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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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ajtj99
Jacob Snyder
To: Jacob Snyder who wrote (52059)2/16/2022 1:14:35 PM
From: ItsAllCyclical2 Recommendations   of 96687
 
On the E&P side especially large cap issues I don't disagree even though many are still cheap based upon $80 oil for the next 1-2 years. In terms of the service plays the OIH is really just starting to break out on the weekly and SLB could easily just keep running to 50/60 area at this pt. Many wells were drilled pre-covid but never completed. That inventory is pretty much gone at this pt. OPEC again is struggling to keep up w/a 400K increase since Dec. This is far more newsworthy than Ukraine. Conventional wisdom is out/shorting many of the oil names now on eventual de-escalation, but yesterday many of my names finished higher w/down oil prices. There's also a chance that oil goes above the channel and then accelerates. Again the big story imo is that OPEC fields are in decline and given the underspending that went on the previous 5 years this cycle is going to last a while.

Some of these small cap E&Ps are going to go from poor balance sheets just 1 year ago to clean balance sheets, buying shares and paying dividends and that's likely to last for at least the next year plus. Still not reflected when trading at 3x cash flows at $80 oil. I see oil going to $120 area sometime in next 12-18 mo.

But I don't chase, no need to when I can add stuff like CHX. I did some selling today too, but in names near the top of their range.
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