Oil pricing lock-in / pre-buy

[Ashful]

Every summer, I buy 1000 gallons of oil at off-season pricing, since that's about what I need to get thru the year with two stoves running. This has worked well for me every year, usually saving me a few hundred dollars. Of course last year's unexpected $1.30 drop in oil prices caused me to spend $1000 more than I should have for the year, which was a first. A double whammy, since my Exxon stock took a 20% hit, in the process.

Any educated outlook or predictions on oil pricing for the next 6-9 months? Wondering if I should lock in or float this year. Thinking it's probably not a bad idea to lock in, given how low current pricing is.

 

[HSBull]

Commodity experts tend to agree prices will remain stable for a yr. This question is what does the market look like after that. Most able that prices are not likely to drop much further and an conflict in the mid East could start a spike.....I also would not worry about the ExxonMobil drop, lean times make us in essence tighten their belt and come out leaner with better upside....

 

[mass_burner]

Every summer, I buy 1000 gallons of oil at off-season pricing, since that's about what I need to get thru the year with two stoves running. This has worked well for me every year, usually saving me a few hundred dollars. Of course last year's unexpected $1.30 drop in oil prices caused me to spend $1000 more than I should have for the year, which was a first. A double whammy, since my Exxon stock took a 20% hit, in the process.

Any educated outlook or predictions on oil pricing for the next 6-9 months? Wondering if I should lock in or float this year. Thinking it's probably not a bad idea to lock in, given how low current pricing is.

I consulted my swammy and he said it's going to go up...or down...or stay the same.

Nibble away at UHN etf, 18 and change now, was ~35 last year this time.

There are no experts in terms of knowing where the prices will go on commodities or stock prices.

 

[jatoxico]

Locked in at $2.59/g including service contract. Good enough.

 

[Ashful]

I consulted my swammy and he said it's going to go up...or down...or stay the same.

Nibble away at UHN etf, 18 and change now, was ~35 last year this time.

There are no experts in terms of knowing where the prices will go on commodities or stock prices.

Yes, there are. They make daily decisions on how to manage my portfolio, and undoubtedly do a better job than any "swammy".

 

[mass_burner]

Yes, there are. They make daily decisions on how to manage my portfolio, and undoubtedly do a better job than any "swammy".

If they're making daily decisions about your portfolio, then their probably charging you a bundle without sharing in any of the risk, or even matching index funds performance.

Everyone should watch that Frontline special on retirement investing.

 

[BrotherBart]

Some guy here said a month or so ago it was going to continue to go down at least through the end of the year. Now who was that...

I feel your pain on the Exxon stock. Losing my butt right now. Been there before.

 

[Ashful]

If they're making daily decisions about your portfolio, then their probably charging you a bundle without sharing in any of the risk, or even matching index funds performance.

Yeah, that's what this thread is about.

 

[Grisu]

Yes, there are. They make daily decisions on how to manage my portfolio, and undoubtedly do a better job than any "swammy".

Not necessarily: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=670404
(broken link removed to http://gawker.com/5975736/ordinary-housecat-beats-professional-wealth-managers-in-year-long-stock-picking-challenge)
https://blog.wealthfront.com/illusion-stock-picking-skill/ excerpt from the last:

Some years after my introduction to the world of finance, I had an unusual opportunity to examine the illusion of skill up close. I was invited to speak to a group of investment advisers in a firm that provided financial advice and other services to very wealthy clients. I asked for some data to prepare my presentation and was granted a small treasure: a spreadsheet summarizing the investment outcomes of some 25 anonymous wealth advisers, for eight consecutive years. The advisers’ scores for each year were the main determinant of their year-end bonuses. It was a simple matter to rank the advisers by their performance and to answer a question: Did the same advisers consistently achieve better returns for their clients year after year? Did some advisers consistently display more skill than others?

To find the answer, I computed the correlations between the rankings of advisers in different years, comparing Year 1 with Year 2, Year 1 with Year 3 and so on up through Year 7 with Year 8. That yielded 28 correlations, one for each pair of years. While I was prepared to find little year-to-year consistency, I was still surprised to find that the average of the 28 correlations was .01. In other words, zero. The stability that would indicate differences in skill was not to be found. The results resembled what you would expect from a dice-rolling contest, not a game of skill.

 

[sportbikerider78]

If they're making daily decisions about your portfolio, then their probably charging you a bundle without sharing in any of the risk, or even matching index funds performance.

Everyone should watch that Frontline special on retirement investing.

Buy ammo and guns. If you need them to go bang, they can.
If you don't need them to go bang they don't lose value...ever.

You're welcome.
-Swammy

Investing is a complicated game but one worth playing. I for one, will not fully invest in my 401k for retirement since there are many, many other ways to protect and grow wealth.


Oil? Too many factors to consider. Around here, oil prices lag gas prices significantly. So, if I know its about time to fill the heating oil tank and gas prices start to climb, I pull the proverbial trigger and tank up. Last year, we had so many bad storms the driver could not make it down my driveway and I ran out of oil. The pellet stove earned its keep those 2 weeks.

 

[woodgeek]

I will make a useless prediction...

If the Saudis stay at max production (with the goal of bankrupting the frackers in the US, and other high-cost suppliers), then we will be in for a long bit of low prices (12 mos or longer).

If the Saudis blink, OPEC cuts production across the board, and prices should be back up in short order.

The frackers are putting on a brave face and bragging about their efficiency and new low cost of production, but the fact is that a lot of them had 12 month hedges on their sale price, which are just starting to run down now. Also, factor in cost of shipping by rail...from ND I have heard it is as high as $20/barrel. Gotta hurt at $40/barrel.

The Saudis move last Thanksgiving is costing them $0.5B per day, but they are smart enough to not expect instant gratification. The word is that the Saudis are surprised how well the frackers are holding up, but having spent $150B already, my **guess** is that they will not cave soon, but carry on.

 

[mass_burner]

Isn't that approach a bit short sided? Let's say the crackers do go belly up, and oil goes back up. Once its up again, new fracking companies will start up again.

 

[woodgeek]

Isn't that approach a bit short sided? Let's say the crackers do go belly up, and oil goes back up. Once its up again, new fracking companies will start up again.

Could. Depends on the price, future projected demand, and how ticked the counterparties holding the bad bonds are.