One very good reason to be bullish on Oil

I mentioned mid December that I was bullish on oil, and I started to grow a position in various oil and oil-related commodities/stocks.

Now that the quarterlies season has started, here's what I've noted so far:
What is interesting here is not that Exxon, Shell or Chevron made money or even that their profits dropped, this is normal. What is very interesting, is that companies which didn't hedge their production made big losses. This means that the current prices are below the cost of production, and that huge losses like these are not sustainable. The consequence should be a major rise in prices of crude.

If you have seen some other major oil companies that I missed, please post a comment.


NMMM.NU said...

I believe the oil production price is 70-80.

This is what I just read from Jesse

The Cost of Oil Production By Region and Volume

pej said...

Many thanks, this is a very interesting chart.

It doesn't mean that the cost of production is 70-80 but rather that at 40$, only the middle eastern countries and Russia are able to make any profit selling their oil.