In my last two columns for Oilprice.com premium subscribers, I was first very clear in the opportunity I thought I saw coming in oil stocks. First, I outlined how oil companies had finally retreated from full-speed-ahead capex increases, looking to raise production into an oil environment that hadn’t been able to support it for the last two years. I also pointed out that this retrenchment had come in a unified way from oil companies, continuing their lemmings-like behavior of rather bad decision making during this entire oil bust.
The opportunity arose, I argued, because it seemed to me that the oil environment was finally, in fact, ready to improve – oil stockpiles were finally dropping below 5-year averages and declining steadily, and rig counts were due to decline as well, after so many months of sub-profitable oil prices.
All of this led me to believe that we were seeing a unique moment to get some quality oil stocks at value prices.
Two weeks ago, I further supported this thesis with the supposition that the Gulf Coast storms would actually accelerate these trends, going against virtually every other oil analyst out there, including an alert from Goldman Sachs claiming the storms would have a far greater impact on demand than supply.
It’s not turning out that way.
In the end, those alerts turned out to call the interim bottom in oil and oil stocks. We are starting to see acceleration in the very targeted Permian stocks I…