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Two Ways To Play: Crude Won't Quit


Strengthen your portfolio in good times and bad.

According to Bloomberg, crude oil recovered from morning weakness to rise more than $2 a barrel today. Prices for July delivery fell as low as $125 this morning but rebounded to settle below the day's high.

Morgan Stanley economist Richard Berner cited supply constraints "against the backdrop of still-strong global demand." Berner acknowledged that high prices could curb demand in the developed economies, but that these supply constraints could easily take Brent crude to $150 a barrel.

The statement echoes similar comments recently made by Goldman Sachs Analyst Arjun Murti that supply constraints could catapult prices to $150-$200 a barrel over the next six-24 months.

See Professor Mauldin's What's With The Price of Oil?

From the Bull Pen: Bulls can continue to play the oil ETF (USO) and might consider entries near the $100 level.

From the Bear Cave
: Bears believe a correction is inevitable with much of the move in crude oil being on speculation. These bears might consider positions in the inverse oil & gas ETF (DUG).
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No positions in stocks mentioned.

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