Crude Oil ended the yesterday down -$1.11 to $62.79/bbl. The "Big Boys" that I mentioned in the quarterly newsletter (Commercial Traders) are still expecting the price of oil to fall. How low?
As I had mentioned recently, a break below $62-63 would open the floodgates for a drop to the $55/bbl level. Of course, this would be good news for the stock market, and would represent a good buying opportunity in the oil patch.
On the NY Mercantile Exchange, COMMERCIAL TRADERS extended their net short positions in crude to 26,329 contracts. This represents a doubling of their shorts by 13,226 contracts. As far as gasoline futures are concerned, the COMMERCIAL TRADERS reduced the length of their contracts which leads us to believe that a drop in gasoline prices will occur, but will lag the drop in oil.
For you northerns out there, the news is not good. The "Big Boys" have extended their long contracts in heating oil.
With the recent drop in equity prices, Exxon (XOM), Chesapeake (CHK), Schlumberger (SLB), and Chevron (CVX) are once again at attractive entry points if you missed the first move. Be prepared however, that these prices could move lower, so dollar cost average your purchases.
With energy prices moving lower, Wal-Mart (WMT) and Best Buy (BBY) are attracting attention. This morning WMT said September same-store sales rose 3.8% while total sales rose to $28.2 billion, up from $25.7 billion. Wal-Mart also said that October same-store sales would rise by 2% to 4% and, and reiterated its third-quarter earnings view of 55 to 59 cents share.
Best Buy (BBY) was given the thumbs up from Raymond James this morning. Raymond James raised BBY to Strong Buy from a Market Perform.
