So obvious, your words sound like a scared short seller bunny rabbit, pacing around your house while you watch xom go up.
•North American and Saudi production has peaked.
•Drilling costs in Saudi Arabia are increasing as cheap onshore supplies are exhausted, forcing the Arabian Kingdom to develop expensive offshore reserves.
•New Iranian oil has already been reflected in the spot price.
•Higher prices are possible if OPEC cuts production for Iran.
sounds like a short who is scared that xom went up last week
As of Friday afternoon, more than 23,000 contracts were outstanding on the September 40-strike puts, with several other contracts also seeing elevated positioning.
And this isn't chump change, either. Each contract controls 1,000 barrels of crude. That means that if oil closes just a dime below $40 at 2:30, the holders of those options will make a collective $2.3 million. Otherwise, they'll make nothing.
Meanwhile, at a price of roughly $7.50, the 16,000 contracts outstanding on the 50-strike puts alone are worth $120 million. Throw in the interest in the 85-strike put ($273 million), the 60-put ($133 million) and the 55-put ($129 million), and we're beginning to talk about a billion-dollar event in the crude oil market.
With this much money on the line thanks to unusually elevated bearish bets, the last-minute market vacillations could be earthshaking.
"We're really in uncharted waters—I don't ever remember anything like this," commented Stephen Schork, author of the widely read Schork Report. "I would be surprised if we didn't get some sort of major move at the last minute. I either think we'll $45 or $46. It's a roll of the dice."
They have been lobbying for years, the Mexico deals nothing, what is important, it opens the door for more exporting around the world.
Always look at the larger picture, buy xom at 70
By Michael Brush,
The most hated companies will eventually bounce back strongly
If you want to be a true contrarian, now is the time to step up and buy energy stocks.
Energy ranks the worst for relative strength, right after basic materials, according to brokerage Robert W. Baird.
But not just any energy. Skip the refiners. They're holding up relatively well. The worst of the worst are in drilling, equipment and services; oil and gas exploration and production; and coal. Coal is absolutely despised, one reason Societe Generale strategist Lawrence McDonald, a true contrarian who looks for capitulation before warming up to a sector, favors this group.
I offer five energy stocks to give you exposure to each of these groups, below.
But first, why buy energy stocks now? It seems crazy, but here are five good reasons.
1. At around $44 a barrel for West Texas Intermediate (WTI), oil will probably hold its ground near the lows it hit twice earlier this year before bouncing higher.
Here's why: The low-$40 range for oil is roughly the average cost of production, globally. Going below the average would suggest a lot of projects would get scrapped, pushing down supply, which would support prices, says Will Riley, an oil sector expert who helps manage the Guinness Atkinson Global Energy Fund . In short, right below here is the price that serves as a psychological barrier for oil.
"It is a level that people perceive will cause supply to decline even faster," says Riley.
2. Investors are too worried about Iran.
With a nuclear deal possibly on the horizon, Iran may be pumping a lot of oil on the market again. How much? A lot of investors put the number at a million barrels a day, a lot for a market that already has excess supply. But those estimates may be too high, says Riley, because of how much Iran has to invest to ramp up production. He thinks Iran will add half a million barrels a day to the market. Assuming a nuclear deal even gets done (h
my uncle work works for, said short all you can short and you will not have to work for the next five years.
Last post, on a flight to St. Thomas Point Pleasant, I hear the steel drums and rum and coke.