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Discussion Starter #1 (Edited)
So recently have heard rumors about Russia and Saudi Arabia trying to cut down oil production so the price can go back to at least $50 a barrel of Brent. Saudi Arabia has a public deficit above 18% and Russia around 9%. Completely unsustainable for the ex-Comunist, but also for the Royal family of Saudi Arabia, that has been forced to make some changes in their policies of investment due to a lack of cash. Sounds crazy, but this family has been wasting money all their lifes and have been investing without any sense... For example it is still in process of construction (having many delays due to financial and organization problems) the fast train from Saudi Arabia to Meca, where all muslims are willing to go at least once in their lifes... this type of trains are required a high volume of passengers in order to be profitable (millions of people a year), and NOT all muslims that visit Meca travel from Saudi Arabia... they know it is going to be a deficit every year from that investment, but still want to build it.

Oil has to rise its price, not only to help the Arabian`s Royal family economy... Russia, Venezuela, Iran, The US, Canada, etc, etc, etc... It has been already too long, and countries can not afford it any longer. We are going to see the oil price rise soon... National Oil Reserves are full around the world. All countries have saved cheap oil. There has to be a little shoretage so price start to go back up and these reserves a bit down...

American OIL companies that can be very interesting to invst in right now:
- APC Anadarko Petroleum Corp. has lost a big chunk of its value in the past 2 years, if oil starts to go up their shares will follow that trend.
- VLO Valero Energy... Same thing, Refiner oil company with a big potential due to massive reserves bought at very low prices, using the fiancial product of FUTURES, That is how these type of compant make money...
- MPC Marathon Petroleum Corp. Same thing. Has to double its price if Oil goes back to $65-$75


An other company to have in consideration but it is NOT American. It is European, based in Spain. We all know Europe has been hit by a stronger recession than the US due to its political structure not being federal... they are weaker in few words to apply real economy policies.
So there is this company called REPSOL, based in Madrid, that is property of the main Spanish Banks with up to 70% of its shares in hands of them. So these banks relly on the dividend that Repsol has been giving from the past years... even though OIL prices are low, this company had a lot of cash reserves to pay for these dividends banks need. This company has been very penalised with a bearish pressure, falling the shares to 8 EUROS (Now at 10€ already) while paying a dividend of 1,2 Euros... Investors where very skeptical about it, but now that oil price seems that will go up, it is a very good oportunity to make around an 11% profit on Dividend and see the share price at around 15 - 20 Euros in a year or so... now that Oil price could recover, the value of Repsols shares will rise exponentially. Im sure about it.
 

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Yes oil will rebound, we're already seeing it.

"The best cure for low prices is low prices"
-great quote, not sure who originated it
 

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However, there will be a reaction to the downside in the not too distant future. I can sense short sellers drooling. But in general I agree, we are inching toward a balanced moil market, it just won't get there in a straight line.
 
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