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Street One Financial LLC (S1F or Street One) is an independent entity affiliated with Precision Securities, LLC., a full service registered broker dealer and a member of FINRA/SIPC. Street One specializes in educating, evaluating and trading ETFs, equities and options. Our firm assists portfolio... More
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  • Oil: Near a Bottom? 1 comment
    Jun 9, 2010 9:52 AM | about stocks: UNL, UNG, OIL, USO, DBO, BNO, USL, FXE, URR, UUP, GLD, SGOL, PHYS, OIH, GAZ

     

    By Scott Freeze and Evan Zacharias

    Given the recent turmoil in both the global markets as well as the massive oil leak in the gulf, the price of oil has sharply declined.  Currently, the July light sweet crude is trading at $73.18 per barrel.   However, there is a strong chance that the price of oil will rebound upwards, somewhere in the range of $90 by the end of the summer.  Some ETFs and ETNs to watch that track light sweet crude are: The United States Oil Fund (USO), PowerShares DB Oil (DBO), (NYSEARCA:OIL) iPath (S&P GSCI Crude Oil Total Return ETN), United States Brent Oil (BNO) and the United States 12 month Oil (USL). Given the recent BP mishap, the government will be more closely regulating oil rigs and their drilling operations, thus reducing the drilling efficiency, in turn reducing the supply, and therefore increasing the price of oil.  Furthermore, the price of oil has also dropped given the recent drop in the price of the Euro(FXE, URR), putting their money into both dollars(UUP) and gold (GLD, SGOL, PHYS, IAU) alike, inflating the price of both.  Investors are looking for the Euro to gain strength around $1.20 before they start buying Euro’s again, and as the price of the dollar decreases, the price of oil will increase.  The current slowdown in Europe and Asia while expected to continue, will probably not get much worse.  Therefore, the demand of oil should stay in a range of flat to a slight increase.  We still feel that OIH is looking at significant volatility given the recent downturn, and continued pressure.    In addition to a possible reduction of supply, there will also be more a possible increase in demand, given that people travel more over the summer time months and will be increasing their usage of gas.  Lastly, natural gas (GAZ, UNG, UNL) could also see an increase in price over the summer given that as government regulation increases, drilling oil will become more expensive to produce.



    Disclosure: No Positions

    Disclosure: No positions
    Stocks: UNL, UNG, OIL, USO, DBO, BNO, USL, FXE, URR, UUP, GLD, SGOL, PHYS, OIH, GAZ
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  • R we there yet
    , contributor
    Comments (384) | Send Message
     
    Good predictions on what would be happening from the FED re: new regs. Thoughts on the Pres pushing alternative fuel development?CNBC today interviewed lg trucking concern (DHL) and their push toward alternative fuels in their fleet. Any possibilities there for investments or has it already been factored into the sector.
    18 Jun 2010, 11:37 PM Reply Like
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