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Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

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Is It Time To Get Back In?

This is getting frustrating. Oil stocks are acting like there’s a bull market in force, or soon to be in force – yet oil is still below $60 a barrel. I know that the market is over skating the puck here, trying to force in a trade that’s not ready yet, that still needs far more percolating before it’s really ripe. But I also know that there is a next oil boom on the tail end of this shale bust that I just cannot and will not be left out of. I’m ready to start to accumulate some choice energy stocks now, even if they are, for the moment, overvalued.

Look, you can’t help but notice some conflicting trends as you’re trying to time this next great trend trade. Projections from the Energy Information Administration (EIA) are still for a sharp rise in US oil production this year. Saudi Arabia is at full throttle production with the hopes of crushing US competition and securing long-term markets. Iran still looks on track to reenter the global marketplace as nuclear deal specifics get worked through. Libya’s 1 million barrels will reappear at some point. And US producers, while cutting capex and working rigs, are still turning what’s left up to 12 (one more than a Spinal Tap 11).

Financially, there’s been a huge influx in speculative positions in both WTI and Brent crude where the long to short ratio is above 6 to 1. That’s been associated with a massive move of money in the last two months into dedicated…

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