How We Will Kick the Bad Habit of Stocks Chasing Oil

The American Petroleum Institute’s (API) estimate for a crude oil inventory build sent oil lower after U.S. equity markets had closed Tuesday. By the open Wednesday morning, equity investors were already well-groomed for bad news and we got it when the EIA reported an actual build versus expectations for a draw. Last week the same reports produced positive signals, with draws from inventory serving to send stocks higher. What’s funny is that weather has likely been influencing the week-to-week swings, but the market is acting like the data carries implications about the long-term supply/demand dynamics for energy. It does not right now! So, how are we going to kick this bad habit of stocks chasing oil back and forth then? See more on how stocks can stop chasing oil.

Security Sector	12-30-15
iPath S&P GSCI Crude Oil TR ETN (NYSE: OIL)	-3.6%
SPDR S&P 500 (NYSE: SPY)	-0.7%
SPDR Dow Jones (NYSE: DIA)	-0.7%
PowerShares QQQ (Nasdaq: QQQ)	-0.9%
iShares Russell 2000 (NYSE: IWM)	-1.0%
Vanguard Total Stock Market (NYSE: VTI)	-0.8%
Energy Select Sector SPDR (NYSE: XLE)	-1.4%
SPDR S&P Oil & Gas E&P (NYSE: XOP)	-2.9%
Market Vectors Oil Services (NYSE: OIH)	-1.8%
Industrial Select Sector SPDR (NYSE: XLI)	-0.8%
Financial Select Sector SPDR (NYSE: XLF)	-0.7%

DISCLOSURE: Kaminis is long XLE. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK).

Buy United States Oil Here – Discovery of Support

United States Oil (NYSE: USO) had an important discovery Monday; it found support. Some are pointing to technical analysis for reasoning, but there are fundamental factors to point to. Energy prices have stabilized for now thanks largely to supportive economic data out of Europe and China. Still, given recent supply stubbornness, energy could require a geopolitical catalyst to really get going to the upside over the near-term. Because I give weight to that possibility, I can recommend immediate purchase for aggressive investors and a buy and hold strategy for all others on a positive change in demand dynamics. See the full report on United States Oil (USO) here.

DISCLOSURE: Kaminis is long USO. Article interests energy investors including Exxon Mobil (NYSE: XOM), BP (NYSE: BP), PetroChina (NYSE: PTR), Petrobras (NYSE: PZE), Royal Dutch Shell (OTC: RYDAF.PK), Total (NYSE: TOT), Chevron (NYSE: CVX), Repsol (OTC: REPYY.PK), ConocoPhillips (NYSE: COP), Eni SpA (NYSE: E), Sasol (NYSE: SSL), Encana (NYSE: ECA), Suncor (NYSE: SU), Imperial Oil (AMEX: IMO), Statoil (NYSE: STO), Cenovus (NYSE: CVE), Transocean (NYSE: RIG), Penn West Petroleum (NYSE: PWE), Continental Resources (NYSE: CLR), Noble (NYSE: NE), Concho (NYSE: CXO), Diamond Offshore (NYSE: DO), Ensco (NYSE: ESV), Whiting Petroleum (NYSE: WLL), Nabors (NYSE: NBR), Pride International (NYSE: PDE), Helmerich & Payne (NYSE: HP), QEP Resources (NYSE: QEP), Enerplus (NYSE: ERF), Rowan (NYSE: RDC), Cobalt (NYSE: CIE), Patterson UTI (Nasdaq: PTEN), SandRidge (NYSE: SD), Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), National Oilwell Varco (NYSE: NOV), Baker Hughes (NYSE: BHI), Weatherford International (NYSE: WFT), Cameron (NYSE: CAM), FMC Tech (NYSE: FTI), Oil States International (NYSE: OIS), Superior Energy (NYSE: SPN), Carbo Ceramics (NYSE: CRR), Helix Energy (NYSE: HLX), Pioneer (NYSE: PXD), CNOOC (NYSE: CEO), China Petroleum and Chemical (NYSE: SNP), Ecopetrol (NYSE: EC), Canadian Natural Resources (NYSE: CNQ), Apache (NYSE: APA), Anadarko (NYSE: APC), Devon (NYSE: DVN), EOG (NYSE: EOG), Chesapeake (NYSE: CHK). Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Exxon Mobil (XOM) – What’s Most Relevant

