The asset write down comes at a bad time because Chevron is making less money. For instance, Chevron’s gross profit fell from $16.968 billion on 30 June 2019 to $15.175 billion on 30 September 2019.Read more
The danger to companies like Chevron is that oil is slowly becoming a bulk commodity with a low value. Companies will still make money in the oil business but profits will be far lower because prices will be low.
Instead, oil producers like Chevron will be more like miners such as Rio Tinto Plc (NYSE: RIO) with lower share prices and less cash. RIO was trading at $57.82 a share on 14 February 2018 while CVX was trading at $112.14 a share.Read more
Expect to see a vast amount of consolidation and centralization in oil in the near future. This means that a lot less money will be made and many investors will abandon oil stocks completely in the years ahead.Read more
A long term threat to oil companies is electric cars. They’re coming fast and not just from Tesla, Seeking Alpha contributor Anton Wahlman calculated that 143 electric vehicles are scheduled to hit the roads by 2022.
The big year for electrics will be 2022 when 115 electric models are scheduled for rollout. Although there might not be market for those vehicles the biggest electric producer; Tesla Motors (NASDAQ: TSLA) has yet to sell 100,000 cars although that might happen this year.Read more
All this should prompt us to ask the question: is Exxon-Mobil’s business sustainable? Can any company even Exxon survive such massive losses in revenue and net income.
There is no good answer here because we have never seen a company take such losses and survive. Nor have we seen a company suffering such losses keep rewarding shareholders so generously.Read more
Gold, gold futures and gold-based ETFs. The precious metal went on a roller-coaster ride in 2016 rising to a high of $1,366.54 an ounce on July 7, but falling to a low of $1,128.90 on December 20, 2016. That is likely to be reported in 2017 with many investors taking big losses. Sinking currency prices in India and China are likely to drive gold prices by reducing the buying power of gold investors in major markets.Read more
The oil industry will survive the coming of Hyperloop and electric cars; but it will look nothing like the one we have known. Instead it will be smaller and only a few companies in it will make money. Smart investors will stay out of oil for the foreseeable future, unless they are looking for something to short.Read more
Just four or five years ago the collapse of a major oil company was a concept for the realm of science fiction. Today such an occurrence is well within the realm of possibility because of the falling price of oil.Read more