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To: bruwin who wrote (3870)	11/13/2014 3:56:13 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 8255

re oil price: all the political events are just "noise in the signal." The price of oil will be controlled by supply and demand. Marginal demand is controlled by the developing world, mainly China. Until the next global recession happens, global demand for oil will trend modestly upward (with short-term fluctuations to confuse us all). Marginal supply will be controlled by increasing North American production, which in turn is controlled by evolving technology (fraccing, in situ tar sands, deepwater). Below $80, those new extraction technologies become rapidly uneconomic. Therefore: the price of oil cannot remain below $80 for long, because all increases in supply cost at least that much to develop. disclosure: long SU at $34, will buy more at $31 and on down, as low as it goes.

To: bruwin who wrote (3870)	11/13/2014 4:15:28 PM
From: The Ox	Read Replies (1) \| Respond to of 8255

Oil and NG initially moved higher during the start of the Crimean and Ukrainian turmoil. Once it was clear that Putin was trying to hold Europe hostage with respect to NG that flows through the Ukraine, I think the powers that be decided to trump Russia's move through a stealth yet coordinated effort and letting oil prices fade. I tend to agree with Jacob with respect to the price of oil for the longer term. I doubt it will stay below $80 for very long.

To: bruwin who wrote (3870)	11/28/2014 11:02:36 AM
From: bruwin	Respond to of 8255

So, ... it seems that "some commentators" were quite correct when they suggested that the Saudi's, et al, would not cut back on oil supply after the OPEC meeting held on the 27th. November.

To: bruwin who wrote (3870)	11/29/2014 11:47:42 PM
From: gcrispin	2 Recommendations Recommended By bruwin Return to Sender Read Replies (2) \| Respond to of 8255

As you know, bruwin, I have a different view from the majority opinion. I don't think that the Saudis are concerned with the emerging countries who are oil producers. Many of them only have oil as their major export, so they will have to keep pumping and selling to keep maintain their cash flow. Since oil is sold in dollars and their costs are in local currency, the strength of the dollar has lessened the pain of the decrease in the price of oil. Think of the rubles that a barrel of oil will bring when it sold in dollars. Besides there are too many rogue nations (Libya for example) that will violate any agreement that OPEC would strike. This is basically a game of chicken between the Saudis and the United States. The Saudis want to decrease the price of oil so as to take production out of the United States. Since our costs are in dollars our margins will shrink much more that in the emerging countries. The Saudis also have a political agenda here as well as the United States reliance on foreign oil keeps the United States engaged in the Middle East both politically and militarily. We don't yet know what the magic number is for United States companies to shut down wells. But once an equilibrium is established, I believe that the price won't return to previous levels (not withstanding conflict in the Middle East) The Saudis will maintain the price just above the level where enough US production is shut down that they maintain their market share here. So I think the recovery in oil will be U shaped on the chart, not V shaped. There is certainly not enough demand from China and Western Europe to change that dynamic. You also have nations outside of OPEC (Russia, Mexico) who will pump more to maintain the cash flow they were receiving when the price was higher. So I am playing this scenario from the view of who benefits. As you know, I have large positions in DAL and AAL. AAL hit a new high as they are unhedged in jet fuel and they are on record in the last conference call as saying that savings from the decrease in jet fuel will be allowed to fall to the bottom line. I still think the stock is not overvalued as earnings will beat on the upside and there will be some PE expansion. Another ideas that I would look at (but I don't own) are transportation indexes: XTN. Also, I would consider THO and WGO as beneficiaries of lower oil prices. These two companies have no debt and no foreign competition that I am aware of. They are also on the right side of the demographic surge. You might not be aware of it, but Warren Buffet is in the RV business. fortune.com So Warren might not like airline companies, but he loves RVs.