Joe, thanks for the TA on PCTH. We're also interested in ESV. The price of oil tumbled on Fri. to welcome our entry into this stock. Here's an article from the WSJ explaining what happened:
January 30, 1998<Picture>
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Crude Oil Futures Fall Sharply
As Tension With Iraq Increases
An INTERACTIVE JOURNAL News Roundup
Crude oil and petroleum products-futures finished sharply lower Friday on the New York Mercantile Exchange as traders cast a wary eye on the escalating tension between the U.S. and Iraq.
Most traders said the drop was triggered by statements from U.S. Secretary of Defense William Cohen. He called for a "more unified and solid" stance among U.S. allies and the United Nations in dealings with Iraq to limit chances for a military conflict.
March crude oil shed 61 cents to $17.21 a barrel after falling to a session low of $16.90. April crude lost 59 cents to $17.37 a barrel.
Among petroleum products, March unleaded gasoline slipped 2.20 cents to 53.30 cents a gallon, off its session low of $52.50. March heating oil dropped 1.79 cents to 48.11 cents a gallon.
Mr. Cohen told the House Banking Committee on Asian Economic and Security Matters, "We think it's very important that the United Nations remain solid and unified .. the more united and solid the less likely conflict will be."
"We were poised to head lower and we were going in that direction, but when that headline hit, the selling picked up," said a trader in the crude oil pit.
Another trader said the market took that headline to mean that a military strike against Iraq isn't a foregone conclusion.
Stop-loss sell orders were triggered on the way down, which kept downward momentum going. But after bottoming out at $16.90, buyers boosted March crude off its lows.
Early weakness in the February contracts also contributed to March crude oil's decline, traders said.
The threat of a military attack on Iraq to punish the country for not cooperating with U.N. arms inspectors has been driving large speculative bears, including hedge funds, to cash in their positions this week.
Until the Iraq situation flared, the market has been focusing on oversupply fears. A rise in output from the Organization of Petroleum-Export Countries, a drop in demand from Asia, low winter product demand and the threat of an expanded Iraq oil-for-food sale all teamed up to spark those concerns.
Thursday's news that U.N. Secretary-General Kofi Annan accepted a final draft of a report seeking an expansion of Iraq's oil-for-food sale helped revive those fears, said an analyst.
There was no figure cited, but a U.N. diplomat said Thursday that the report would say Iraq should be allowed to export between $3.3 billion and $4 billion in oil every six months. The current oil-sale allotment is about $2 billion. |
