Everything OIL.

[Show-me]

Going to start a oil thread. I play UCO exclusivly for now, but there are others both long and short, DIG, DUG, UCO, SCO, etc.

Tekno made some good comments and I found a article to post on the subject.


Refiners, Union Workers Extend Contract Talks as Strike Looms

By Barbara Powell, Aaron Clark and Jordan Burke
Feb. 1 (Bloomberg) -- Royal Dutch Shell Plc (http://www.bloomberg.com/apps/quote?ticker=RDSA%3ALN) and the union representing refinery workers extended talks on a new contract for at least 24 hours, delaying a possible strike that may affect almost two-thirds of U.S. capacity.

The groups made “sufficient progress” during talks yesterday, Lynne Baker, a United Steelworkers spokeswoman, said in a telephone interview. The rolling 24-hour extension began at 12:01 a.m. U.S. Central Time today and renews each 24 hours until the two sides reach an agreement or the union terminates the contract and gives 24 hour notice that it will strike.
“When you go to rolling 24-hour extensions, it appears they want to reach a settlement, which will keep the union working without disrupting refinery operations,” said Andy Lipow (http://search.bloomberg.com/search?q=Andy+Lipow&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1), president of Lipow Oil Associates LLC in Houston.

The negotiations cover workers at 86 plants representing about 64 percent of U.S. refining capacity, including operations owned by Exxon Mobil Corp., Valero Energy Corp., BP Plc and Chevron Corp. as well as Shell. Gasoline futures prices soared almost 10 percent last week on concern over a walkout.

“The USW has agreed to extend the existing contract given that negotiations continue to be productive and progress is being made,” Stan Mays, a Shell spokesman, said in an e-mail. “Shell is committed to resolving the remaining issues at the negotiating table. We are optimistic that a mutually satisfactory agreement can be reached with the USW.”

More here...........

http://www.bloomberg.com/apps/news?pid=20670001&refer=us&sid=a_e_bB.zbWxA

[Show-me]

Got UCO?

[teknobucks]

http://biz.yahoo.com/ap/090201/refiners_labor.html

heard a rumor from buddy out west about this...he thought it involved nat gas...lol

[Show-me]

UCO is falling from 10.36 to 9.60 premarket.

[teknobucks]

like UNG here...i think

been on a ride 2 hell......seems to be putting in a bott

http://stockcharts.com/c-sc/sc?s=UNG&p=D&yr=0&mn=3&dy=10&i=p01070616268&a=121760717&r=5157.png

[XL-entLady]

Here are some suggestions regarding oil related ETFs to put on a watchlist.

http://seekingalpha.com/article/121385-quick-logic-for-buying-engineering-construction-energy-services-etfs

Quick Logic for Buying Engineering & Construction, Energy Services ETFs

by: Johnny Discount February 19, 2009 | about stocks: FLM (http://seekingalpha.com/symbol/flm) / PKB (http://seekingalpha.com/symbol/pkb) / PXJ (http://seekingalpha.com/symbol/pxj)

"In the past few weeks I have seen many rational arguments supporting the case for higher oil prices, and thus, my reasoning for buying companies with exposure associated with exploration, extraction and construction of energy related services. By 2010, I would expect substantially higher oil prices making a strong case for buying Engineering & Construction as well as Energy Infrastructure companies now.
Rather than pick individual companies, I believe select ETFs will take out the guesswork and provide the exposure I am looking for.

Here is some of my rationale for my expectations:

<LI _extended="true">Oil fields are experiencing decline rates in conjunction with decreasing capital and exploratory spending <LI _extended="true">Lower oil prices makes many projects once viable at $80+ oil, no longer profitable, thus reducing potential sources <LI _extended="true">Oil supply will likely be reduced as available credit to build new projects to increase capacity becomes harder to find <LI _extended="true">In an effort to firm up prices and lower current inventories, OPEC will continue to cut supplies <LI _extended="true">Analysts have claimed OPEC countries are potentially producing less than quotas <LI _extended="true">Many non-OPEC countries shunned more professional and efficient private partners when oil prices were much higher. The non-OPEC countries lack efficiency with much lower oil prices and thus, lower margins seems like a downward spiral to their production <LI _extended="true">Russia has been responsible for a large portion of non-OPEC production. Knowing Russia's strong arm tactics and experiences with natural gas, I would think they favor market disruptions <LI _extended="true">While a strengthening dollar could put downward pressure on oil prices, I personally don't see that as a likely scenario <LI _extended="true">Many of the E&C and oil service companies still have very large backlogs
The U.S. has the largest demand for oil. Given we were first into a recession, and likely first out, domestic demand in the U.S. could pick up sooner than later and drive prices higher.

