Mid November Low in Oil Likely

Tuesday Oct 8, 2019

There are numerous clues that a cluster of cycles will converge in the oil market at Mid November this next month.

I suspect that will see WTIC re visit $42. 

Such lows occur amid negative social mood. This is also typified by energy service stocks trading at discounts to book value.

Firm            Symbol           Share Price as a % of Book Value 100% =1.00

XES Energy Service Compoonents

Baker Hughes           BHGE            .64

Core Labs                  CLB                10.

Helemrich and Payne    HP               .99

Technip                        FTI                .92

Patterson                    PTEN                .49

Halliburton                    HAL            1.2

National Oilwell        NOV                .94

Schlumberger            SLB                 1.2

ProPetro                    PUMP            .41

Nabors                    NBR                    .24

Only three issues are trading above book value. PTEN is probably the best proxy for Texas Service at 49%.

Shale producer Abraxas is trading for 38 cents f 41% of book.

 

These low valuations are typical of what occurs at extreme market lows.

I suspect the triple bottom will not  hold here and we return to last December low at $42.  XES is trading under $7. Nabors is trading for a mere $1.59.