WTI is bouncing around in the $104/bbl range. If I use $100 WTI in my forecast models the Fair Value Estimates go through the roof! This is shaping up to be a very profitable 2nd half for our Sweet 16 Growth Portfolio. Strong 2nd quarter results should draw a lot of attention to these stocks.
The unrest in Egypt and Syria is not going away anytime soon. The Geopolitical Risk Premium will stay in the oil price and demand for oil is going up at the same time.
It will not be good if oil continues to move higher. That increases the risk of throwing western economies back into recession. We do not want that to happen. Japan is also showing some life and their economy is sensitive to energy prices.
Crude Oil Prices - July 9
Crude Oil Prices - July 9
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
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bearcatbob
Re: Crude Oil Prices - July 9
Dan, All we need to do is remove the fear of a collapse in crude prices.
Re: Crude Oil Prices - July 9
Spend some time looking at this chart. It covers more than three years.
http://www.cmegroup.com/popup/mdq2.html ... ity=MEDIUM
WTI has been forming a wedge for almost two years. It has been trading in a relatively tight range ($88 to $100) for a year. There are support levels at $100, $95, $92, strong support at $88 and rock solid support at $82. All of the big three oil shale plays (Bakken, Eagle Ford and Permian) make darn good money at $80/bbl.
The fear out there is that horizontal drilling in the oil shales will crush oil prices like it did for Ngas. What investors need to understand is that oil trades on a global market and gas trades on regional markets. The BS that the U.S. will soon be producing more oil than it needs is total hogwash. Mark my words, it will never happen. We consume over 14 million BOPD and only produce 7.2 MMBOPD. At most, we get to 10.5 MMBOPD in ten years. By then the steep decline in the shale wells will be impossible to keep up with. I went to a presentation by some very smart people a few months ago where they said if we double the number of rigs drilling for oil over the next ten years it will not matter.
http://www.cmegroup.com/popup/mdq2.html ... ity=MEDIUM
WTI has been forming a wedge for almost two years. It has been trading in a relatively tight range ($88 to $100) for a year. There are support levels at $100, $95, $92, strong support at $88 and rock solid support at $82. All of the big three oil shale plays (Bakken, Eagle Ford and Permian) make darn good money at $80/bbl.
The fear out there is that horizontal drilling in the oil shales will crush oil prices like it did for Ngas. What investors need to understand is that oil trades on a global market and gas trades on regional markets. The BS that the U.S. will soon be producing more oil than it needs is total hogwash. Mark my words, it will never happen. We consume over 14 million BOPD and only produce 7.2 MMBOPD. At most, we get to 10.5 MMBOPD in ten years. By then the steep decline in the shale wells will be impossible to keep up with. I went to a presentation by some very smart people a few months ago where they said if we double the number of rigs drilling for oil over the next ten years it will not matter.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group