Hey Saul with the price of oil down to around 88 dollars a barrel what do you think about Pfie? Do you think they might start slowing down because fracking might slow? Are you still watching it?
Andy
Cast off any ideas that the slump in the oil market is a reflection of slowing global growth. Apparently, that doesn’t matter.
How do I know? Last month I met with Professor Ben Jacobsen, head of financial markets at Edinburgh University Business School. He gave me a copy of a paper that he and two other economists wrote on the oil market. They based their research on close to three decades of market data. It was published in the Journal of Financial Economics in 2008 and authored by Gerben Driesprong and Benjamin Maat as well as Jacobsen.
Given that oil prices have skidded more than 20%, we should expect a 2% bump in stocks, if the relationship found in the study continues to hold true.
The big takeaway: An oil-price decline in one month “indicates a higher stock market return [the] next month,” the report says.
It gets better: The bigger the oil-price skid, the bigger the stock-market bounce should be
http://www.marketwatch.com/story/stock-investors-should-be-c…
Robert
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Given that oil prices have skidded more than 20%, we should expect a 2% bump in stocks, if the relationship found in the study continues to hold true.
The big takeaway: An oil-price decline in one month “indicates a higher stock market return [the] next month,” the report says.
I agree with you Robert that this will be good for the overall economy. I do not think that low oil prices are bad for the economy, on the contrary it should make everything cheaper because everything is impacted by oil prices.
Pfie is in the Oil Sector and provides a way to flare wells that are fracked. If they slow down the fracking it could hurt Pfie and that might be why it has been drifting down. The whole oil sector may slow down if the cost of oil stays down. But if you look at all the commodities right now they have been drifting down, except for coffee and beef, which should help all the consumer driven companies like CMG and BWLD. Just a thought.
Andy
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I agree that less tracking would possibly hurt PFIE. But on the other hand, their penetration is so low that it may not make any difference. Also, they have a value proposition. It saves the oil company bunches of money. So who knows?
Saul
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Some of the wells in fracking country are profitable only with oil above $80 or so.
However an oil company may be willing to drill a no profit or modestly money losing well if needed to retain drilling rights on a good lease block. We saw that happen when natural gas prices collapsed a few years ago.While the well drilling won’t drop off a cliff, it will decline.
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I don’t think that oil prices will impact PFIE. Changes to regulations will be a driver for increased use of Profire products and they have limited penetration in the US. I added to my position today.
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I don’t think that oil prices will impact PFIE. Changes to regulations will be a driver for increased use of Profire products and they have limited penetration in the US. I added to my position today.
Hi Chris, I also have added in a limited way to PFIE in the past few days.
Saul
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