FTO, BTU, APA, NGS, UPL All of the energy stocks are trading with huge $1 spreads and they are getting away with it. They are telling us that at this moment they only want to sell, not buy! Jesus! This is not a fair or orderly market. SWEC needs to investigate. Yet XOM is trading with tight spread and hardly down. Why??????? I never saw a blood bath over so little as I have in energy sector. This is like the dot.com bubble of 2000. By the time earnings come out we may all be down 35% on our energy stocks for no reason.
There is reason/reasons for this drop across the energy sector. We just don't know all of them yet. Couple of explanations I have noticed so far 1) Sector went up so fast +100% in 6-months, there is profit taking 2) Funds quarterly window dressing 3) Funds taking profit & putting dollars into tech/health sector 4) followers of IBD drop of 6-8% and last but not least 5) If a lot of people had stop losses, they get hit & then hit & then hit until bottom is reached.
To me, the energy protests in Indonesia & France are scary indicators of world impact. Also, noted Venzeula pulled big dollars out of US this week.
Enough, and UPL will rebound in the future so if you do not sell then only looking at paper loss this week.
You mentioned many good reasons for the present drop across the energy sector. However, the whole stock market is dawn, due to several additional coinciding negative factors. To add the insult to injury, Fed has expressed inflation concerns, which sent the three major indices into negative territory.
Furthermore, U.S. initial claims for jobless benefits increased by 21,000 to 390,000 last week, boosted by workers impacted by hurricanes Katrina and Rita. The four-week average of new claims moved to 404,500 from 388,750. Economists had forecast a fall to 350,000. (Schaeffer�s Recap. 10/06/05).
You are right: UPL and other NG stocks will rebound in the near future, because even if the oil prices should be pushed (transiently) dawn, that can�t be done so easily with NG prices. Productive NG assets have suffered as much or perhaps even more damage from two hurricanes than the rest of the energy complex. There are no NG strategic reserves, and an import from Europe is impossible. It is very unlikely that U.S. natural-gas stocks will increase sufficiently in the course of three weeks to the levels adequate for winter needs. The NG demand will not decrease, like that of gasoline, on the contrary.