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Energy is now 17% of the high-yield index according to Barron's. Much of the high-yield debt issuance has occurred in 2013 and 2014.
I've read the US output rose more than 5% last month while the price of oil has been dropping. With the lower demand, other producing regions were cutting back or holding supply steady. With the infusion of new debt and the new investment, these producers have to extract the oil now.
Energy is now 17% of the high-yield index according to Barron's. Much of the high-yield debt issuance has occurred in 2013 and 2014.
I've read the US output rose more than 5% last month while the price of oil has been dropping. With the lower demand, other producing regions were cutting back or holding supply steady. With the infusion of new debt and the new investment, these producers have to extract the oil now.
Way too much panicking over falling oil prices. The US is still a net importer and profiting from lower oil prices. So overall high yield will profit from declining oil prices and a stronger economy. North Dakota and Texas among others will suffer but most states will benefit. We in Arizona profit nicely via lower fuel and power prices.
The US is still a net importer and profiting from lower oil prices.
Right. You left out the word "huge." Even with all the new production, the US still imports some 50% more oil than the #2 importer. US oil imports are over 15% of world oil production that is exported. Of course, the US has the luxury of living next door to the #5 and #9 producers of oil who are capable of supplying us with about half our imports.
US oil imports might have gone below 50% of total consumption, but consumers are even now, making buying decisions based on $2 gasoline with the idea that they can afford to pay for the extra 100 horsepower today. These are the same people who were on the TV being interviewed by some reporter whining about their $100 fill-up.
I love it when the 'math-deficient' politicians say that oil independence is just around the corner.
As I said earlier, this is not the housing bust where there were no buyers and sellers could not unload their "product."
The major oil companies are probably even now starting to buy up the weaker players. Any one of them has enough cash to suck up huge portions of the horizontal boomers. When the prices get low enough, they will step in. Again, they are almost totally out of this area. It's a safe and sure way to get new reserves that will look great on their Annual Statements.
BTW two areas getting whacked along with oil producers or servicers are IMO rather benefiting from lower oil prices: refiners and pipelines. As prices get lower consumption will go up. So more crude or distillates have to be transported and refined. They are getting punished wrongly because they are part of the "energy" sector. I will be buying refiners and pipelines (usually GPs). I'm not timing I will be buying a bit on a monthly basis.
Right. You left out the word "huge." Even with all the new production, the US still imports some 50% more oil than the #2 importer. US oil imports are over 15% of world oil production that is exported. Of course, the US has the luxury of living next door to the #5 and #9 producers of oil who are capable of supplying us with about half our imports.
US oil imports might have gone below 50% of total consumption, but consumers are even now, making buying decisions based on $2 gasoline with the idea that they can afford to pay for the extra 100 horsepower today. These are the same people who were on the TV being interviewed by some reporter whining about their $100 fill-up.
I love it when the 'math-deficient' politicians say that oil independence is just around the corner.
As I said earlier, this is not the housing bust where there were no buyers and sellers could not unload their "product."
The major oil companies are probably even now starting to buy up the weaker players. Any one of them has enough cash to suck up huge portions of the horizontal boomers. When the prices get low enough, they will step in. Again, they are almost totally out of this area. It's a safe and sure way to get new reserves that will look great on their Annual Statements.
Great post, thanks. We bought a minivan in 2008 and have seen lower gas prices from the get-go. At the time nobody wanted big cars. We'll probably buy one more gas guzzler but the car after that needs to be very efficient because that's when oil usually goes up again. (Unless we get competitive alternative fuels by then.)
BTW two areas getting whacked along with oil producers or servicers are IMO rather benefiting from lower oil prices: refiners and pipelines. As prices get lower consumption will go up. So more crude or distillates have to be transported and refined. They are getting punished wrongly because they are part of the "energy" sector. I will be buying refiners and pipelines (usually GPs). I'm not timing I will be buying a bit on a monthly basis.
I see you have an interest in pipelines. May I suggest you consider looking at ETE and WMB. This may a place to start your research.
May I also suggest you look at nat gas and LNG pipelines. I believe ETE and WMB transport both.
Thanks will check them out. I have owned WMB for a while.
Great...WMB has been good to us. I also own ETP but wished I also go into ETE which is ETP's GP. I'm seriously thinking about it along with adding more to BP. FWIW...
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