I feel like we're reaching a “sell the news” moment for oil now. While Devon CEO says he's committed to remain discipline — i.e. no over drilling, it is unclear that the rest of the world will be as disciplined. I'm worried there will be overproduction of oil six months from now. Maybe this is the right time to sell?
Some questions:
- How low can oil prices drop and still allow Devon to pay their 6% dividend and Chevron to pay their 3.4% dividend?
- If you have to pick one stock between the two to pick, which one would you pick and why?
- How disciplined do you think Devon and Chevron will be in terms of resisting the urge to over drill?
- Do you think the world will soon (in 6 months) be flooded with cheap oil? What price do you see oil going to 6 months from now?
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