Basically, before the hurricane, they went home Friday thinking this thing is going to fizzle out, it's going to bark but it's not going to bite, |
Basically, it was a great period for traders - some of them made a lot of money and some of them lost a lot of money. |
Because of the changes around the world, you cannot take a very hard line and unwavering view. |
Because the temperatures are rising as high as 60 degrees in (some parts of the region), the expectation is that weekly inventory data will show an increase to reflect less consumption. |
BP is more fat. Exxon is all muscle. Exxon stole the thunder this quarter. |
But oil is unlike all other commodities, ... It is a political commodity. We will go to war to protect it, to ensure adequate supply, which makes it very, very hard to predict. |
But when oil goes up, stocks go down. Crude prices have to crash, but it won't happen until about six weeks after the election. We'll see a lot of activity no matter who's in the White House. |
CNOOC handled it very badly, with poor strategy and poor decision-making. They had the deal almost in their back pocket but they threw it away, insisting Unocal pay Chevron the breakup fee. Either they got bad advice or they didn't take good advice. |
Crude prices reflect a $20 fear premium. |
Demand continues to be relatively strong. Supply remains tight. And the global economy seems to be doing OK. As they say, no harm, no foul. |
Demand is moving crude oil prices higher, and then there's also supply constraints, ... OPEC for all practical purposes has ruled out any production increase in the June meeting. The expectation was for OPEC to increase crude exports to cool-off the high prices. |
Every producer around the world is producing the marginal barrel to take advantage of high prices. Right now, OPEC is not holding back. But OPEC wants to have its cake and eat it, too. |
Everybody is trying to secure their own resources instead of being dependent on somebody else. All these government-owned companies or government agencies are emerging from the bureaucracy and the state's shadow. |
Exxon is a good corporate citizen but it does not work for the welfare of the country. |
Exxon Mobil should be a core holding for long-term investors seeking superior risk-adjusted return. |