RE:RE:COS Stakes Future on total Uncertainty
I've been away a few days, nice to be back and see this board full more substantive talk about the company.
In terms of SP direction in the short term I think we can all agree that it will depend largely on where WTI goes. If you think we haven't seen bottom, then COS is going lower. If oil begins rising, COS is going up. Simple as that.
I'm leaning more toward groupguru's assessment of COS but by no means do I think the company is worthless or won't be good in the long run. But what really irks me here is the continuous operational issues at Syncrude (they've been at this for how many decades now and can't get it right?), the high debt, the fact that operating costs were $49 in 2014, and a now miniscule dividend. At this oil price, COS is losing money.
I personally don't think we've seen bottom in oil yet. My reasons:
-Saudi record output (with no cut coming in June)
-Chinese storage very close to capacity
-US storage getting close to capacity (next 6-8 weeks)
-Potential Iran deal close (they have close to 40M barrels on tankers alone right now and can increase supply by 1M bpd very quickly. 2M bpd by H2 2015)
-Chinese manufacturing is contracting (lower growth rates, less energy intensity)
-3000 uncompleted wells in US shale in some of the most prolific areas simply awaiting better prices
-Refineries are coming to the high point of maintenence season
Feel free to debate with me why you think despite the reasons above, oil will continue higher. Obviously there's smart people on both sides of this. Noone can say for sure. That's just the bet I am making.
Full disclosure I have been short COS for the past week. Obviously not going my way right now but I still have faith haha. I'm playing with house money anyway after my last short from Feb-Mar.