Marathon, BP, Royal Dutch Shell Resume Uptrend

We restore buy recommendations on U.S. stock Marathon Oil (MRO) and European stocks BP plc (BP) and Royal Dutch Shell (RDS.A) triggered by stock prices resuming an uptrend above the 200-day average in each case. Those symbolic events appear confirmed by the long-term oil price cracking through its 40-week average for the first time since late last summer in our weekly tabulation. The recent average of $77 a barrel for futures prices for the next six years exceeds the 40-week average of $75.

Coincidentally, $75 a barrel is also the long-term price we use to calculate present value for determining McDep Ratios. A composite McDep Ratio of about 0.75 for all stocks in our coverage implies that stocks are priced for oil at about $56 a barrel. At the same time, long-term natural gas at $7.06 appears ready to crunch through its 40-week average of $7.23.

Finally, spotlighting the outlook for oil and gas demand in the largest energy economy, the S&P 500 U.S. stock market index pushed through its 200-day average on June 1. Stocks and oil and gas tend to trade on the same side of 200-day or 40-week moving average for months and sometimes years.

Originally published on June 2, 2009.

Comments

[Ivan Kitov:]

Predicting share price of energy companies: June-September 2009
We predict that XOM, COP, DVN, CVX, and HAL share prices will grow between June and September 2009 from $15 (HAL) to $30 (DVN). The prediction has a format of working paper. This post is the second step in a standard process - from idea to publication. The first step, fresh analysis, was presented in our previous post.
mechonomic.blogspot.co...

Jun 23 08:29 AM

[JMF:]

I do not understand what reports you are following. I owned 3,000 shares of BP for several months and had, had the key word, a very nice gain until 7 days or so ago. Since then the price of BP had dropped below $47.00 a share. I rode it from 31 and recently sold. I wish I had sold in the mid 50's not at 47. I think you need to review your most current numbers.

Jun 23 09:15 AM

[Shale Gas:]

These articles published by Mr Wulff are interesting, but why are they all dated a month ago? Can Seeking Alpha start publishing more current information from him?

Jun 24 08:57 AM