Lagging U.S. Oil Stocks

Yet to sustain stock price above the 200-day average, buy recommendations ConocoPhillips (COP) and ExxonMobil (XOM) along with two peer stocks that make up our U.S. Integrated group, have the potential to confirm a new stock price uptrend. In contrast, non-U.S. large cap oil and gas stock groups are in a stock price uptrend already for the most part. Largely because of stock price action, the median McDep Ratio for the U.S. Integrated Group is now the lowest of five large cap groups compared to three months ago when it was the highest.

One could be pessimistic and reckon that the threat of higher taxes is overhanging the U.S. stock market and U.S. oil and gas stocks. Yet, because oil tax increases contribute to oil price increases, our political leaders are likely to moderate anti-oil industry action. Meanwhile, crude oil price also appears to be near keeping a level above its 200-day average. Late last week, both the near-month and twelve months crude oil futures prices crossed the 200-day and 40-week average, respectively, perhaps ending the downtrend since September 2008 and possibly indicating a new uptrend.

Presuming no unforeseen upset, six-year futures may also confirm a new uptrend soon. As a result, commodity price may be in the process of confirming the new stock price uptrend traced by most of our large cap recommendations.

Originally published on May 26, 2009.

Comments

[WayneS:]

HR 2454: "The American Clean Energy and Security Act of 2009 is another example where the US government is trying to destroy American oil and gas companies. Refineries have actually done more to reduce GHGs that any other entity in the US and they are going to be punished for the billions of dollars they have spent improving the "environmental" quality of gasoline and diesel. Politicians want the general public to think that oil companies are ripping us off and that they, our politicians, are our saviors. Taxing agencies and banks make more money per gallon of gasoline than the refineries.

Jun 18 10:00 AM

[Ivan Kitov:]

My model shows that XOM, COP and others are set for a sprint in the summer months. I would expect XOM above $80 in September:
mechonomic.blogspot.co...

Jun 20 05:13 PM