My head is spinning with conflicting views regarding the oil markets. The business media is having a field day taking about oil prices. Mr. Oil Expert, has the price oil hit a bottom? Is it time to add oil stocks to your portfolio? YES because rig counts are going down, capital spending budgets have been cut and oil futures are pricing oil at the $60 a barrel for year-end.
The next interview is from another Oil Expert who answers the same questions with NO! Oil production hasn’t dropped yet, oil storage faculties will take another 10 weeks or more to fill up. Oil prices will continue to fall once all the storage faculties are full. The recent rally is based on hedge funds covering their short positions driving oil futures higher. Plus there are rumours that Saudi Arabia is using oil supply to put pressure on Russia to stop supporting the regime in Syria.
The price of oil has fallen back to $49.00 level today due mostly to an increase in oil inventories. The real head scratcher for me is oil rig counts are going down and capital spending on oil drilling has been cut, yet (oil drilling companies) Halliburton & Baker Hughes stock prices are up year to date.
Keep in mind if you plan to trade oil stocks that hedge funds and mutual fund managers tend to buy into a turnaround before it actually happens. I am still bearish and bought some put options on a Canadian oil company in my play money account. I also bought some Southwest Airlines for my investment club.
What do you think? Are you trading these big swings in oil stocks?
Smart Money 
Another solid blog post. Thanks for the information.
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Yes, like you first place I looked was airline stocks!
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I hope that we both make some money in airlines.
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I’m still going in on Canadian stocks. Bought some Bombardier today ahead of their earnings release next week. I’m also looking at the Hudson’s Bay Company.
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I like Hudson’s Bay based on Target leaving Canada but Bombardier just lay-off 1000 workers in Mexico last month. Too much of a long shot for me. I bought Magna, better management and car sales are booming.
Bombardier stock is down today, (Feb 12), they have to recapitalize the company.
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Yes. The Hudson’s Bay’s real estate alone is worth $45 per share. Bombardier is pretty good because of the contracts that they might get. China wants to order supersonic trains from them. They’ve also received quite a few orders in the past 2 weeks. Magna would be a smart decision. Low gas prices mean more car sales.
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I am trading. I can’t predict the markets or oil short term, but there has been some value recently at these prices/evaluations, especially if you are investing for the long term (20+ years for me). I bought PrairieSky Royalty, (TSX:PSK) below the IPO price, at a 4.8% yield. May buy other stocks if the price oil crashes down again. I like buying good stuff cheap!
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As someone “in the biz” for over 20 years, I think this is just another “cycle”. I do remember $9 oil and survived all layoffs.
We are at the whim of the commodities market like everyone else.
Also, we don’t get free gasoline.
And “no” I don’t day trade-those who jump off the roller-coaster are the ones who get hurt.
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