Keith Fitz-Gerald says investors have the chance to profit from the contango phenomenon in oil markets. The implied higher future oil prices mean an opportunity to buy oil-related ETFs now at a bargain price. For a safer option, Keith picks two oil transportation companies that pay healthy dividends.
Crude looks like it is entering its own type of recession this year, with the International Energy Agency predicting a fall in oil consumption for the first time in 25 years. But David Newman still thinks there are huge profits to be had in the oil industry. He recommends an Oil & Gas ETF (NYSE:IEO) and Oil Services ETF (NYSE:OIH), using a ‘protective put strategy’ to cover against downside risk.
Oil rises above $47 a barrel… U.S. weekly oil stocks data expected to show bearish rises… OPEC compliance to cuts at 66 percent for November
Oil is still one of the best bets for long-term gains says Greg Guenthner. In the midst of blind market panic, investors are forgetting that crude is a finite resource facing unquenchable demand. It will rise to record highs again. And when it does, oil stocks will soar.
Crude oil prices slipped below $60 a barrel yesterday, taking the black goo to a 20-month low. But that doesn’t change the fundamentals. Oil production is levelling out, and will soon begin to fall. Andrew Gordon expects crude to soar back toward $200 after a short pause. And Big Oil companies that are still investing in new projects will shine.
“It was the best of times, it was the worst of times.” Justice Litle thinks Dickens’ classic line provides an apt description of today’s markets. Sure, this year has been hell. But it has also created some amazing opportunities for contrarian investors. Justice says this is most apparent in the oil and natural gas market, where irrational risk aversion has made most people forget the fundamentals.
The stock market is due a bounce after the election, regardless of who wins. But after that, the voter’s choice will have a big impact on industry winners and losers. Rick Pendergraft says biotech and alternative energy stocks should get a lift under Obama, while defense and oil will benefit from a McCain victory.
One of the biggest collapses this year hasn’t been in stocks. Crude oil has lost half its value since it peaked at just under $150 a barrel in July. Today, a barrel of the black goo sells for just over $80.
Outstanding Investments co-editor Byron King says “it seems like the investment locomotive — energy, resources and related infrastructure — has derailed.”
Does this mean you should sell your resource stocks? Byron says selling now would leave a lot of value on the table. That’s because resource stocks are now priced well below their intrinsic value.
It remains to be seen whether fear takes control of the markets again today. So far, global equities have seen a reprieve from the brutal pounding they suffered last week.
The crash in stock prices has most investors spooked. But it’s worth keeping you head while others lose theirs, says Strategic Investment editor Dan Amoss.
Right now, there are some very healthy resource stocks are shockingly cheap. What Dan calls “screaming bargains.”
Last week I tried to open a savings account for my son. The credit union offered me a 1% interest rate… If I had given my money to the credit union, I would have guaranteed my son a 5% annual loss.
