Tumbling Oil Puts Trusts, Sands on the Cheap

• By the tickerspy.com Staff
• On 10:33 am EDT, Monday September 28, 2009

Crude oil's slide has weighed on oil-related equities, but is a buying opportunity at hand?

In less than a week, oil prices have fallen from above $71 per barrel to less than $66 as economic worries weighed on the equity markets and an uptick in the dollar hurt commodities. Today, the Dow is up triple-digits, but another gain for the dollar versus the euro and pound put a damper on a potential oil rally.

A number of oil-tied equity sectors have dipped over the last week, providing a potential buying opportunity for the bulls.

As a whole, the Canadian Energy Trusts Index was off only fractionally for the period, but individual components were discounted by as much as -6%.

Precision Drilling Trust (NYSE: PDS - News), Advantage Energy Income Fund (NYSE: AAV - News), and Harvest Energy Trust (NYSE: HTE - News) are all more than -3.5% cheaper than they were last week. Should oil continue to decline, more pain could be in store for these equity plays, but an oil rebound could erase prior losses.

The entire Oil Sands Stocks Index was in the red last week by -2% or more. Reuters highlighted Chinese interest in the sector after PetroChina (NYSE: PTR - News) said it would pay nearly $2 billion for a 60% stake in two planned oil sands projects.

While there is no news of merger talks at North American Energy Partners (NYSE: NOA - News) or Oilsands Quest (AMEX: BQI - News), their sub-$300 million market-caps make them an easy buy for any of the big oil and gas companies.

As oil establishes a trend investors can track equity movements any of tickerspy's oil-tied stock Indexes.

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