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Two Ways To Play: OPEC On Slippery Slope

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Strengthen your portfolio in good times and bad.

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OPEC Fights For Higher Oil

The Organization of Petroleum Exporting Countries is ready to make the biggest supply cut in a decade to stop the plunge in crude oil. The cartel, which accounts for over 40% of the world's oil production, will meet tomorrow in Algeria and is expected to cut output targets by at least 2 million barrels a day, according to Bloomberg.

The plunge in crude prices is creating budget shortfalls globally. Last week, OPEC member Ecuador said it will default on foreign debt. Researchers at Citigroup say the U.A.E., Kuwait, and Qatar need crude prices above $55 to balance their current accounts and fiscal spending. This morning crude was up nearly 6% to $49 a barrel in electronic trading on the New York Mercantile Exchange.

From the Bull Pen: Consider the oil ETF (USO). Sell stops can be set in the $36-37 range. Or even oil service stocks like TransOcean (RIG); sell stops can be set below Friday's low near $53.

From the Bear Cave: Bears can still play the dollar which may continue its downtrend for the short term. Consider the dollar bearish fund (UDN) with a sell stop near $25.

For more on OPEC, see Hoofy and Boo's always astute report:




Quick Check Around the World

Asian trading closed with the Hang Seng 1.96%, Nikkei 5.21%, Sensex 1.47%, Taiwan 2.96% and Shanghai 0.52%.

Glancing towards Europe, we see the CAC 0.15%, DAX 1.17%, FTSE 0.22%

As of 8:15 a.m. EST, S&P futures are trading -3 to 882, and Nasdaq futures are +3 to 1218.


A Look At Commodities

Crude oil is trading +2.07 to 48.33. Gold is +6.60 to 825.50. Silver is +0.151 to 10.350, and copper is +2.650 to 143.25.

The dollar index is -0.652 to 82.983.


On the Radar

Economics

08:30 Empire Manufacturing
09:00 Net Long-Term TIC flows
09:00 Total Net TIC flows
09:15 Industrial Production
09:15 Capacity Utilization

Click here for the full trading radar.

Happy Monday! Good luck!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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