The short play on Encana was stopped out due to rumors of a potential takeover offer by Royal Dutch Shell, but this would make little fundamental sense. Read More
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Encana's shares are falling due to the dropping price of oil and the difficulty they face in production. This makes the stock an excellent short play. Read More
The third quarter was a strong one for The Energy Strategist portfolios. And even after a sharp pullback for the sector at the beginning of the fourth quarter, the group is the best performing major sector in the S&P 500 this year. My long-term outlook for the energy sector remains bright, and the recent correction will soon offer an outstanding buying opportunity. In the short run, however, some groups--most particularly the deepwater drillers and some services firms--could see more downside. Read More
The long-awaited energy correction is now at hand. This does not change the long-term story for energy: There is still a secular bull market in the group that has several more years left to run. In fact, the quick, sharp selloff in most energy-related stocks over the past few days is nothing unusual. Every great bull market in history had its periodic pullbacks. Read More
Hurricanes Katrina and Rita have severely curtained production and refining capacity in the Gulf Coast region, delivering a vicious one-two punch which will continue to interrupt the energy business for at least the next three to six months. Read More
From a tactical perspective, it is now time to sell the remain half-position in Todco, though the fundamentals haven't changed. The stock has already run up significantly in recent sessions and is extraordinarily vulnerable to a pullback in energy or any hint of weakness in the contract drilling group, so now is a good time to take your gains. Read More
With Hurricane Rita now bearing down on the Texas Gulf Coast so soon after Hurricane Katrina, most of the northern Gulf production region is simply shut down. With the worst possible news already priced into energy prices the risk is that the storm will be less damaging that expected. If that happens, look for a short-lived yet rather sharp drop in crude oil and gas prices. Read More
At two recent investment conferences, I was struck by just how many speakers were trying to call a top in energy stocks, and in oil and natural gas generally. It seems that despite the group’s giant relative outperformance over the past two years, few are ready to believe the move is for real. Of course, calls for a top aren’t entirely misplaced; the simple fact is that every bull market in history had its corrections, and some of those shorter-term corrections can feel pretty severe when they occur. In the end, however, it’s the longer-term trends that generate the real wealth for investors. There are some simple ways for investors to hedge their portfolios. Read More
Estimates now suggest that around 8 percent of US refining capacity is shut down, as is the Louisiana Offshore Oil Port (LOOP), a major import point for foreign oil. The Henry Hub natural gas terminal in Louisiana is also closed--this is a key terminal for US natural gas. No one has any real idea how bad the damage to production platforms and Gulf drilling rigs might be. Katrina was a category 5 hurricane as it passed near some important Gulf drilling areas and hurricane force winds extended some 100-plus miles from the eye of the storm. The storm has also shutdown refineries which where already struggling to keep up with this summers gas demand, so we could see gas prices continue to rise. Read More
Given the strong market and tight supply in jackup rigs, Todco is an excellent summer play. Read More