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Two Ways to Play: OPEC Unlikely to Cut Supply

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Strengthen your portfolio in good times and bad.

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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

Economics

09:00 Net Long-Term TIC Flows

Click here for the full trading radar.

Welcome back! Have a great day!

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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