Bullish Picture for Energy Once Economy Picks Up
Source: Seeking Alpha, Stephen Schork (3/17/09)
"Placing a chokehold on U.S. domestic energy suppliers will only increase the import of foreign energy."
The four-day "USO roll" came and went without making a headline. Surprising? No. Once a front runner is exposed and brought upon regulatory eyes, it quietly leaves and moves onto the next market. Yesterday, OPEC decided to leave output unchanged leaving the door wide open for a test of the lows.
The weekly DOE numbers showed net U.S. supplies of crude oil rose to an all-time high. Look for DTO to form a trading range between $170 and $220. A break out of this zone will indicate a larger move is imminent.
The best thing holders of DXO can hope for is for OPEC to turn off the crude spigots. If they don't, DXO is going to slowly drown in crude oil. Reports out of Vienna will be watched this weekend to see if OPEC will throw a lifeline to oil, and thus DXO.
AT&T (T) announced a $565 million deployment of 15,000 natural gas vehicles over the next 10 years - the largest corporate commitment to clean energy to date. This is a very supportive development for the long term. In the short term, however, we see no change.
The equity markets finally enjoyed a rally this week and XLE had a healthy bounce from four year lows.
According to Dr. John Topper of the IEA's Clean Coal Center, the world's dependence on coal for more than 40% of its power needs is not showing any signs of decreasing. If anything, consumption is poised to increase over the next two decades.