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Oil price predictionCEO interview - Core Laboratories (NYSE:CLB) When a CEO with a great track record says that his stock is misjudged by the market, it is time to listen to him. Core Labs reported a poor quarter three months back and the stock got slammed by 10.7%. Since then, the stock is up by 40%. It went higher on Thursday after the company reported a great quarter. Core Labs is a provider of reservoir production enhancement and management services to the oil and gas industry. Does the turnaround of Core Labs signal higher prices for the oil patch? Cramer interviewed CEO David Demshur to find out. Demshur noted that the last quarter revenue could have been even better if it wasn't for the currency. While the oil price has been low, higher revenue came from ongoing international projects in which the company has a significant amount invested. He added that these projects will give returns in the long term. Demshur also expects production to drop worldwide. The U.S. is producing about 9.2M barrels a day and by the end of the year, it will go down below 9M barrels. "As we speak, the U.S. oil production is rolling over. With those kind of decline curves, it doesn't take long when you cut the rig count in half to get a fall in U.S. production," said Demshur. He also said these declines will be seen around the world. Russia has already cut its production and the Middle East is not sustainable in the long term. Based on Brent and WTI crude prices on a constant dollar basis Y/Y, Brent would currently be at $78 and WTI would be approaching $62 a barrel. Thus by the end of the year in constant currency, Brent would be priced in the $80s and WTI will be pushing towards $70. He spoke about the large LNG projects overseas that will be supplying to Western Europe. |
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