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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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On the Short End of a Slippery Stick

There’s little in the energy space that I like right now; major indexes look fairly priced and energy stocks offer even less to get excited about.  US E+P has had it’s major run in 2013 and the two values I like – Anadarko (APC) and Noble (NBL) – have been quiet and need more patience.  Refiners are well priced considering the curve, except perhaps for Valero (VLO), which seems overextended.  Offshore drillers are off-cycle and I’m not ready to pick a bottom, yet. Natural gas at $4.40 looks steady.

But the continuing story surrounding Ukraine, which I thought would begin to quiet by now has instead unbelievably escalated. Oil prices are at risk for a major spike upwards.

Ukraine’s coup d’état was met, in my view, by a very restrained Russian reaction – securing their Black Sea port at Sevastopol and reclaiming a 90+% native population in Crimea.  My thoughts were at the time that Russia would then proceed to dislodge the minority, Western-leaning ‘government’ in Kiev by slowly using their strong influence in natural gas supply through the nation – a tactic they have used successfully in Eastern Europe twice in the recent past.  

Beyond what was, I suppose, a necessary token reaction of sanctions of half a dozen Kremlinites by President Obama, I expected the rest to be solved internally – and all the fears of further Russian military incursions would fade…

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