The ETFs I find most fitting to these points are the following:

PXJ (http://seekingalpha.com/symbol/pxj)- PowerShares Dynamic Oil & Gas Services Portfolio
Factsheet: http://www.invescopowershares.com/pdf/P-PXJ-PC-1.pdf (http://www.invescopowershares.com/pdf/P-PXJ-PC-1.pdf)


PKB (http://seekingalpha.com/symbol/pkb)- PowerShares Dynamic Building & Construction Portfolio
Factsheet: http://www.invescopowershares.com/pdf/P-PKB-PC-1.pdf (http://www.invescopowershares.com/pdf/P-PKB-PC-1.pdf)

or

FLM (http://seekingalpha.com/symbol/flm)- First Trust ISE Global Engineering and Construction Index Fund
Factsheet: http://www.ftportfolios.com/common/etf/productinfo/FLM/FLM-factsheet.pdf (http://www.ftportfolios.com/common/etf/productinfo/FLM/FLM-factsheet.pdf)
"

Lady

[etftalk]

Oil up almost 10% today. UCO trade looking good so far.

[alevin]

Earlier today I said I'd talk here about why I've backed off of buying USO, at least for the time being. Couple reasons, one being the internal composition of USO. They buy futures contracts 1 at a time and roll them over to the next contract when the first one expires. There's this little thing called contango operating right now in oil futures vs. spot prices. It means futs are higher than spot right now, which means when the current contract gets rolled forward, the fund is paying a higher price for the same shares. Ouch! The article below 'splains it much better than I can. There are better possibilities in the sector right now near term, it looks like, including among ETFs-example perhaps USL-talked about in the article below. I've shifted to considering Petrobras or BP as single stock plays at the moment, more research to do tho.

http://www.indexuniverse.com/index.php/sections/blog.html

[XL-entLady]

More information regarding what Alevin was talking about below:

http://seekingalpha.com/article/122222-uso-death-by-a-thousand-contangos

"USO holds all its funds in next-month WTI futures. For example, USO started out February fully invested in the March WTI contract. Midway through February USO rolled all its funds into the April contract. The rollover has all been done on a single day, but USO recently decided to rollover over a multi-day period to minimize market impact.

When oil is in contango, far months are more expensive than near months so USO’s rollover loses money. The loss is mitigated somewhat by the interest USO earns on its funds (only 10% of funds are needed to secure a contract). Also when oil is in backwardation the rollover makes money.

However, over USO’s history, oil has been in contango more often than backwardation. Consequently, over its history, USO has lost value relative to oil. The ratio of one USO share to the price of crude was 1.0 when USO was launched. Today the ratio is 0.68. It’s essential to appreciate that this process has NO intrinsic lower limit: a prolonged period of contango can drive USO down indefinitely even while spot oil remains unchanged.

Anyone considering a buy/hold strategy for USO today should be aware that oil has been in very steep contango and likely will remain thus for some months to come. This has been very costly to USO in recent months as a comparison of crude prices to USO readily shows.

In summary, while USO is a useful short-term oil proxy, it should not be used as a long-term proxy without some strategy to minimize value erosion through contango, such as writing monthly covered calls."


Lady

[etftalk]

UCO's high today is 7.40. That fills the open gap created on 2/17. That's the main reason I sold today (@ 7.17). It could obviously go higher (fundies), but the technical reason for the trade is complete for me.

[Bullitt]

Way to stick to your plan and not try squeezing out a few extra %.

This is unreal with oil. Huge technical resistance ahead, and it doesn't even appear to be basing yet, but I can't get over that MACD divergence.

How about that huge volume move in UGA today to rise above the 50 DMA? Any thoughts?

