Oil ETF Central

Oil ETF Strategy For August – Short Oil Stocks, Long Price Of Crude Oil

admin — Fri, 30 Jul 2010 18:08:51 +0000

Taking a look at the oil ETF tracking data, I see an interesting pairs trade setting up – go short oil stocks, but long the price of crude. This is a strategy that will likely benefit more should the market stumble up here because the price of oil stocks will undoubtedly move faster than crude. Let’s take a look at the data..

I know it’s hard to read. I had to squeeze it into the page, so it’s a bit distorted, but focus on one element of data in particular. The DI 15 and DI 30 scores are proprietary indicators of SelfInvestors.com that measure the amount of demand in a stock over 15 and 30 trading days. Demand is measured through price and volume so high volume moves up indicate high demand while high volume moves down indicate very low demand. Lower volume moves are more weighted less. Taking that into consideration I see very weak demand in shorting the price of crude oil (see ultra short crude oil ticker DTO) with DI scores of -10, 12. Now take a look at the oil ETF showing the greatest demand. That’s the Ultra Short Oil & Gas ETF (DUG) with DI scores of 3,3. So, if you want a decent trade with relatively less risk, you could short oil stocks and go long on the price of crude or if you’re feeling lucky, just short oil stocks.

You can get similar data for all oil ETFs on the home page here at Oil ETF Central

Despite Offshore Oil Drilling Moratorium Due To BP Oil Spill, Permits Being Issued

admin — Wed, 02 Jun 2010 23:46:19 +0000

It wasn’t too long ago that Interior Secretary Ken Salazar said that an extended moratorium of 6 months on deep water drilling was needed while the Feds reviewed and investigated. So, it’s not surprising that folks are up in arms that the agency issued a new offshore oil drilling permit to Bandon Oil & Gas today. Adding insult to injury, the permit was issued for a site about 50 miles off the coast of Louisiana.

So what’s the deal? Apparently, the restriction is for sites greater than 500 feet while the Bandon Oil site is 115 deep. However, as the New York Times reports, permits are still being issued because the moratorium only bans new drilling, not existing projects. There are a host of other issues that clearly indicate offshore drilling is still alive and well. It appears the government bark is more vicious than its bite and have misled the public on this issue.

Geothermal Industry Faces Same Challenges As Oil Industry

admin — Thu, 22 Apr 2010 00:32:41 +0000

Igor Kocis, CEO of Geothermal Anywhere in Slovakia, discusses the emerging UltraDrill technology in order to drill to greater depths, where the energy and heat is greater which is needed for electricity generation. In Slovakia, the technology isn’t yet there to extract geothermal energy in mass quantities for electricity generation. It’s the billion dollar question I suppose as companies are trying to figure out ways to cost effectively drill deeper and deeper. Reminds of another industry.. hmmm.. the oil industry perhaps?

Crude Oil Price Breaks To New 52 Week High.. $100 Barrel Next?

admin — Tue, 06 Apr 2010 02:57:16 +0000

The price of crude broke out to a new 52 week high last week and looks poised to test $100 in the coming weeks. The 82 – 84 level had been a tough level of resistance for several months, but this firm breakout means that this level of previous resistance now acts as support and a potential spring board on the way up to $100. I had written earlier about a potential triple top in crude oil, but that pattern has now failed with this breakout.

At $100/barrel, that really starts to wreak havoc on an already shaky economy, so it will be interesting if the overall market begins to price that in.

Price Of Crude Holding Big Support At $70

oil etf trader — Wed, 10 Feb 2010 17:12:00 +0000

It’s time for another crude oil price update! After hitting resistance again around the $80 – 82 level, it’s come all the way back to the $70 level which is a critical level of support. It happens to be the 200 day moving average as well. If crude closes below the $70 level, it could set up a sustained move lower for some time. The $65 level would be a likely first target, but I’d expect a move close to $60 if the $70 level is breached.

Here’s a look at the chart

Crude Oil Springs Back Toward $80/barrel on Iran Protests, Terror Concerns & Russian Threats

oil etf trader — Tue, 29 Dec 2009 04:16:39 +0000

The price of crude recently hit the first level of support around $70 and sprung off that level with some gusto as we approach the end of 2009. It’s getting back up to the $80 level as terror concerns, Iran protests and Russia supply threats raise supply concerns heading into the new year.

Antigovernment protests have flared up in Iran again leaving eight dead .. expect more of that to continue in 2010. The attempted take down of an airliner over Detroit this weekend has also rekindled terror concerns especially considering Al Qaeda gas warned of more retaliation. Throw in more Russian threats of cutting off oil supplies to Europe and you have the ingredients for higher oil prices and fertile ground for short covering.

With crude oil resistance levels at $75 and $77 taken out, it appears likely that a retest of resistance around the $82 level is coming over the next few weeks.

Oil Stocks Breaking Down As Crude Price Falls Below $75

oil etf trader — Mon, 07 Dec 2009 18:46:11 +0000

In the past two trading days we’ve seen some significant action take place in the price of crude and in oil stocks as a whole. On Friday, the dollar spiked higher and continues to show signs of at least a short term bottom at these levels. As the dollar climbed, oil stocks continued to show signs of deterioration on Friday as many break through key support of their 50 day moving averages. Just a take a look at the live oil charts page and you’ll see all the major oil ETF’s now trading below their 50 day moving averages. However, it wasn’t until today that the price of crude dropped below the key $75 level. With the dollar rocketing higher Friday, it was surprising to see crude hang in there above $75, but it didn’t last long. The longer crude prices stay below $75, I think the greater the chance we test the $65 level. Take a look at key support and resistance levels of the price of crude here.