Chevron Corp (CVX)

BigSchlim (91.08) Submitted: 6/24/07 10:10 AM

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$71 per barrel now.

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theskyiscrape (87.65) Submitted: 6/26/07 8:45 PM

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Fair enough!! While my timing and technical analysis skills leave something to be desired, & money has been made in this and many other oil stocks since my recommendation, I still believe this is only a temporary uptrend. I do not know when it will lose its legs, but I do not believe in Hubbert's peak oil theory or that oil is a none-renewable resource. The Russians found oil in areas thought to be geologically inappropriate for oil, and if you look back through the previous century, oil production rates have increased on a decade-by-decade basis, and continue to increase to this day. While it is true that demand is currently higher than it has been more recently, I believe there are plenty of discoveries out there waiting to happen. Nonetheless, you are correct on calling me on my currently poor recommendation. THANKS FOR THAT!! :) Thankfully, I have yet to short this stock for real, so no real money has been lost. Cheers.

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billddrummer (55.39) Submitted: 6/27/07 11:47 AM

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August 2007 spot delivery over $75. With Nigeria's civil unrest, idle refineries for gasoline, continued steady demand despite a "fragile" economic landscape in North America and Western Europe, tell me again how Big Oil is a poor choice for investment dollars.

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rodby (94.73) Submitted: 7/21/07 2:07 PM

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While I agree that there is plenty of oil in the ground, the issue is PRODUCTION. Mexico, the North Sea, and the US are all in decline. The key sources of supply are Russia, Venezuela, Canada, and, of course, Saudi Arabia. The politics of Russia and Venezuela are well documented, and they need new technology. The majors are willing to provide it, BUT they are only willing to invest the absolute minimum to get a piece of the production.

Implicit in all of the international projections is a heavy reliance on Saudi Arabia to make up the shortfalls in the other areas as well as the increases needed to meet the new demand. In a New York Times magazine article last year, the former oil minister of SA was asked if this was realistic.

While he was coy about whether SA actually had the oil, he was clear about whether they could meet the production expectations. His answer was one word: "no".

Then there is the demand. The US has over 200 million cars on the road. India, with a population more than three times ours, has less than 15 million cars. China has less than 25 million cars with more than 5 times the US population. All indications are that China and India LOVE their cars and there is very strong demand.

Finally, you mention the big find by Chevron (and Devon) in the Gulf. While it is true that this is a big find, the early indications are that the primary find is natural gas, not oil, which is typical for finds in deep water. Both Russia and Canada drilling is primarily natural gas, although Canada is using a lot of its gas to process Oil Sand deposits.

Having said all of this, I agree that the stock price may not exceed current levels for a while. Chevron has not grown its reserves very well organically so the stock price will require either higher oil prices or multiple expansion.

But the multiple expansion will come eventually. Even with oil in the $50s (actually, we would be better off looking at a composite of Natural gas and oil price), Chevron will generate huge returns, and at the end of the day, it is earnings that matter.

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ejwalden (95.57) Submitted: 11/06/07 8:37 PM

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~ $95 a barrel :)

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theskyiscrape (87.65) Submitted: 11/07/07 7:51 PM

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But this is priced in American currency, just like their expenses. As the American dollar continues its demise into worthlessness, their costs are going to increase accordingly.

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bdash (93.51) Submitted: 12/27/07 12:25 PM

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Inflation is under 5% buddy. that doesn't explain the 55% price jump.

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theskyiscrape (87.65) Submitted: 12/28/07 6:51 AM

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Well, BUDDY, I believe that there is a large terror premium built into the price of oil as well, which is mostly over-rated. Also, there is a discrepancy between the price of natural gas and crude. Natural gas prices should move upward over the next year, while crude moves downward. The United States receives much more of its natural gas supply from Canada relative to its crude oil needs, but receives both in large quantities from Canada. Since Canada is considered less of a geopolitical risk, natural gas does not have this terror premium added. Also, as crude prices sit at these levels, other alternative energy forms have become viable, and it is simply a matter of time until a paradigm shift occurs. Pssst...I don't think this will be ethanol either, although by your logic, the price of these stocks would indicate so. Thanks for your comment.

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Afropuffashion (44.66) Submitted: 6/21/08 11:24 PM

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I am with you buddy, oil is over rated. Has anyone considered the fact that America's love affair with the car is over? What about that? Instead of thinking that India and China will take on our culture (high debt-Expensive cars) what if we take on theirs?

We are sick of car insurance, car notes, car registration, driver liscence fees, drunk drivers, parking tickets, and $5 dollar on the way to $10 gas. Where are we going to get the money? We aren't! We are going to move back to the city, demand high quality public transportation, and buy a bicycle to get around locally. This trend is already supported by decline in suburban home prices, people are purchasing homes within walking distance of train stations, Americans have decreased the miles driven for the first time in years.

Long electricity, long grain, long steel, long air quality, long bikes/skates/ and sneakers, sick of wealthy people from everywhere in the world, stealing from hard working people like us and the big oil they use to do it.

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