Calling a bottom in oil is a fool’s errand. What’s more important here is in trying to gauge how oil will trade AFTER it finds a bottom. And that isn’t looking very constructive, as I’ve pointed out in several columns and on-air.
So, is there anything to trade here in the oil patch? Is there anywhere we can go, even in the short term, to try and make some money from a very volatile group? I’ve outlined some long-term plays I think make sense, in refining and some well-run E+P’s, but those plays won’t yield fruit for months.
I’ve also kept you away from offshore plays and oil services, as these are the last in an off-cycle of oil prices to recover when prices do make a comeback. But, between these two, there’s an idea for a few quick trade ideas for the daytrading gambler out there.
Take Halcon Resources (HK), Sandridge Energy (SD) or Midstates Petroleum (MPO). All of these companies are going to need new financing or out right buyers if they are to survive in a sub-$60 crude environment. So, if you’re looking at these single digit shares, you realize that the value that is left in them is either in the (impossible) chance for a full-scale buyout, or the option on a big oil rally before their operating cash runs out.
We’ve found our cheap crude calls.
On the other side is an oil services company like Schlumberger (SLB), who has yet to feel the lasting pain of oil prices that are…