RE:RE:RE:RE:RE:RE:Profitable oil"BNK should be able to wait this storm out". The problem is US is still increasing its oil production big time even with WTI at $50. They just released US oil production this week. Again its up Vs last week. My feeling is many US oil shale Cos can be profitable with WTI $50 thats why they keep increasing big time their oil production. So dont expect US oil production to decline in the future. You also have few countries who are waiting higher price to increase their production. So overall we will have plenty of oil that can be squeeze out of the ground in the future.
Regarding the demand, I dont expect any miracle. EU is sick, their oil consumption will keep on declining. US and Japan oil consumption is also declining because of more efficiency cars.... China is slowing big time. Overall I forecast little oil demand worlwide over the next few years (between 0.5-1MMbpd increase every year). IAE seems to share my point of view asthey forecasts 1.5-2MMbpd oil surplus in Q2 of this year and $55 oil this year, $65 next year and $65-$70 longterm. The positive for us is BNK can generate small Cash Flow with oil at $65 so at least they can keep their production flat. without increasing their debt.My target is BNK at $4 in 3-4 years so still 30% potential profit a lot better than government bonds :)
Keep my BNK longterm.
Kee