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Thread: Everything OIL.

  1. #1

    Join Date
    Jan 2009
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    Default Everything OIL.

    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 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, 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?p...d=a_e_bB.zbWxA


  2.  
  3. #2

    Join Date
    Jan 2009
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    Default Re: Everything OIL.

    Got UCO?

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  5. #3

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    Default Re: Everything OIL.

    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

  6.  
  7. #4

    Join Date
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    Default Re: Everything OIL.

    UCO is falling from 10.36 to 9.60 premarket.

  8.  
  9. #5

    Join Date
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    Default Re: Everything OIL.

    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...717&r=5157.png

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  11. #6

    Join Date
    Feb 2009
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    654

    Default Re: Everything OIL.

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

    http://seekingalpha.com/article/1213...-services-etfs

    Quick Logic for Buying Engineering & Construction, Energy Services ETFs

    by: Johnny Discount February 19, 2009 | about stocks: FLM / PKB / 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- PowerShares Dynamic Oil & Gas Services Portfolio
    Factsheet: http://www.invescopowershares.com/pdf/P-PXJ-PC-1.pdf


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

    or

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

    Lady
    If you think education is expensive, try ignorance. - Derek Bok

  12.  
  13. #7

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    Default Re: Everything OIL.

    Oil up almost 10% today. UCO trade looking good so far.
    -- Tom | My Trades

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  15. #8
    alevin Guest
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    Default Re: Everything OIL.

    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.p...ions/blog.html

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  17. #9

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    Default Re: Everything OIL.

    More information regarding what Alevin was talking about below:

    http://seekingalpha.com/article/1222...sand-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
    If you think education is expensive, try ignorance. - Derek Bok


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  19. #10

    Join Date
    Dec 2007
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    906

    Default Re: Everything OIL.

    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.
    -- Tom | My Trades

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