Time To Buy Oil Yet? Maybe Not

Is it too early to start making a buy list for stocks expected to benefit from lower crude-oil prices? Maybe not… if Israel attacks Iran’s nuclear facilities (as a member of Prime Minister Olmert's cabinet recently warned might happen), the upward spike in oil prices could present an opportunity to buy the stocks at deep bargain levels (from the perspective of someone who believes oil prices can’t stay above $135 a barrel forever -- see my June 12 post).

Indeed, chances are good the stocks could then be the cheapest they’ll get prior to the recovery phase. Declines have gone far already as can be seen from the following price declines over the past year.

FedEx               -22%
Ford                 -40%
Winnebago     -60%
AMR Corp.      -75%   

Comments

[john s.gordon]

greed always comes before peoples' basic needs. do not expect a futures trader or speculator to be moral. remember the great anglo-dutch rubber cartel of the 1920's? the germans were fed up with that one and IGFarben developed a synthetic-rubber process which they then licensed to standard oil. that process and the blueprints to build plants became u.s government property on dec. 8 1941, the war could not have been won without u.s possession of that technology. anybody for synthetic liquid transportation fuels from coal? we've got lotsa coal. it will take federal government action to get this industry up & running. keep an eye on what the air force wants to do in north dakota.
> jack

[Investor612]

Will someone please tell Michael Levy that we accept he's Karl Marx Jr. and tell him to stop spamming every article with his manifesto? Please.

[Sophisse]

Levy - you kill me. How can you legislate the price down when the US doesn't own it? If you force Mexico to sell oil to us at $80, don't you think they might just put it on a ship and send it to China instead, where they are happy to pay $135 for it?

[galewhitaker]

Get a grip Larry! Oil is a declining resource like gold and the price will not go down for the rest of time. The truth is equities are worth far less than they were in a world of $130 oil. The airlines are going to go broke and so are the big 3. My advice is to load up on some puts, buy some canned goods, bottled water and an AK-47.

[jjason]

Do any of you actually read the links that explain how speculation in commodity futures has increased the prices of everything that we buy that needs oil to produce it?

Are you content to see the recession we are now in go into a depression that could last for three to ten years?

Wake up people. Get an education about how the speculation in commodities futures raises the prices of commodities. Then ask Congress to stop it by requiring 100% margin and that speculators take delivery of the commodity.

This will help.