[etftalk]

UGA looking good bullitt. I use the exponential MA's and it's still under, but the chart looks like it's puting in a higher low, the PMO is starting to move up (but no crossover buy signal yet). Looks like $25 is the key for the longer-term trend.

[Bullitt]

I don't want to fall in love with this thing, and I have no position in it (yet), but UGA....

Higher lows, big volume on up days, above the 50 DMA which is trending upwards and look at that base. What are we thinking here guys, buy on a breakout over 24.50?

UGA leads USO, so we could also look to get in on some pin action if UGA breaks out by going long USO or UCO.

[XL-entLady]

I don't want to fall in love with this thing, and I have no position in it (yet), but UGA....

Higher lows, big volume on up days, above the 50 DMA which is trending upwards and look at that base. What are we thinking here guys, buy on a breakout over 24.50?

UGA leads USO, so we could also look to get in on some pin action if UGA breaks out by going long USO or UCO.
Yep, I've been looking hard at UGA. It's been on my watch list for about a month. All the DMA's are doing what I wanted them to, we're going into the summer season of high gasoline use, and today we had a bit of a pullback so it's not at the top of the bollinger band. The only down I can see is we're overbought on the SStoch, however we're just starting to come back down on the RSI(2).

My finger is on the button ....

Lady

[XL-entLady]

Oil & Gas Industry

Posted Wed Mar 18, 03:41 pm ET
Posted By: Sheraz Mian

"While downside risks remain, the overall outlook for the oil sector has improved in recent days, owing largely to the tentative signs of a supply response to anemic global demand. With demand falling sharply due to worldwide economic problems (http://www.zacks.com/stock/news/18333/Oil+%26amp%3B+Gas+Industry#), inventories started building at a faster rate since last fall.

In response, OPEC (which accounts for roughly 40% of all oil supplies) announced a number of production cuts. While there was ample skepticism early on regarding OPEC’s ability to enforce the announced cuts, recent evidence suggests a significant level of compliance within the cartel.

As such, while oil prices over the coming weeks will track the outlook for the global economy, the commodity’s improved supply situation is expected to help prices consolidate around current levels.

Natural gas, on the other hand, is a North American story and developments here over the coming months will determine its outlook.

On balance, we see more upside potential than downside risk in the sector.

OPPORTUNITIES

The risk-reward trade-off for a number of sub-sectors remains very compelling, in our view. The large-cap integrateds, oilfield services and offshore drilling sub-sectors offer lucrative opportunities at current levels.

The relatively low-risk energy conglomerate business structures of the large-cap integrateds, with their fortress balance sheets (http://www.zacks.com/stock/news/18333/Oil+%26amp%3B+Gas+Industry#), ample free cash flows even in a low oil price environment, and growing dividends are well suited for uncertain times like these. Our preferred names in this group remain Exxon (XOM (http://www.zacks.com/stock/quote/xom)) and Chevron (CVX (http://www.zacks.com/stock/quote/cvx)).

The underlying business fundamentals of oilfield service companies, particularly those with an international focus and deepwater-capable drilling contractors still remain robust. We like Schlumberger (SLB (http://www.zacks.com/stock/quote/slb)) and Baker-Hughes (BHI (http://www.zacks.com/stock/quote/bhi)) in the oilfield service space, and our preferred deepwater drillers remain Transocean (RIG (http://www.zacks.com/stock/quote/rig)) and Diamond Offshore (DO (http://www.zacks.com/stock/quote/do)). We like Pride (PDE (http://www.zacks.com/stock/quote/pde)) as an emerging and relatively under-appreciated deepwater driller.

WEAKNESSES

We strongly feel that industry players in the servicing and drilling ends of the business with substantial natural gas-focused and North America-centric operations should be avoided.

The two major sub-sectors that fit that description would be the onshore drillers and service players with heavy pressure pumping operations. We believe that pricing and margins for operators in these two sub-sectors will remain under pressure through 2010, even as the outlook for natural gas price improves.

