Two major drillers announced they’re cutting production in the Bakken Shale of North Dakota. One’s cutting by 10%, the other by 20.
There’s more than 500 million barrels in storage in the U.S. The entire industry must cut by 10% in order for prices to rise to where it can be saved! Yesterday’s news was nowhere near salvation, friends. Price is at $33, and stocks mounted a relief rally… on even LOWER volume. That’s real conviction, folks. (sarcasm dripping here)
And, the earnings estimate average for all the 500 dropped another penny, and is now off by 8% in just the first 2 months of this year. Starting paying attention for the “R” word! It’s coming. P/E on estimate, after ‘rally’ is now at 18.94!
I teach my semi-annual 5 Essential Principles of Successful Stock Market Investing class next Tuesday nite for an adult continuing education school. Is that ever going to be fun! I love bringing this!
Oil’s still rising… Venezuela’s wanting to talk to OPEC members about capping production… so far, none of the others have responded. They would all cheat and lie, and there would be no real cap anyway. Watch this rally attempt a move on its 200-day moving average, another 3% higher, if we can get there… I just might sell all the rest.
Stocks are moving with oil, and oil is moving up… for now. The fundamentals have not changed, and eventually, when this is realized, oil will come back down… and, so will stocks. So, if you are inclined to get defensive, this is your opportunity to do so. If we get to the 200-day moving average, we’ll really learn what this market is made of. Will volume, and conviction, finally present itself today? It hasn’t so far!
Here’s to your successful investing!
Harold F Crowell