oil Archive

3

Taking Oil Speculators and Our Government to Task

By
Andrew Montero
– September 8, 2011
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By Andy Montero

     With the recent drop in the markets, oil prices took a considerable drop as well. We have seen oil prices drop from around 100 bucks to the low to mid 80 dollar price lately. One very noticeable situation has many a consumer annoyed though, as the pump price for gasoline has not dropped correspondingly with the drop in the price of oil. Say what you will, but when oil was going up, the general public watched in horror as the pump price for gasoline flirted with and above 4 dollars in some regions of the country. When oil came down to the low 80 dollar range, it was time to see gasoline drop under 3 bucks. Percentage wise, this was the right price to see. Instead, we have seen gasoline prices hold steady and not drop very significantly at all once they bottomed around 3.50 or so. There may be slightly cheaper gas in some areas, but in general the price has remained above 3 bucks.

There has been no outrage, no political posturing, just a general acceptance that it is what it is. In my opinion, there needs to be some anger and some phone calls made to your elected representatives offices. Those who make a killing speculating with oil are conditioning us to accept whatever they feel like doing. It is borderline criminal that gasoline is over 3 dollars a gallon at this point and totally unacceptable. These prices have caused every company that makes every product or grocery we buy to raise their prices to reflect the higher cost of fuel. Additionally, with jobs paying less, workers and their families are feeling the effects in their commutes and their everyday lives.

If we allow ourselves to be conditioned and do nothing, then we have no one but ourselves to blame. It is time for all of us to speak loudly and demand that gas prices and speculation on oil be thoroughly investigated. Each and every time there are complaints, we are pacified short term only to be screwed over again. We each need to let our representatives in Washington know that we have been paying attention and that we have had more than enough money stolen from us over the course of the past three years. It is time for action unless you think sticking your head in the sand and allowing yourself to be robbed in plain sight is okay. This country has more than enough resources, including oil, to be self sufficient and to ease the ridiculous price of gas on American consumers. It is time to start worrying about the US of A and there is no credible reason to continue the current course of action and allow our nation to be held hostage by OPEC and the Fed. I will add that environmental concerns are valid and need to be minimized, but in no way should they be allowed to prevent the United States from energy independence. It is time to take back our country and regain our standing. No better place to start than with the ridiculous shenanigans taking place with oil. Sorry OPEC that deal certain members of our government made with you so many years ago….its over, we are sick and tired of being abused for the greed of a few!

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1

Bottomed and Moving UP For BP (NYSE:BP)

By
Andrew Montero
– July 8, 2010
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Over the course of the last several trading days, a bottom appears to have formed for BP, the much maligned oil conglomerate.  The company is experiencing a nice rebound right now as shares are trading up over $33.00 in regular trading hours today.  Royal Bank of Scotland changed their hold call to a buy recently and there was more good news, as there seems to be a third ship to capture oil on site at the spill location.  Reports have it being hooked up within the next day or so.  This will effectively double the company’s capacity to capture leaking oil.  Also of note, BP says they are still a week ahead in drilling their first relief well in spite of recent bad weather.

Of course there is still lots of negative news regarding the company for anyone wanting to find it or listen to it.  Much of it is rehashed over and over again for your listening and viewing pleasure.  Funnily enough, the media more than BP, has caused a lot of the financial loss in the Gulf States.  There were plenty of warnings about oily beaches for weeks…but mostly a few scattered areas of tar balls is what has been seen save for the Louisiana coast.  Weekend news programs showed several beaches along the gulf with few visitors, but lots of white sand.  Readers take that for what it is worth. The one area that really seems to be heavily affected is the Louisiana coastal area and corresponding marsh areas.  As time continues to pass, it is becoming increasingly evident to all;  who it was that really failed us as citizens of the United States, and that was MMS and the United States government, who failed to ensure permits for the deepwater horizon rig were properly issued, and also failed to ensure that BP had a cohesive and comprehensive emergency plan in place that was executable under the extreme circumstances that occurred.  To that regard, it seems that all deepwater drillers have failed to varying degrees, with none actually having an executable and comprehensive plan in place for any disaster similar in scale and magnitude.

At this point in the stock price, I see the bottom in at around $29.35 with potential upside over $40 dollars mid to long term.  The next few days will be interesting to see if BP shares can stay above the $31.25 mark and possibly continue  the  push higher. I also see the max cost of this sad tragedy somewhere in the 30 billion dollar ballpark, depending on when the well is actually capped.  The cleanup, while not perfect by any means, has succeeded in keeping the majority of the oil off our shores to this point.  Let’s hope fishermen don’t have as terrible a situation as originally feared, and that by next season, some normalcy has returned to gulf coast businesses.  Caution is the word regarding this equity situation, however, I think waiting any longer is nothing more than a loss of potential profit, the worst is over if you have been paying attention, and I expect the news to become increasingly less hostile in tone, with a few good news scenarios in the short to medium term.  As always do your own due diligence.

 

Disclosure: Long BP

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9

British Petroleum (NYSE:BP) Bashed But Still Viable Despite Negativity

By
Andrew Montero
– June 14, 2010
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Shares of British Petroleum (NYSE: BP) continued to topple last week into Wednesday as the US government further enflamed an already ridiculous pissing match.  Everyone already knows the tragic situation unfolding in the Gulf of Mexico, not to mention the loss of 11 workers who died trying to make a better life for themselves and their families.  That said, the government has gone out of its way to seemingly throw gas on a bonfire.  Among the culprits, one Ken Salazar, who audaciously made the assertion that BP should have to pay for all oil workers jobs in the Gulf that are lost due to the disaster and the coming moronic halt of drilling in the Gulf by the U.S. government, which can only be described as the ultimate in micro-mismanagement and nearsightedness.  A knee jerk reaction to a serious problem, but one that makes little common sense once you look at the situation.  Certainly the continuing flow of oil in the Gulf is a major problem.  The death of many forms of marine life and plant life due to poisoning and suffocation from the oil is a horrible situation as well. Obviously BP needs to not only stop the oil from spilling into the Gulf, but they also need to compensate people whose incomes have been affected or destroyed by the situation and show some remorse, not make commercials to try and sway opinion.   The PR firm hired by BP has been one giant horror show with blunder after blunder.  Of course, our own US government and the President himself have been just as out of touch with reality on the ground in Louisiana.  Micro-management does not, has not, and will not work.

Taking a deeper look at the situation, several questions emerge.  Why has the President not met with BP CEO Tony Heyward, nor spoken to him?  Why is Halliburton, which performed the cementing work on the well hours before the explosion, and other companies involved with the situation being avoided in discussions regarding compensation to fishermen and repair of the damage to the environment?  Why is the US government attempting to decide whether a non U.S. company pays its shareholders a dividend? These are just a few of the questions that need to be answered.  The daily onslaught of negative news regarding BP from the media and the government has been shameful at best and borderline criminal at worst.   BP has lost more than half of its value; over 100 billion dollars in market cap in less than two months due to this accident and the ensuing constant negative news highlighted by the minute.  This I cannot understand.  Did the government force the Banks and the financial markets to compensate all the

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