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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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Hold Off On Energy Stocks Until After The Elections

We’re seeing oil stock prices come down along with oil prices themselves, to targets that we had established long ago as worthwhile spots at which to get back in. But something is making this drop in prices a bit more suspicious than some others. The answer is obvious: The upcoming U.S. Presidential election is still causing a wildcard in our investing plans. And for right now, I’m wary of its outcome and the implications for our oil stocks.

Everything seems to be on target: We had a great ride in oil stocks from earlier this year until about a month and a half ago, when I implied that oil stock prices had run ahead of where the commodity was likely to go. We jettisoned many of these stocks and waited for another opportunity to get back in at better value prices. And so, here we are: Especially with the more oil-responsive E+P’s, we’ve seen some very tasty prices to look again at renewing exposure to oil stocks. Companies like Continental Resources (CLR) are back near $45, after spending the summer nearly $10 higher. Hess (HES) with similar exposure into the Bakken is well under $50, and near the $47 target I named earlier as a good spot to get in. Less responsive Permian players like Cimarex (XEC), Parsley Energy (PE) and Concho Resources (CXO) are dropping, but not quite as fast, as the heat in the Permian remains strong.

I am also predicting a substantive agreement in Vienna from OPEC late in November, which would also deliver a quick…

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