So here we are – more than three years after the initial collapse of oil, watching oil companies continue to screw up every opportunity to help themselves and their shareholders.
It’s like watching the Keystone Kops:
But with the flood of 2nd quarter reports from the mini-majors like Noble (NBL), Pioneer Natural Resources (PXD), Hess (HES) and even the majors like Conoco-Philips (COP), the long march of bad planning and decision-making is finally reaching its apex.
Here’s a chart of oil prices for the last 6 months:
and here’s a chart of oil stocks for the same period:
Notice the difference? Oil has been marching through a range in 2017, between 44 and 54 dollars. But oil stocks? They’ve done nothing but drift lower.
Why?
Well, one reason has been the lie of break-even prices that oil company CEOs have been telling at every opportunity – claiming profits at $50, $40, and even $30 oil. I’ve been one to consistently tell you that these claims were utter horse-hockey. Now, with these 2nd quarter reports, others are beginning to agree.
Along with these horrific quarterly reports have come a change in strategy, one that should have happened two years ago: Oil companies are cutting back on capex spending and production increases, and no longer trying to predict when oil prices will rebound.
Hey, finally some sense from oil companies – would you waste your orchards harvesting apples at a loss during the summer if you could get a huge premium for them by waiting for the fall? It seems so easy – after the fact. Oil companies should never try to build out a business plan by predicting where oil prices are going.
Now comes the beauty part for us – when the oil companies stop acting like oil traders and let us do our thing.
And here’s where we start to make money.
Oil stocks are being decimated because they are all lowering their production guidance for the rest of 2017 and 2018, even though that is the right thing to do. They are at their lowest levels of 2017.
And that is creating some great opportunities for us.
That’s because oil is finally about to break out of its range – to the upside.
If everything I’m telling you is true, then there are going to be some tremendous value plays in the oil and gas sector to be made in the next few weeks.
But first, you need to be convinced that oil is, in fact, ready to break out of its long-established range.
And, you need to find those oil companies best equipped to take advantage of a fundamental oil price about to cross above $55 and get above $60 for the first time in 2017. (*and even possibly approach $70 by the end of the year!)
All of these answers are to be found in my next interactive webinar on Monday August 14th at 4PM. It will be my last webinar before the Labor Day holiday and perhaps my most important of the year.
You don’t want to miss it.
