$80 oil to $72.50 in a week? ....... & Stock for 'Nukester' This is fascinating.
Almost -10% drop in spot price after OPEC+ meeting resulted in "gradual lifting of voluntary production cuts"
Yet we are already back at $78 a few busines days later.
Speculators are behind the frantic activity:
"Hedge funds and other money managers sold the equivalent of 194 million barrels in the six most important futures and options contracts over the seven days ending on June 4."
https://energynow.ca/2024/06/commentary-opec%E2%81%BA-surprise-triggered-record-hedge-fund-oil-sales-john-kemp/
If we were expecting prolonged recession, sure, price action was justifiable.
In this case, misinterpretation of OPEC+ comments whipsawed Hedge Fund managers right out of their shoes.
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Nukester et al,
If any of you Oil Bugs are looking for a cute "long-term hold" Canadian Intermediate oil co, the one to sniff at is Headwater Exploration (HWX).
https://headwaterexp.com/
With any and all resource businesses, there's plenty of volatility and higher risk.
So this stock pick is ONLY for those seeking direct exposure to small cap Canadian O&G.
Plenty of upside if you can stomach the volatility.
Gotta own it 3-5yrs on the old wine rack before you open the bottle.
They are hammering away in the Clearwater formation, the sandstone on top of the McMurray formation, heavy oil trapped in what's called a cap rock, shales and mudstones.
Oil is there, they are already expected to average 20,000 barrels of heavy oil per day production through 2024, and maybe 22,000+ in 2025.
CEO is a champ, has built and sold 3 juniors prior to HWX, Neil Roszell from Sask.
My guess here is that they will eventually sell HWX and immediately spin-off some non-core operating assets and start the process again.
Upside here from $7 could be north of $10 at current oil prices.
At higher oil prices, well, much higher upside.
But like I've said before, don't buy it if you can't hold it.
Needs 3-5yrs to mature.
Don't bet the farm either.
This is higher-risk energy exposure.
Wouldn't go higher than a 2% equity weighting.
In the end, Gamehost is much lower risk and has exposure to this oil region. Nothing wrong with buying more GH, the hidden Alberta-linked GIC holding. Only problem is you have to call Kasking's trade desk to get a few shares!