the top ten producers of oil though things have been a bit unstable of late, and MPN (Mobil) has significant operations there. As China develops industry in Africa, more oil will be needed for quick ramp up of power generation and transport and industrial processes. Sure, alternative fuels will get there but crude oil and natural gas will be the front line to initial development. I really see Africa as the next market and production area on the planet. IMO, Exxon/Mobil will be right in the middle of it.