Daniel P. Collins
Crude oil has broken through levels not seen since 2014 and it appears to be entering a new phase, ending the downward super cycle that took crude from above $100 per barrel to under $30, and entering a phase where both supply and demand are expected to grow.
Modern Trader staff
We reached out to TipRanks to get a list of their top analysts in the energy sector along with their top current picks. TipRanks does not separate out energy from the broader sector of Basic Materials, so these analysts come from the Basic Materials sector with a focus on energy. Because the energy sector, along with the broader market, suffered a correction at the beginning of February, many of their selections offer a better point than first selected.
“What is Aramco?” When asked whether it is an international oil company or a national oil company former Aramco CEO and former Saudi oil minister Ali al Naimi said, “I can tell you – and I’m not biased — that Aramco is no less than Chevron or ExxonMobil.” He had not quite answered the question. “We are a by-product of those companies; and we are different from, say, Kuwait National Oil Company,” Naimi continued.
Daniel P. Collins
Book Review Saudi Inc.: The Arabian Kingdom’s Pursuit of Profit and Power By Ellen Wald – Pegasus Books Publication date: April 2018, 263 pages Reviewed by Daniel P. Collins
Quant Cycles (formerly called the Cycle Projection Oscillator) is a technical tool that uses proprietary statistical techniques and complex algorithms to filter multiple cycles from historical data, combines them to obtain cyclical information from price data and then gives a graphical representation of their productive behavior. Other proprietary frequency domain techniques then are employed to obtain the cycles embedded in the price.
A look at long-term trends of commercial interest in the CFTC’s “Commitments of Traders” report.
Ecopetrol SA is an energy firm that is up 20% year-to-date, 86% over the last 12-months and sports compellingly bullish technicals after testing support at the 50-day simple moving average following the early February sell-off. Earnings have been mixed with gains of 2.1% and 6.4% during the last two quarters.
Halliburton is the second largest oil service company in the world with a market cap of $46.53 billion. More importantly, Halliburton is the leader in hydraulic fracturing, the largest oil field service market, with its revenue skewed to the United States.
With a market cap of $13.5 billion, National Oilwell Varco is a leading manufacturer of drilling equipment sold primarily to drilling contractors, marine rig shipyards in Korea and Singapore, and other rig fabricators from plants largely located in Texas. Its revenue is heavily dependent on oil and gas producer and drilling contractor capital spending and the outlook for drilling activity; both of which are sensitive to changes in the price of oil.
With a market cap of $61 billion, ConocoPhillips ranks as the largest independent U.S. crude oil producer. It announced preliminary 2017 proved reserves of 5.038 billion barrels of oil equivalent after asset sales of 1.904 billion barrels of oil equivalents during the year. Reserves are widely scattered in Alaska, the lower 48 states, Canada, the Asia Pacific Middle East region focused on liquefied natural gas, and in the North Sea and Libya.
Howard Lindzon is an angel investor, market maven and a serial entrepreneur. We sit down with the founder of Stocktwits, who launched investment newsletter Peloton this past August, to discuss markets, bitcoin and the millennial generation.
Daniel P. Collins
Emil van Essen has been involved in the managed futures world for 25 years. He has run successful brokerage operations, hedging programs, commodity trading advisors and commodity pools. Van Essen has a passion for finding new sources of alpha. Perhaps it is because he came to the world of managed futures late in the game when the trend following space was crowded.
Daniel P. Collins
April is historically a strong month for equities. It is the best performing month for the Dow Jones Industrial Average, third best performing month for the S&P 500 and fourth best for the Nasdaq Composite Index. It also represents the end of the best six-month period in the market. This is where the “Sell in May and go away” strategy comes from.
It ’s often a complicated question, and when it comes to markets, the “why” often takes a backseat to the “what” that is happening and “how” it should be traded. Nonetheless, it can be worthwhile to understand why a market relationship occurs, so that you can adjust more quickly than the competition when the relationship inevitably changes.
Altice USA Inc. (ATUS) is engaged in the telecommunications, media and entertainment business. The company operates in two segments: Cablevision and Cequel. The company provides residential and business services across 20 states, digital cable television, high-speed Internet, voice and data products and services. It also provides hyper-local news and programming created specifically for the communities. Its brands include Suddenlink, Optimum, Lightpath, Altice Media Solutions and News 12 Networks.
Crude oil might have hit the gas pedal, but equity investors have been left on the sidelines as energy stocks continue to struggle even as the price of crude rallies. Energy stocks seem like an easy way to play the recovery in crude prices, but the disappointing performance of most energy funds tells a different story.
In 2007 crude oil began the year priced at $60 per barrel. By July 11, 2008, it rose to $145.66, which was a nearly 150% increase, and a 31.6% increase in a little more than half a year. Southwest Airlines (LUV) was the only airline that hedged its largest variable cost. Southwest was paying $30 per barrel less than most of its competitors. In a little over five months later, on Dec. 26, WTI had dropped all the way down to $32.34. That’s a 77.8% decrease.
The Commodity Futures Trading Commission’s Commitments of Traders report is a useful tool for traders to determine market trends and to predict major turning points. Here we walk through our recent Discretionary COT signals providing examples in interest rates, forex and energy of how we use the COT report to swing trade the commodity markets on a daily basis.
The energy sector ranked the last in sector performances in 2017. In June 2017, crude oil traded at a low of $42.37 per barrel and many analysts expected lower prices with a target of $40 or lower as energy market sentiment has been bearish. Crude oil turned bullish in August 2017, when it broke a pattern of lower lows and lower highs by failing to take out the June low.
There are multiple fundamentals pulling crude in different directions, which also create opportunities for a strangle trade.
Recently, the Trump Administration introduced trade barriers on the imports of washing machines and solar products. This move was based on a World Trade Organization rule that allows countries to re-introduce trade barriers in cases where evidence clearly suggests that “a domestic industry is injured or threatened with injury caused by a surge in imports.”