July 24, 2021

10 thoughts on “Oil Price Effects – Ezion, Swissco, Nam Cheong, Vallianz, Keppel & Sembmarine

  1. A very detailed analysis, offshore and marine stocks are cyclical and I am also not in favor of buying O&M stocks, even if present prices present are attractive.

    1. Hi Tom x3,

      Thanks for the comments.

      It's about Top Down vs Bottom Up. Top Down is easier to understand while Bottom Up requires more in depth analysis and understanding of the company and market. No right or wrong for both approaches.

      Agree that O&M is cyclical and we should exercise caution now. This is especially when you are not familiar with what you are investing.


  2. Rolf,

    I think you have just jinxed the sector 🙁

    Just look at the price action of O&G plays this Monday!?

    Just kidding 😉


    1. Hi SMOL,

      Haha. I am not so influential even if it's a "jinx-ful" manner.

      I am not Ding Xie and does not have the "Ding Xie Effect"


  3. Hi Rolf,

    Based on your analysis, offshore and marine companies with exposure to NOC contracts has a higher chance of surviving the next couple of years of relatively low oil price?


    1. Hi Naro,

      Thanks for visiting again. Yes NOC contract and shallow water sector but not Jack up. I prefer liftboat and OSV. The abundance of Jackup delivered in the last 2-3 yrs require OSVs. Pessimism of oil price effect will be delayed. And hopefully by then optimism will set in again because I see OPEC price reduction as temporary.

      Having said so, oil price dipping still overshadow. It is just like property sentiments, Oil majors know price is low, they will try to squeeze margins of the supply chain down..

      While O&G is cyclic but I think the current dip in prices is related to a "over-supply" intentionally created by OPEC. It is necessary to re-balance the over production of shale gas. Also I reckon that China consumption drop is temporary. China is re-organizing themselves and will become strong again with urbanization and further population growth (young ones)!

      Also unlike in 2008/9, where I personally gone through in my career, there is no euphoria in Oil price. In 2008 oil price peaked to usd150 a barrel and fundamental is weak, with so many speculation couple with irresponsible financing from the banks! The situation now is different!

      Just my thoughts. I definitely can be wrong.

    2. Hi Rolf,

      Its always important to hear the views of the people in the industry!

      I think the demand for O&G is fundamentally strong in the long term. Urbanization is not just in China, its going to happen in India too, albeit with some doubts. A lot depends on the current Modi government and the implementation of its plan to increase manufacturing contribution to India's GDP from 15% to 25%. If successful, it's going to be a huge push for energy!


  4. Hi Naro,

    Oil is after-all finite. Shale gas is unlike natural oil fields, they had shorter life or at least not tested to have long life, and also more complicated to extract. Moreover health hazards exist according to experts. Ultimately, demand in the world will outstrip supply again as population grow. China and India will lead consumption again.

    Question is – When? LOL


    1. Hi Rolf,

      Patience. Just be patient. Surely, I will catch the up-circle once in my lifetime. 🙂


    2. Hi Naro,

      Agree with you. Let's be patient.
      Some wise men says it's better to nibble over time, not swallow at one go. I think it makes sense!

      🙂 Rolf

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