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drbubb

Oil Service (OIH)

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BE CAREFUL

 

I have been making some positive noises about OIH (but no buying yet), and have targetted $80-90 as an area for a possible

low in Oil. That may still prove right, but I sugggest people tred carefully, as I will myself.

 

I had an interesting PM from someone within the industry, that made these points:

 

+ projects beginning to be pulled.

+ oil Service companies pushed up ratse massively over the last 3 years,

but economics for deepwater megaprojects are stretched to the limit

+ in a lower oil price environment, rates will have to fall back alot to make

offshore projects viable, especially when libor rates are so high

 

Result; there will be a huge squeeze on earnings in the offshore sector.

Onshore may be brighter, however.

 

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BE CAREFUL

 

I have been making some positive noises about OIH (but no buying yet), and have targetted $80-90 as an area for a possible

low in Oil. That may still prove right, but I sugggest people tred carefully, as I will myself.

 

I had an interesting PM from someone within the industry, that made these points:

 

+ projects beginning to be pulled.

+ oil Service companies pushed up ratse massively over the last 3 years,

but economics for deepwater megaprojects are stretched to the limit

+ in a lower oil price environment, rates will have to fall back alot to make

offshore projects viable, especially when libor rates are so high

 

Result; there will be a huge squeeze on earnings in the offshore sector.

Onshore may be brighter, however.

Well, already lost a shed load on RIG, not sure it's worth selling now.

 

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OIH is predicting a rally in Oil (USO)

 

See OIH vs. USO ... update

 

aa0ee3.gif

 

...or so it would seem

 

I have been making some positive noises about OIH (but no buying yet), and have targetted $80-90 as an area for a possible low in Oil. That may still prove right, but I sugggest people tred carefully,...

 

$80 has been right so far

bigek1.gif

 

Room for a (slightly) lower low in WTI Crude

003ko3.png

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Jan. USO Calls ======== Bid / Offer

 

UBOAL 15.20 ========= 13.80 14.30 56.00 38.00

UBOAM 13.60 +0.10 10.00 13.00 13.50 22.00 39.00

USOAH 12.90 ========= 12.30 12.80 92.00 40.00

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