Energy Prospectus

Stifel Now Sees Some Buys in the Oil Patch -- Market Talk
DOW JONES & COMPANY, INC. 8:12 AM ET 2/3/2015
9:12 EST - Stifel Nicolaus is feeling better about the oil patch, upgrading nine producers to buy. "While not inexpensive, we believe most of the stocks in this group will continue to perform well if WTI" gets to the investment bank's 2016 forecast of $65/barrel (it's above $50 this morning as the bounce since Friday afternoon continues). "We anticipate a rebound in oil prices as US supply growth slows, demand improves and the dollar potentially tops and begins to weaken over the next 12-18 months." Stifel does admit US inventories could remain bloated through midyear, which may push WTI below $40 for a time. (kevin.kingsbury@wsj.com; @kevinkingsbury)


(END) Dow Jones Newswires
02-03-150912ET
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The Wall Street gang can change in a hurry. After they drive a sector as low as they can, they turn around and tell investors about all the buying opportunities their "gloom & doom" created. This has played out many times before.

IMO we have seen the low for the year for oil prices. It may dip below $50 one more time, but I sure don't see it going down to $40. If we get another big drop in the active rig count, it may drive to $55 this month. I sure would like to see natural gas join the party and move over $3.00. February weather is starting out on the right foot.

I am expecting EIA and IEA to begin forecasting higher future demand. They are already forecasting a big jump in demand from Q2 to Q3.

You need to watch this: http://finance.yahoo.com/video/oil-slum ... 00425.html

Today, non-commercial traders outnumber commercial traders by 18 to 1. This is why oil futures contracts go too high and too low. It is the speculative trading of NYMEX futures that controls oil prices.

IMO the price of oil should be $70-$80 today based on the fundamentals. The only reason it does not go back to $90 is because of the strong U.S. collar.

It is very important to understand that oil prices are not determined by producers negotiating a fair price with refiners. It is determined by traders of the "paper oil" on the NYMEX.