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Something important is brewing in the oil patch. Yesterday the EIA released its inventory numbers and gasoline and heating oil had unexpected builds, while crude stocks drew significantly more than what had been anticipated.
Humm, what's going on? Now that the elections are over is the Strategic Petroleum Reserves once again adding to their stockpiles?
Despite what we are being told about warm weather, someone continues to draw down crude. Who is doing this? On Wednesday, the Department of Energy said they had not received any requests from Gulf Coast refiners despite the problems occurring along the Houston Shipping Channel. Well, someone is obviously buying!
For those of you who are underweight energy, you might want to look at Conoco-Phillips (COP) and Valero (VLO). Both stocks look awfully cheap, and Barron's recently pumped Conoco-Phillips saying it was "The World's Cheapest Big Stock."
Ideally, I think COP would be a good buy under $70, and a great buyer under $65. If the stock gets under $70, I will be adding it to my own account. If not, I will sell the 70 put options until the stock comes down.
Getting back to the "mysterious buyers" of oil, something sells fishy. Am I implying that some monkey business is going on? Well, yes. Isn't there always some monkey business going on? When a huge surplus of crude gets unwound in a matter of weeks, I don't look at this as being normal.
Talk about not being normal, I can't believe that our US administration is thinking about sending more troops to Iraq. How stupid is this? If Iraq was directly responsible for 911 then I would be all for turning Baghdad into a sandbox. It is real clear to me that Iraq is about oil and nothing more. If we were going to attack and bomb a country that was responsible for 911, then we need to be relentlessly bombing Saudi Arabia. According to the FBI, all of the 19 suspected hijackers were from Saudi Arabia, United Arab Emirates, Lebanon or Egypt.
Talk about not being normal, what about Casey Wian reporting on Lou Dobbs Tonight saying the “New World Order” agenda will , “open borders, commerce of all costs, and, by the way, without the approval of either American voters or the U.S. Congress.” In addition, to all of the above, another agenda of the North American Union is to have a single currency shared by all three countries in North America known as the “Amero.”
Talk about not being normal, what about when Jeff Saut at Raymond James said; "As for the “here and now,” we have deemed the recent performance by the major market indices to be somewhat “unnatural.” Markets typically go up, correct by 25%, and then re-rally if they are going to trade higher. This, ladies and gentlemen, has not been the case recently as the averages have “unnaturally” vaulted higher without so much as ANY correction."
In short, I do not believe we live in normal times.