Halliburton (HAL (http://www.zacks.com/stock/quote/hal)), the largest North American pressure pumping player, and BJ Services (BJS (http://www.zacks.com/stock/quote/bjs)), one the largest in this category, need to be avoided. We also have Sell recommendations for Nabors (NBR (http://www.zacks.com/stock/quote/nbr)) and Patterson-UTI (PTEN (http://www.zacks.com/stock/quote/pten)), two major North American land drillers."


http://www.zacks.com/stock/news/18333/Oil+%26amp%3B+Gas+Industry

Lady

[Bullitt]

What are we thinking here guys, buy on a breakout over 24.50?

Looks like UGA moved past the 24.50 today, but not with much authority. We might have to wait until tomorrow or next week for confirmation.

PXJ its taking another run at the 50 DMA on decent volume today too.

[Bullitt]

There it goes. UGA made a solid breakout today in a weak market above the 24.50 priceline on huge volume. Maybe some minor resistance at 30'ish area, then there's 200 DMA to contest with, but there is some serious room to run here.

I'll look at this over the weekend, but I might set a limit in the low 25's. Once these IBD style breaks happen, you really can't get too cheap when it comes to a buying pullback or else you'll be one of the ones stuck chasing it.

[Here$14U]

Bullitt; Do you believe UNG may move up in sympathy with the energy complex. Good volume today, and it is now above its 20dyma. Not to expensive either. Looks very interesting to me.:bigsmile:

[XL-entLady]

There it goes. UGA made a solid breakout today in a weak market above the 24.50 priceline on huge volume. Maybe some minor resistance at 30'ish area, then there's 200 DMA to contest with, but there is some serious room to run here.

I'll look at this over the weekend, but I might set a limit in the low 25's. Once these IBD style breaks happen, you really can't get too cheap when it comes to a buying pullback or else you'll be one of the ones stuck chasing it.


Bullitt; Do you believe UNG may move up in sympathy with the energy complex. Good volume today, and it is now above its 20dyma. Not to expensive either. Looks very interesting to me.:bigsmile:
14U, I don't have Bullitt's experience or knowledge but for whatever it's worth, and that may not be much, I looked at both UNG and UGA a couple of days ago and thought that UGA's chart looked far stronger. I bought UGA on 3/18. So after Bullitt has time to study the charts this weekend, I'll await his report back to us with great interest. :)

Lady

[Bullitt]

I've been waiting for UNG to rise for a few weeks now, but yes, that volume up day was one of the biggest since September for UNG. I like the base in UGA better. UGA is in stage one of a new bull market, which is the basing phase. UNG really hasn't done much basing and has been hit pretty hard on selloffs. However, if it manages to blow above that 50 DMA on the kind of volume it had two days ago, it could be either a short term rally or a trend change. Basic indicators don't show UNG being even close to overbought yet either.

UGA- I would have like to seen a bigger move than 1.8% on volume like that but I still think it's a good idea in the low 24's. It might sell off some early going if people look at the indicators and see overbought or it might just gap and go. Overbought really doesn't mean much in an IBD style breakout.

Bottom line is all commodities are going higher. We're probably seeing the last of gasoline below $2 across the country just as Americans continue to pile back into SUV's and Trucks with 0% financing. With OPEC cutting (or at least saying they are cutting) once again, this should drive up UNG with the transport costs of it alone. Both UGA and UNG could be something to buy and hold onto into the summer months on a sell the news things.

Quick story: What got me thinking about UGA is on my drive home from work, I drive a busy strip in which I pass about 10 gas stations in 2 miles. I began taking notice of the price of gas at each individual station as I drove along when the prices were dropping hard and then tried to find an ETF that tracks gasoline. So, one way to track this in real life would be to pay attention to the price of gas at the pump.

Good luck traders.

[alevin]

http://seekingalpha.com/article/128217-oil-thesis-buying-101-even-experts-mock-it?source=article_lb_articles

Well, I was thinking of hitching a piece of my wagon onto USO this next week, but after reading the above, I think not after all. Maybe I'll just wait for opportunity to pounce onto DUG one more time. Last time didn't work so hot. Or maybe I'll just slip into a smallll position in UGA til I see the turn. Need to do some more thinking and reading. I really have to watch the trading costs. so far I've managed to stay even with investments but am slightly in the hole due to trading costs already incurred that haven't recouped yet. No net profit yet here, still paying ETF university tuition.:rolleyes: