Posted on 12/23/2015 6:00:07 AM PST by CincyRichieRich
Summary
I calculate that plunging oil prices took about $8-10 per share out of S&P 500 earnings in 2015. It was also the biggest cause in the leveling off in the S&P 500 earnings in 2015.
There is really nothing wrong with demand for oil. It is a supply issue. Until somebody flinches on production, oil is going to continue drop.
After a leveling off of S&P 500 earnings in 2015, analysts are looking for about 8% growth in 2016. This obviously would be very bullish the U.S. stock market if they are right.
My Conspiracy Theory on Oil
The market now has the big FED question out of the way. The ramp earlier ramp up in the U.S. dollar has finally leveled off. After a leveling off of S&P 500 earnings in 2015, analysts are looking for about 8% growth in 2016. This obviously would be very bullish the U.S. stock market if they are right.
(Excerpt) Read more at seekingalpha.com ...
I don’t understand using Free Republic to promote forum activity on another web site.
Seeking Alpha isn’t that great of a website, in my opinion.
If a company has a product or is trying to eliminate the competition, they will hire a hedge fund to short the stock of their competitor. This hedge fund will also write attack articles about the company they are hired to destroy. Seeking Alpha is one of the main websites used by these people (another is Shareslueth.com - a Mark Cuban website). They publish the article and at exactly the same time as it being published have their computers attack the stock. I’ve seen it repeatedly.
They do have some good general articles, but as for information about a particular stock, I would not recommend it.
Liberals have no clue about economics or they wouldn’t be liberals. They are utterly ineducable.
The only "conspiracy" is that OPEC is trying to use lower oil prices to destroy the shale competition.
OPEC, Saudi Arabia is driving the price down to cause US, Canadian producers to go belly up.
When enough of them fail Saudi will cut back production, raise the price and fill their coffers.
OPEC lowering oil prices will reduce the amount of money their enemies like Iran will have. Putting fracking companies out of business will give Saudis entrance into the fracking business through the fire sale of equipment.
Your assessment is spot on.
This is all they are doing. Once Shale goes dead, and the resources used to exploit it have gone elsewhere, they will cut production and drive oil back to $100. It will take 10 years to redeploy the equipment and people needed to get shale back online.
Yes, . . . IF they sell to the Saudis. But if the shale companies have prepared, they can ride this out. Sooner or later they will be needed.
The Saudis need $100 oil to keep their lifestyles and service all the stupid stuff they invest in and that includes their push of islam. Now that domestic producers can export and shale producers can make money at $30 a barrel this is the perfect time to put the Saudis in the dirt, we, sand.
It should be incontrovertible that falling oil prices should be good for the overall economy, even if it’s bad for US producers.
Consumers, manufacturers, and service sectors all benefit greatly. And let’s remember, even within the oil sector the damage is limited to extractors. Distributors and retailers maintain their margins.
There should be far more companies listed on the exchanges that benefit from the drop, than the small number who lose value. So I don’t buy the assertion that the “stock market” did poorly because of the drop in oil prices. The author seems to suggest “we” need an increase in the price of oil for the economy to benefit. This is ludicrous. Maybe I missed something, refused to sign up to read th whole article at the link.
Then there’s natural gas, always forgotten in these discussions. Nat gas is the primary feedstock for plastics, packaging, pharmaceuticals, fertilizer, and transportation directly, and therefore affects the price of everything we consume, and these benefits are just now beginning to show up.
The fall in the price of energy may be the only reason the American economy is still standing, after the assault on capitalism we’ve seen from Obama for the last seven years. There’s sweet irony in this, in that the only reason this energy revolution even happened is because it played out exclusively on private property, and Obama couldn’t do anything about it. Or he most assuredly would have stopped it in its tracks.
Shale will not ever die. It is like a vampire that can keep returning from the dead. It is very easy to crank back up any time the price of oil goes up and the Saudis are stupid to think they can kill it without killing themselves in the process. I hope they do and soon. It would warm my heart to see Putin turn his guns South if we could just stay out of it.
No matter, Saudi Arabia will not be around in 10 to 15 years as we know it now. The system can’t be supported.
The Saudies publish engineering reports on their oil fields that provide detailed info suggesting their oil fields are nearing end of production. They require massive water injections to maintain pressure. No other fields have Ben discovered for some time. Good book on the subject is Twilight in the Desert.
I’ve lived the story for the last 40 years. I don’t need the book.
I don’t understand using Free Republic to promote forum activity on another web site.
Voting on a poll is not the same as requesting to move the discussion to another web site.
You fail to understand how much additional business orders are done from oil exploration and build out of infrastructure.
Dresser-Rand plans to shutter plant, lay off 72 workers
http://www.freerepublic.com/focus/f-news/3375512/posts
U.S. Steel postpones Alabama project
http://www.freerepublic.com/focus/f-news/3375490/posts
Lots of non-oil business are hurting and laying off due to the scale back in oil company spending.
Voting on a poll is not the same as requesting to move the discussion to another web site.
Thanks, Thackney! Have a quick look at the graph, “World Liquid Fuels Production and Consumption Balance” (production vs. consumption) on the page behind the following link.
http://www.eia.gov/forecasts/steo/report/global_oil.cfm
Look closer at the projected difference for the end of the first quarter (”Q1”). Notice the nice looking projected difference for the last three quarters.
Pretty funny, eh (re. the projected stability)? And not much difference there. Quite a difference between what we see there and the fog of market propaganda.
Question is, how far will they extend the game by using using oil in storage intended for refineries and exports (very recently only about 485 mb) and possibly, strategic reserves (different stored oil)? And how far will the bankers go with further loans to producers going through difficult times?
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