Discussion
For quite a while I've been a fan of oil, RDS to be precise. It was great for years and famous for its dividends.
But now the shares are 50% down and the dividend is borked. One or other I can cope with but to lose both is irritating. I can easily hang on for better times, because the world needs oil, and CV will pass, but I wonder what the time-frame will be? Will we see shares coming back to previous levels and dividends restored? Or will oil be next on the list after slavery as 'activists', who seem to have far more clout than brains, bully their way past the silent majority into some imagined brave new world?
But now the shares are 50% down and the dividend is borked. One or other I can cope with but to lose both is irritating. I can easily hang on for better times, because the world needs oil, and CV will pass, but I wonder what the time-frame will be? Will we see shares coming back to previous levels and dividends restored? Or will oil be next on the list after slavery as 'activists', who seem to have far more clout than brains, bully their way past the silent majority into some imagined brave new world?
Oil will be back imo, the world needs it as much as ever, hopefully the current price will kill off the some of the small US shale companies and we will return to a much more realistic price, lots of projects are on hold due to the current situation and there is a perfect storm brewing for the future.
Hold tight those glory days will return imo, hopefully soon but it may take longer than I'd like.
I was very heavily biased to oil when the Saudis cut off their nose, it still hurts....
Hold tight those glory days will return imo, hopefully soon but it may take longer than I'd like.
I was very heavily biased to oil when the Saudis cut off their nose, it still hurts....
Simpo Two said:
But now the shares are 50% down and the dividend is borked. One or other I can cope with but to lose both is irritating.
The share price is a consequence of the dividend cut and it being perceived as an ex growth share, so the share's attractiveness depends on the dividend yield. Few companies manage to significantly cut their dividend without a large share price fall.How fast it comes back is a function of how much the new normal resembles the old normal with regard to tourism and business travel, how fast you think that return will be, and how well the NOCs can control extraction rates, when they'll be under pressure to increase their sales to get the national budget deficit under control.
If you think OPEC et al can control production rates effectively again, then oil prices will rise and there's hope for the dividend and hence the share price. If you think they'll be unable to exhibit much discipline, then that's probably a larger factor affecting oil prices than activists who quietly ignore all the petrochemicals that their lifestyle requires.
Dunno. I too have held a lot of RDSB for some years enjoying dividends.I managed to pick up another £10k at sub £10 a share which helped bring my average down to £14 odd. How many years will it take to get back to high teens ? 1 or 2 years post lockdown maybe ? Im sure OPEC will doing everything within its power to get the price of oil back up once the virus situation improves.
Im done with putting any more into oil though, got too much exposure to it, there are so many other post C19 recovery plays out there to spread investments around.
Im done with putting any more into oil though, got too much exposure to it, there are so many other post C19 recovery plays out there to spread investments around.
At the moment there is a huge oversupply, despite recent OPEC attempts to control it.
Longer term Covid has done a huge amount to push the world away from its oil dependency. The central government funding from nearly all countries will be towards cleaner and greener sources of power. Airline travel will never be the same again.
However, these lower oil prices will put pressure on the expensive US producers of shale oil and the tar sands producers in Canada. Many of them will not survive, which should allow Shell and other producers of lower cost oil to benefit.
Also remember that RDS are hoping to become the worlds biggest energy company. They already own electricity suppliers around the world (inc the UK) and a lot of their investment is away from oil, towards electricity. They see that as the future, but need the cash from oil to fund their other investments.
Longer term Covid has done a huge amount to push the world away from its oil dependency. The central government funding from nearly all countries will be towards cleaner and greener sources of power. Airline travel will never be the same again.
However, these lower oil prices will put pressure on the expensive US producers of shale oil and the tar sands producers in Canada. Many of them will not survive, which should allow Shell and other producers of lower cost oil to benefit.
Also remember that RDS are hoping to become the worlds biggest energy company. They already own electricity suppliers around the world (inc the UK) and a lot of their investment is away from oil, towards electricity. They see that as the future, but need the cash from oil to fund their other investments.
Condi said:
Longer term Covid has done a huge amount to push the world away from its oil dependency.
I'm not sure I agree. CV simply reduced the amount of oil needed by a large amount, very quickly. Hence the oversupply (plus the Middle East/Russia willy waving). The world may be 'pushed' towards eco-wotsit by green babble, some sound, some b
ks, but that was happening anyway - and with little thought as to how all the magic new electricity is going to be commercially/affordably produced, infrastructure etc.Gassing Station | Finance | Top of Page | What's New | My Stuff