Nov 302014
 

14-11-oil-price-low

I’ve had a decent month resulting in a wealth gain of $5,800. Mostly thanks to my investment gains. I received $200 of interest payment this month from my Sherritt high yield bond, with an 8% coupon, which I blogged about how to buy earlier this year.

The price for a barrel of oil has fallen in the last 3 months from $94/barrel to just $66/barrel. This capitulation is no doubt caused by an oversupply of oil on the global market and a slowdown of demand in Europe and Asia. It looks like oil exporting countries are facing a crude predicament. 😉 Last week the Organization of the Petroleum Exporting Countries (OPEC) held a meeting to discuss its operation plans. OPEC is an oil cartel, represented by 12 countries in the middle east, Africa, and South America. Together this organization produces about 1/3rd of the oil supply in the world. Due to its large influence OPEC can single handedly change the price of oil in the world by increasing or decreasing its member’s oil output. During its recent meeting the cartel has decided to maintain its production levels at 30 million barrels a day. OPEC is trying to price North American oil producers out of the market.  

The decision was largely unexpected by investors. Keeping oil production high means more oil supply on the market so this news has caused a large drain on Canadian and U.S. oil stocks. I hear drilling for oil tends to be a boring job. 😀 But if these low energy prices continue then we could see less hiring in the oil sands and Bakken area, which will stifle economic growth. 🙁  I’m not in any rush to buy more into energy companies just yet. I think low oil price will be the norm until middle of 2015 at least. Instead I am looking at other sectors of the economy for growth opportunities. Financials and telecommunication stocks on average are both up 8% over the last month alone. That’s almost 100% annualized return. The consumer cyclical industry is doing well too, up 13% in November alone. These are companies like retail, drugs, food, beverage, etc. such as Dollarama and Tim Hortons. 🙂

*Side Income:

  • Part-Time Work = $500
  • Dividends = $400
  • Interest = $200
*Discretionary Spending:
  • Eating Out = $100
  • Others = $100

*Net Worth: (MoM)14-11-fiscal-update-net-worth

  • Assets: = $835,700 total (+3,700)
  • Cash = $2,000 (-600)
  • Stocks CDN =$87,400 (+2000)
  • Stocks US = $53,800 (+1200)
  • RRSP = $50,500 (+1100)
  • MICs = $15,000 (same)
  • Home = $254,000 (same)
  • Farms = $373,000 (same)
  • Debts: = $519,400 total (-2,100)
  • Mortgage = $196,000 (-300)
  • Farm Loans = $203,900 (-400)
  • Margin Loan CDN = $27,200 (+200)
  • Margin Loan US = $24,400 (+500)
  • TD Line of Credit = $30,400  (-300)
  • CIBC Line of Credit = $10,800 (-600)
  • HELOC = $18,200 (-200)
  • RRSP Loans = $8,500 (-1,000)

*Total Net Worth = $316,300 (+1.9%)
All numbers above are in $CDN. Conversion rate used: 1.00 USD = 1.14 CAD

My retirement fund was able to withstand the beating of oil stocks over these last few months because I maintain a diversified portfolio. I just want a large nest egg when I reach financial freedom. If one type of stock underperforms I’m sure another type will make up for it. Oils well that ends well. 🙂

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Random Useless Fact:
The Swiss are like Dwarves because they live in the mountains, collect gold, make intricate machinery, and aren’t concerned by the wars of men.

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Investing Pursuits
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Liquid,

The price of a barrel of crude will likely stay in the 60-75 dollar range the the next 6 months at least. OPEC will not meet again until another months. I expect to see further declines in the price of oil before we have reach a bottom.

Congrats on the increase in your net worth. The decline in the share price of all the companies in the energy sector has decreased the net worth of a lot on investors.

DivHut
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I added to a financial name this month along with a consumer staple. BNS and KRFT have been my buys for November. I know almost every other DGI blogger has been buying BP, TOT, CVX, XOM, BBL, COP and the like but I am still on the sidelines with those sectors. Nice dividend income for the month by the way 🙂 Thanks for sharing and look forward to your next update.

Not Working
Guest

Bought alot of oil companies friday

BP, TOT, RDS.B, SU, XOM, CVX, COS, COP

Now let’s pray for a quick recovery 🙂

PC
Guest
PC

The Saudis are very prideful and show that they have the best production. They will keep pouring out oil and want Americas , Russia oil suppliers suffer with low crude prices. I actually bought more oil stocks on the way down and did not foresee this decimating turn of events for oil. Its certainly has put a strain on my portfolio but hopefully it won’t go even further down.

TheEighthDigit
Guest

It’s funny how we got an almost 33% drop in crude price while the price at the pump went from 1.40 to 1.21. Look like someone is gouging.

Grats on the networth increase, it’s always nice to see those green numbers 🙂

Asset Grinder
Guest

Nice gains man. That sherrit bond u hold makes me nervous as hell tho! lol. I guess I should be just as worried with some of my own oil stocks in return. lol. Time will tell how much we get this cheap gas for.
Quick random factoid. Gas In Victoria are is usually about 10 cents cheaper than metro Vancouver prices. Auto Insurance is about 50% cheaper here as well.

Two Degrees
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Two Degrees

Grrr!! I hate watching my stocks drop! I’m still pretty much a noob at all investing, but I suppose there’s not much else to do but sit pretty for now.