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Before The Bell: Peabody China; Crude Oil's Nigerian Nightmare


Peabody is making moves in China. Nigeria is making moves to collect more profits.

Morning Perspective: Peabody China

WSJ reports Peabody Energy (BTU), the world's largest coal company, is close to signing a deal to develop a mine in China, the world's largest coal market. The company is aiming to develop an open-pit coal mine which could cost a few hundred million dollars and produce approximately 50 mln metric tons of coal per year. Potential partners include China Shenhua and Huaneng Power International (HNP). For more, read Professor Guy Adami's Peabody Energy An Alternative To Crude.

From the Bull Pen: Professor Adami says that with high crude prices, alternative energy remains attractive. Those bullish BTU may place sell-stops below $56.50. A tertiary play may include Massey Energy (MEE); sell-stops below $35.00.

From the Bear Cave: Coal bears may see a double-top formation tracing out in Arch Coal (ACI); buy-stops may be placed above $42.00

Crude Oil's Nigerian Nightmare

WSJ reports Nigeria, Africa's largest oil-producing country, is planning the largest overhaul of its petroleum industry in decades. Nigeria President Umaru Yar'Adua has proposed, amongst other changes, creating a national oil company to manage the country's oil and natural gas resources, and limiting the dominance of foreign oil companies in the country. According to Nigeria's oil minister, the planned changes hope to rebalance the relationship between the state and foreign energy companies. Read energy specialist Professor Adam Michael's Trends Affecting Oil Price.

From the Bull Pen: Professor Michael remains bullish on the oil service sector. Upside plays may lie in Schlumberger (SLB) and Transocean (RIG), sell-stops below $93.75 and $131 respectively.

From the Bear Cave: Analyst interpret "rebalancing the relationship" as simply handing over profits. Those bearish may play the downside in Chevron (CVX), buy-stops above $94, and Royal Dutch Shell (RDS.A), buy-stops above $85.50.

Click on Minyanville's Stocks To Watch for more company-specific ideas.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.72%, Nikkei -2.48%, Sensex -1.33%, Taiwan -3.57% and Shanghai -2.70%.

A quick look across the pond finds the CAC -2.14%, DAX -1.00%, FTSE -2.36%, ATX -1.36%, Swiss Mkt. -1.72% and Stockholm -2.01%.

A Look At Commodities

Crude oil is up this morning 0.21 to 94.60. Gold is lower -6.0 to 812.80. Silver is down -0.10 to 14.72, and copper is down -4.3 to 299.30.

As of 9:15 AM EST, S&P futures are lower by -11.40 points, and Nasdaq futures are down by -18.75 points.

On the Radar


8:30 Retail Sales: 0.5% cons
8:30 Retail Sales ex-auto: 0.6% cons
8:30 PPI: 1.5% cons
8:30 Core PPI: 0.2% cons
8:30 Initial Claims: 338 k prior
10:00 Business Inventories: 0.3% cons

Click here for the full trading radar.

Have a great day, Minyans! Good luck!
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