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Two Ways to Play: OPEC Unlikely to Cut Supply


Strengthen your portfolio in good times and bad.


OPEC supply cuts unlikely

The Organization of Petroleum Exporting Countries (OPEC) is unlikely to cut supply at its next meeting in March.

According to Reuters, Qatar's oil minister Abdullah bin Hamad al-Attiyah said yesterday that the markets are efficient and he doesn't believe production increases are necessary as there is no evidence of a shortage of supply.

Fellow OPEC member Kuwait also made similar statements last week with the country's minister describing oil at $82 as being "fantastic."

Meanwhile Mohammed al-Hamli, oil minister of the United Arab Emirates, said prices are reasonable but he thinks the markets are actually a bit oversupplied. Oil stocks are around 58-59 days of forward demand, he said, which is about six days more than the 52-53 days OPEC would like.

Crude oil in the US traded at 78.07 this morning, which is within the $75 to $80 range OPEC said was fair to consumers and producers.

From the Bull Pen: For oil related exposure, look to Schlumberger (SLB). On a longer timeframe, the stock appears to be just getting started.

From the Bear Cave: Crude oil made a key reversal on the weekly chart, spiking to a new high and closing below the previous low. If you're an oil bear, consider using the oil ETF (USO) for a quick downside trade. A buy stop can be set near $41, or 2% above entry.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.83%, India -0.88%, Hang Seng 1.02%, Shanghai 0.30%, and Taiwan -1.07%.

Across the pond, we see the FTSE -0.82%, CAC -0.74%, DAX -0.81%

As of 8:20 AM EST, S&P Futures are trading -4.00 to 1128.25. Nasdaq futures are -0.50 to 1862.00.

A Look at Commodities

Over in commodities, crude oil is -0.65 to 77.72 while gold is +0.600 to 1131.00 this morning. Silver is +0.118 to 18.550 and copper +0.0325 to 3.3985.

The dollar Index is +0.4850 to 77.6900.

On the Radar

Tuesday, January 19


09:00 Net Long-Term TIC Flows

Click here for the full trading radar.

Welcome back! Have a great day!

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No positions in stocks mentioned.

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