Oil price looking forwardI'm a bit surprised at the enthusism there is to sell COS so hard. The reasons, the way I see it, are: uncirtainty over the NDP, lack of dividend and oil price outllook.
Right now WTI looks like it wants to go higher despite surplus on the supply side. Ironically this could be a long term negative. Oil supply going forward has growth coming from Iran, Iraq snd US Shale. US Shale is the most elastic and subject to price fluctuations. Unfortunately a alot of Shale is profitable around $60. If the price makes it to $65 more supply will come on the market. Notice the EIA monthly report shows US lower 48 supply increasing lately. So in a way the higher WTI price is actually bearish for long term WTI.
COS stock price may be pricing in a new reality of of an extended period, 2 - 3 years, where WTI is caught between max $75 and low $50. If this is the way the market is pricing COS then these lower stock prices make more sense. These kind of WTI prices make COS barely profitable and means no dividend and no capex for future growth. It puts stock price growth out to the future a far ways.
I firmly believe longer term oil will make it back to $100 or even $200. We would be there already were it not for US Shale. Short term I want to see lower WTI prices to set up a long term bull. If the oil market finally reacts to the reality of supply and demand it will go signifigantly lower from here. Right now though there is too much speculation in the oil market keeping prices high. Just like the internets - speculation can distort reality though long term reality rules the day.