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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (28554)	6/21/2021 6:08:55 PM
From: ajtj99	Respond to of 96549

Yup, the frackers are being responsible with their cash for a change. Part of it is the bond market saying 10-years of screwing us with pie in the sky dreams while bleeding every dollar raised is about all we can handle. I suspect the lack of visibility on the pandemic end game in the developing world has pumped the brakes on some E&D capex. That and the cash flow crash from the pandemic. Also, the volatility in pricing that could be brought by flex suppliers Iran and Russia also probably gives some pause to aggressive capex plans.

To: Jacob Snyder who wrote (28554)	6/21/2021 8:35:35 PM
From: Sun Tzu	2 Recommendations Recommended By ajtj99 robert b furman Respond to of 96549

Much has been made of the coop in Exxon's boardroom. But few news outlets actually discussed the reasons. Exxon's strategy had been to be the last traditional oil producer standing. It was similar to what Philip Morris was doing - they knew that the trend is against smoking, and they wanted to capture market share are from rivals who exited the tobacco business. Similarly, Exxon's goal was to remain the old fashioned oil company that filled in the gaps left behind by BP, Shell, etc. What the news outlets failed to reveal was that the shareholders did not approve of the activists on moral grounds. It is that the activists presented a compelling case that there may not be a future in oil business at all, and that by failing to pursue alternative venues, XOM's management was endangering the long term viability of the business. I have heard people making similar cases against midstream (pipelines) such as ENB. Sure, you get a high dividend and attractive valuations now, but it's not a long term buy and hold b/c there may not be a future for them - or so the argument goes. I wish we had decent news that would actually dig into the issues so we could judge for ourselves. But as it stands, all we know is that somehow the activists convinced the major shareholders (most of whom are very big global asset managers) that the current management's approach is negligent. What I am getting at here is that it may not be about what is fashionable or PC. Maybe the oil producers know better than us and that is why they are not trying to develop new oil wells. Maybe they know that it will not be worth the expenses. Or maybe they see every car going electrical and wonder who they will sell their oil to in 15 years. Or maybe they think that a cheaper alternative will be found with 10 - 20 years and they'd better start working on that. There are many possible explanations. just a thought to consider. PS This will make $100 oil very likely - but that doesn't necessarily mean that the oil producers will be making more money off the expensive oil if the consumption drops.

To: Jacob Snyder who wrote (28554)	7/1/2021 6:24:46 PM
From: Jacob Snyder	3 Recommendations Recommended By ajtj99 tntpal towerdog Read Replies (4) \| Respond to of 96549

Re metals and oil: Some basic materials can increase supply quickly, so high prices tend not to last long. For others, lead times can be as long as 10 years. It depends on capital requirements, barriers to entry, regulatory issues. Low prices 2014-2019, followed by the early-2020 collapse, made many producers wary of big new projects. In the developed world, it is getting harder to get anything done. Even if the project gets the required permits from Federal, State, local, tribal, and the little old lady who lives nearby, transportation bottlenecks can make it uneconomic. In the developing world, there is the random threat of failed states, expropriation, Marxists getting elected. So, high prices will last years for some materials. For others, we may already have seen the peak. My take on: Oil: Message 33381015 Iron ore: Message 33381522 Gold: Message 33367865