Ed ,once again you have called the bottom of this oil cycle (vbg).
At least if you are departing us ,the oil gods have again agreed to raise prices ,this should raise some of your stocks up ,allowing a little less pain on exit . I really believe you should play your hand a little longer ,say Nov-Dec . I doubt that prices on PKC,ROH and HEC could be any lower and there is a higher probability that they could be substantially higher . That would be the time to exit (IMO).
Thursday June 4, 6:55 pm Eastern Time
Oils, services rally strongly on Amsterdam talks
NEW YORK, June 4 (Reuters) - Shares of oil companies from the majors to independents and service providers rallied strongly on Thursday as talks to cut output from major producers Saudi Arabia, Venezuela and Mexico continued in Amsterdam.
By 1236 EDT the S&P Oil International Index, which measures the performance of major oil shares, rose 1.4 percent to 812.83 points, while the Dow was only slightly higher. ''We think that the major oil producers made the decision in March at the head-of-state level to
restore $18-$20 oil, but simply underestimated the size of the cut necessary to achieve this goal,'' said Schroder & Co. analyst Michael Mayer.
On the Amsterdam news, the West Texas Intermediate crude blend rose $0.56 cents to $15.37 a barrel. Mayer said that the odds were three out of four that a cut of 500,000 barrels per day would be made by producing countries after the 1.5 million barrel per day cut made in March.
Texaco Inc. (TX - news) rose 1-3/16 to 57-1/2, Chevron Corp. (CHV - news) 1-1/2 to 80-7/16, Mobil Corp. (MOB - news) 1-5/16 to 76-7/8, and Exxon Corp. (XON - news) 7/8 to 69-7/8. Also, shares of Amoco Corp. (AN - news) rose 3/4 to 41-1/16 and ARCO (ARC - news) added 1-7/8 to 79-5/8.
''The major oil stocks are very attractive and should substantially outperform the market in a relatively short period of time if we are right,'' Mayer said. The bounce in oil prices also helped push the S&P Oil Drillers Index up more than three percent to 4,291.08, but some analysts were less bullish, saying that the proof of the Amsterdam pie will be when cuts are implemented.
''We are getting the discussion. This Amsterdam accord sounds good...but is this deal etched in stone,'' asked James Wicklund, oil services analyst at Dain Rauscher Wessels.
The drilling and service sector, which has been depressed by weak oil prices and the capital spending cuts by the oil industry, were among the biggest gainers on the New York Stock Exchange on Thursday.
Ensco International Inc. (ESV - news) rose 1-8/16 to 24-5/16.
''Volatility will continue, we do expect this to be net net positive for oil prices, but it is step one of a long walk,'' said Wicklund.
While Wicklund is bullish longer term on the earnings visibility of the oil services sector, he said that volatility would provide an entry point for investors at a lower price than today. |
