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I bought a trance of 100 shares about a month ago right around this price.

The thing about Suncor is their PE is okay right now at this price but they have reserves which will last decades and they will still be producing when others have run out of reserves and prices are much, much higher.

I'll buy some more if it dips to $25.
 

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I started buying SU last month. This will be my 4th ride. As mentioned those oil sands are still there and SU is the big player. Will keep buying and avg. down until I run out of money.
 

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Discussion Starter · #7 ·
Would be curious to hear what other CDN stocks you are aggressively buying. I've added a few to my watchlist and just went over every CDN stock in the Dividend Aristocrats List.
 

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Discussion Starter · #9 ·
Most agree XOM is a decent longterm value buy at these levels as is SU. But I'm waiting for further sell offs in the broad market and the corresponding oil market before adding and initiating positions. I feel there has to be another dip when Greece defaults. XOM has an average P/E of around 11 so it's not as if it's on a massive selloff, but it is trading below historical P/E ratios and div yield ratios. But the two are valued differently, with a lot more future growth tacked into SU valuations.
 

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Would be curious to hear what other CDN stocks you are aggressively buying. I've added a few to my watchlist and just went over every CDN stock in the Dividend Aristocrats List.
I am still undecided about new CDN additions, but I'm looking at those below their 52 week low, like CNQ/CP. I had not wished to increase my list & simply wanted to accumulate, but at these prices, it is impossible to pass.

Also adding to existing positions that are close to, or below their 52 week low [seems that the majority are there now]. :rolleyes:

Made my 6th SU buy today.

I sure wish I had more cash now. :(
 

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I bought some earlier around 29. I would probably add some more if it drops to 23 but I'm a bit heavy in energy at the moment. I know some people talk about diversification but I'm happy to guy what is out of favour at the moment. Oil will continue its long-term upward trajectory. Despite extreme negativity and high likelihood of recession we are sitting at $80/barrel. In the late 90s during a small boom it was trading around $20-25 if memory serves.

I think oil is back up to $100 again next year and is up over $150 by 2015 or so. We need to start taking energy efficiency much more seriously before we get caught with an economy that is too oil intensive.

That leads to my other investing thesis - uranium is just getting clobbered but it has great fundamentals too.
 

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WTI was $17 / bbl in 2001, CAD was at $0.6797 in 2001
WTI was $147 / bbl in 2007, CAD was at $1.1043 in 2007

That's some parabolic rate of growth. Do people think this is going to be like housing and proverbially "go sideways" for a few decades instead of bursting? lol sorry I find it really hard to understand the crazy dynamics in oil price.

I don't believe oil price going to whip around to $150 so quickly.

If the world economy actually worsens the most likely scenario is that oil will be treated like all other assets, aggressively sold at 2001 levels by highly vulnerable and heavily indebted oil producing sovereign's *cough OPEC* to generate cash. Take a lookie at the agricultural index to see what I mean.

IMO if governments truly believed in sustainability and alternative energy/transport, they wouldn't wait until the speculated market cost of oil grinded their economies to a halt, there would be a consumption tax to discourage using it and subsidise a move to renewables and improve public transportation like the London Congestion Charge.

Just because we may be reaching an exponential peak in the supply of oil doesn't mean that oil prices can appreciate infinitely, we'll get demand destruction and oil price will too follow the bell curve.
 

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WTI was $17 / bbl in 2001, CAD was at $0.6797 in 2001
WTI was $147 / bbl in 2007, CAD was at $1.1043 in 2007

That's some parabolic rate of growth. Do people think this is going to be like housing and proverbially "go sideways" for a few decades instead of bursting? lol sorry I find it really hard to understand the crazy dynamics in oil price.

I don't believe oil price going to whip around to $150 so quickly.

If the world economy actually worsens the most likely scenario is that oil will be treated like all other assets, aggressively sold at 2001 levels by highly vulnerable and heavily indebted oil producing sovereign's *cough OPEC* to generate cash. Take a lookie at the agricultural index to see what I mean.

IMO if governments truly believed in sustainability and alternative energy/transport, they wouldn't wait until the speculated market cost of oil grinded their economies to a halt, there would be a consumption tax to discourage using it and subsidise a move to renewables and improve public transportation like the London Congestion Charge.

Just because we may be reaching an exponential peak in the supply of oil doesn't mean that oil prices can appreciate infinitely, we'll get demand destruction and oil price will too follow the bell curve.

The thing that is putting a high floor on the cost of oil is that the marginal cost for each new barrel of oil is around $60 right now so oil can't stay below that for long before it increases - see what happened in the Great Recession where oil was below $40 for only a very short spell.

It may hurt countries that are importers economically but there is also no reasonable substitute for oil yet in transportation and there won't be in the next 20 years either. The battery technology isn't there for electrical and we still don't know how to do fuel cell hydrogen at a reasonable cost so we're stuck for a long time with high oil demand.

I know people talk about demand destruction in the US from oil imports but the US oil use has been in decline since 2008. The new demand for oil is coming from emerging markets and this will continue to grow for awhile as their incomes increase.

The other thing to consider is OPEC. Those countries need $70/barrel to avoid civil unrest so they will dramatically decrease supply if oil is weak to prop up its value and this will support the cost because there can only be so much demand destruction in our economies. When people talk about recessions they are usually talking about a 2-3% short term decrease in GDP so we aren't usually talking about a monumental contraction in economic activity.

If you want to talk about a commodity that can tank it's gold. It has no real industrial value and costs about $400/ounce to produce from companies like Barrick and Goldcorp so it's price can tank at any moment if the public's sentiment changes. The other thing is that gold isn't really consumed in any process so what is mined stays around basically forever so there is plenty of gold out there already.

So I'm happy to own the oil companies when the price plummets because I know it will come right back up.

I'm very interested in buying more assets like BP, RDS, CVX, CHK, SD, Total, IMO, CNQ etc. I already own some SU, MX, PBN, PSD (seismic company). I also plan on buying some of the drillers like SDRL which has a 10% yield right now and should have a very consistent business no matter the cost of oil.
 

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Suncor is reporting all their supply cash costs under $40/bbl, with in-situ bitumen at $16.50/bbl.

http://www.suncor.com/pdf/Fourth_Quarter_Feb_2011_EN.pdf

Saudi light crude used to cost $10/bbl in the 1990s, now their breakeven is $90/bbl and Jadwa is forecasting $321/bbl by 2030? All I can say is good luck with that.

OPEC nations plan their fiscal budgets around $60/bbl oil, that's not the price it actually costs to get the product out of the ground. These high prices have consistently made them overshoot spending and end up with double/triple digit billion dollar deficits every time there's a price collapse. Places like Libya, Saudi Arabia, Qatar should have thought about social unrest before spending trillions on gold plated toilets, with 50%-70% youth unemployment social unrest is invariable IMO. The OPECs are screwed.
 
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