Oil Prices

[dan_s]

July Crude Oil prices traded sharply higher during the US morning hours and broke out to their highest level since February. Early support for the market came from an improvement in risk-taking sentiment during the Asian and European trading hours and from rising geopolitical risk concerns. Overnight reports indicating that the US would supply Syrian rebels with more weapons was seen by some traders as a factor that could escalate the conflict. This boosted the fear premium in the crude oil market. This morning's lackluster US economic data did little to deflate the morning advance. July Crude Oil finished the week with a gain of nearly $2.00.

As I discussed in this week´s newsletter, there are many factors that impact the price of crude oil. One thing for sure, the demand for oil ALWAYS increases during the 2nd half of the year.

[dan_s]

Our Sweet 16 Growth Portfolio is a collection of mid-caps which is heavily weighted to oil. Each week that passes with WTI over $90 per bbl increases my confidence in my Fair Value Estimates. Second quarter results are going to be strong.

Natural gas prices during the second half should be double from what they were a year ago, giving half the companies a nice revenue boost.

[dan_s]

Technicals show WTI moving over $100 very soon. As I discussed in the last newsletter. WTI has been trading in a $15 range for 11 months and since the end of April the range has tightened to $90-$95. It has now moved above the range and appears to be heading to a test of $100. Each close above $95 will strengthen support at that level. Several closes over $100 could mean an even higher trading range is possible.

All this means to me is that the Sweet 16 is looking very good. The portfolio is heavily weighted to oil.

There is now VERY STRONG for WTI at $85 with several other support levels above that.