Why I'm looking forward to quarterly earnings reports from the oil sector this year.
#1: some say the tax bill is the biggest tax bill ever passed. And it was not a bill raising taxes (like ObamaCare, a tax bill), but a bill cutting taxes. I can only assume every corporation in America is looking for all the goodies hidden in that bill. CPAs and lawyers will find things in this tax bill that no one else has noticed [
Update, January 3, 2018 -- Jim Cramer -- a must watch -- if you don't "believe" me -- his January 3, 2018 show.]
#1a: accelerating expense deductions (if a CEO is on the fence regarding
buying another truck or two or a fleet of trucks, accelerating expense deductions will certainly help the CEO make a decision)
#2: WTI above $60 will likely hold
#3: US oil companies will increase market share; Saudi Arabia and OPEC are losing market share.
#4a: competition from Venezuela and Canada may be less
#4b: with the Iranian situation now, could something significant happen in the Mideast this year that might disrupt the flow of oil?
#5: CAPEX has dropped considerably, and oil companies will still reach their contractual quotas (
exploration spending to fall just as WTI price rises)
#6: break-even costs continue to drop
#7: none of the major US on-shore shale plays are declining; I'm not even sure one could say any are mature; the Bakken boom may be over, but it certainly is not mature
#8: everyone's talking about the "synchronized global economy" -- all indications it will not diminish in 2018; demand for oil is increasing; the only argument is by how much
#9: even if everything stayed the same with regard to resources allotted: manpower, rigs, frack spreads; infrastructure; etc, the technology is improving; the roughnecks are better than ever; the geology is better understood -- all leading to better production from same amount of "hardware"/resources
#10: oil companies are not yet enjoying an explosive resurgence; they will manage their assets closely in 2018; when oil companies are making money "hand-over-fist" they tend to spend money inefficiently; I don't see oil companies spending recklessly this year
#11:
CNBC talking heads talk about sector rotation; oil sector is boom and bust; some argue that the worst of the bust is over
