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Contrarian oil play

Posted July 22, 2008

Contrarian oil play Despite temporary pullbacks, crude oil prices are again setting new historic record highs. But as funds liquidate their mortgage lender and bank stocks to pour them into oil and commodities, the beginnings of an alternate money flow are becoming visible. Click here to view!

 

by J. Christoph Amberger

Baltimore — (TFN): Despite temporary pullbacks, crude oil prices are again setting new historic record highs. Some economists look at additional demand from the booming Indian, Chinese and Arab economies as the cause for increased prices. Others — especially those who have not been able to measure a doubling of demand in a year… or an increase of 50% in six months — consider rampant speculative activity by funds and institutions to be the driving force.

Saudi Arabia, Venezuela, and Libya consider that supply is in synch with demand.

As prices increase, the group of oil bubble cheerleaders becomes bigger daily.

Predictions of triple-digit gains in oil prices used to be the domain of OPEC oil ministers. These days, those who’ve made a living scoffing at the foolishness of Internet stocks and U.S. real estate bubbles are pulling out all the stops: The sky’s the limit for gold and oil.

Texas oil baron T. Boone Pickens recently projected that oil prices “are headed for US$150 a barrel by the end of the year”. After the recent speculation-driven run-up, that seems downright miserly. So he upped the ante, indicating he wouldn’t be surprised “to see them increase further to US$200 a barrel after year-end”.

He just received assistance from OPEC President Chakib Khelil, who predicted that the price of oil will climb to $170 a barrel before the end of the year, based on the dollar’s decline and political conflicts.

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Of course, the dollar’s 7% drop against the euro this year still only goes so much to justify price increases of 50 and more percent in oil prices. And political conflicts aren’t exactly news any more: Not even the Iranian president bothers listening to his own threats any more.

As fund managers rushed to liquidate their holdings from construction, mortgage lender and bank stocks to pour them into oil and commodities, the beginnings of an alternate money flow are becoming visible.

Insiders in certain oil-related industries are now buying back considerable positions of their own companies’ shares… stocks that have been taking a beating in the last six months as increasing cost of crude oil translated into dwindling profit margins.

We have compiled a comprehensive report on this phenomenon for you. Get it free, with no strings attached, at TFN’s Hot Stock Confidential page — and be ready to profit when crude oil snaps back from its speculative highs in increments of twenty, thirty, even fifty dollars.

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Posted by J. Christoph Amberger · Filed Under Featured Video, Podcast, Politics, Videos 

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