Oil prices are higher this morning despite news of another build up in crude oil inventories. Oil prices rose 67 cents at $51.04/bbl in early morning trading. Many of our favorite oil stocks jumped on the small rise in crude prices, which adds to our opinion that any meaningful decline in oil prices will be temporary. In fact, it looks like the hedge funds are buying back their energy positions after booking profits for the past few weeks.
I don't think we should get jumpy with the oil stocks just yet. After today's knee jerk rise in oil prices, 1 more meaningful decline may be in the works. Obviously, if you do not have a position in any oil stocks, today's prices are better than the prices 2 weeks ago.
On a related subject, the energy hogs in the far east are beginning to throw around their weight with Japan. The Chinese are criticising the Japanese because they say a school textbook plays down Japan's brutality during World War II. Of course, the real reason for China's criticism is due to the fact that both countries are trying to lay claim to the Chunxiao gas field in the East China Sea. The Japanese plan to drill in the East China Sea, and this brought protests from China who has also started exploring in the region.
