Yah, but we gotta bottom first.
Read your note on CHK ... my read on oil is bearish. Crude is going lower I think, below 50. How far I don't know. Could briefly touch 40 even. But I think the 40 plateau may have more or less been exceeded. We shall see.
My read on everything ST continues to be bearish.
Key time periods are right here right now, middle to just before Xmas, end of January. Will take it as it comes, looking for a move down to begin almost immediately.
Rumor up here is that break even off the slope is near 50 per barrel. Higher than even I thought. Da boyz have employed waves of new folk up here, over the last 3/4 years. Been in the oil patch since '80. They have not learned one thing .... every time after they hire they have to fire. Then after they fire the big bottom comes and they hire like hell again.
Peat and repeat. Not all the smart of way to run the business, but the way it has been now for years, since the mid 80's really. Each gyration probably gets worse.
Re the 50 per barrel, we have been hit with inflation that is not fathomable to the common person, as we use a lot of high alloy materials. Manufacturers of goods we use is now limited, raw material costs have gone up significantly. Price appreciation has been unbelievable, over the last 4 years or so. The 50 per barrel will come down as prices wain, only to hit a higher low, then head out of sight. Due mainly to material costs.
Anyway, if we go below 50 in crude and head towards 40 I expect heads to immediately fall up here. Oil cos are run by good capitalists. They do not mess around too long when it comes to these issues. AK still a one horse state basically. We may soon see what Palin is really made of, w/r to fiscal conservatism. The money has been rolling in, but that is rapidly changing. Tourism, the other big business will probably almost die off. It costs a lot of mullah to come up here for a visit.
My current read is that the last bottom for quite a while is coming up, in the oil patch. How long it will take to get through this bottom, this time, I have no idea. Rogers I believe is correct in the longer term, it is only the path along the way with all the bumps and bruises that is difficult to precisely figure out.
Been watching COP out of personal interest. It could get dinged pretty hard. Comparatively they have a lot of debt to service. Debt is going to cost more money to service, at some point. Probably already is costing more. There are no gimmees. COP may have to pony up a bit for its past. Mulva may have to pull a wabbit out of the hat. All the cards over the last 4 to 5 years been in his grubby little paws, now it is a bit different.
TF
In edit. Wonder how T Boone Pickens is faring? |