Exxon Mobil (NYSE: XOM) reported its quarterly results Friday, noting a sharp decline in earnings due to lower energy prices. The company, its shares hammered this year by sharply lower energy prices, guided investor attention to 4 key points. The points were that despite bearing lower energy prices, Exxon Mobil is: meeting operating and investment goals; benefiting from its integrated operations through the diversified revenues of its downstream businesses; growing production impressively and importantly; and still generating significant cash flow and positive free cash flow. So, it intimates, you should ignore its 51% drop in quarterly earnings and instead look to its potential in a different pricing environment, which is implied will exist. Toward that end, the company offered some important reminders about the global demand outlook. It also strongly reminded investors of its always-on cost reduction focus. I’ll remind investors of the company’s ability to capture high grade production at better value today with its strong balance sheet. Exxon Mobil has diversified integrated operations that increasingly allow it to level off the costs and benefits of production and feedstock, though still imperfectly. Given its shareholder value focus, ability to capitalize on what for many others is an extremely treacherous environment, and with an energy outlook that isn’t so terrifying to me, I see XOM as a must buy on current share weakness. Still, I advise investors to add XOM and other energy stocks to holdings carefully now, in increments, while prices likely remain volatile near-term. See my full report on Exxon Mobil (XOM) here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

ConocoPhillips (COP) – You Better Bet Your Life

If you’re placing a bet on the nation’s leading independent energy exploration & production company today, you had better bet your life you are placing a bet on a turnaround in energy prices in the current environment. ConocoPhillips (NYSE: COP) recently reported its second quarter results, and really only one thing mattered, the difference in the company’s total realized price per barrel of oil equivalent (BOE). It looks as if the company can manage the burn if oil prices stay at current levels. Meanwhile, it just raised its dividend and assured investors it was safe; the dividend yield is a stabilizer for the stock today at 5.7% for as long as investors mostly believe in it. The company rightly notes that the price of oil is out of its control, but there are factors within its control. ConocoPhillips, as the world’s most important independent E&P, stands to benefit from the failures of smaller marginal players, some of which will have important assets to sell cheap today and tomorrow. Given this company’s current production positives and its ability to manage cash flow, and my expectations for oil price recovery either later this year or in 2016, I see COP primed for long-term investment today. More nimble risk takers might wait a month longer for a potential capitulation of oil prices ahead of the September Fed meeting and as China continues to weigh. See my full report on ConocoPhillips (COP) here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

The Truth About Oil Inventory & Storage Capacity - Part I

We have seen historic builds to a historic level of oil inventory. The dramatic news has been more than enough to lead major media to warn us all of the great danger that threatens. What if crude oil inventory, which is approaching storage capacity limits, breaches capacity? If that dam were to break, the flood of oil suddenly for sale to the market could drive oil prices fast and furiously to significantly lower lows, and drive a capitulation moment for the prices of energy sector securities. But all might not be lost dear friends. Energy bulls are hopeful that an approaching seasonal shift, which will halt the building of oil inventory and begin the draws of oil from storage, might precede that nightmarish scenario. And there is also the prospect that OPEC might act soon enough and in an important enough way to impact supply. The fact is, though, that we are not yet close enough to storage limits to raise such alarm. This is just another case of the media sensationalizing a story that has the interest of a good many Americans and certainly investors. Let me tell you the truth about crude oil inventory and storage capacity. Article interests (NYSE: OIL), (NYSE: USO), (NYSE: XLE), (NYSE: XOP), (NYSE: XOM), (NYSE: CVX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

OIL – Buy it Here

Over the last two weeks I have noted a trend in oil prices that can be exploited by investors and traders alike. Oil prices have slipped each of the last two weeks heading into the EIA’s Petroleum Status Report, on fear that the inventory data might show large inventory builds. However, once the report is released, despite it’s showing of inventory build, oil prices have found some support likely from long-term investment interests looking for forward developments. As a result, there’s an opportunity for entry in the iPath S&P GSCI Crude Oil ETN (NYSE: OIL) here. See the OIL Report here. Article also interests United States Oil (NYSE: USO), Energy Select Sector SPDR (NYSE: XLE), SPDR S&P Oil & Gas (NYSE: XOP).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.