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Strategies & Market Trends : 50% Gains Investing

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From: Dale Baker	7/4/2012 5:16:23 PM
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From the most recent Energy Prospectus Group newsletter: "The second quarter was rough on ... anyone invested in the energy sector. Energy stocks got hit a lot harder than the general market due to falling oil prices and all the noise coming out of Europe that demand for energy would fall sharply. There is no argument here that this is a very cyclical business. Sentiment can change quickly as we saw last Friday. Just a smidgeon of hope from Europe and the price of oil jumped over 7 percent. Friday’s price action was probably the result of panic short covering but WTI is now back in the range it was coasting along in for the first three weeks of June. All we need now is for crude to stabilize in this range for awhile. The current share prices of most of the energy firms can only be justified by much lower oil & gas prices. IEA and OPEC are forecasting much stronger oil demand in the 3rd quarter. Global demand for liquid fuels of over 91 million barrels per day is now possible by year-end (up from 88.7 MMBbls/day in the 2nd quarter). This seasonal demand increase should firm up oil prices but until the market sees clear evidence, the equities are likely to be range bound. Second quarter results for .... companies are expected to be solid with increasing production offsetting the decline in oil prices. Strong second quarter results plus evidence of increasing demand for energy could fuel a nice rally in the energy sector. My bet is that companies with double digit production growth will do quite well."

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