• 3 minutes UAE says four vessels subjected to 'sabotage' near Fujairah port
  • 6 minutes Why is Strait of Hormuz the World's Most Important Oil Artery
  • 8 minutes OPEC is no longer an Apex Predator
  • 12 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 4 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 31 mins Australia Election Summary: "This was the Climate Change Cult Election, and the Climate Change Cult Lost"
  • 1 hour Australian Voters Reject 'Climate Change' Politicians
  • 8 mins Shale to be profitable in 2019!!!
  • 9 hours California Threatens Ban on ICE Cars
  • 9 hours China Downplays Chances For Trade Talks While U.S. Plays ‘Little Tricks’
  • 9 hours IMO2020 To scrub or not to scrub
  • 7 days How can Trump 'own' a trade war?
  • 12 hours Global Warming Making The Rich Richer
  • 9 hours Did Saudi Arabia pull a "Jussie Smollett" and fake an attack on themselves to justify indiscriminate bombing on Yemen city population ?
  • 35 mins Misunderstanding between USA and Iran the cause of current stand off, I call BS
  • 39 mins DUG Rockies: Plenty Of Promise, Despite The Politics
  • 9 hours "We cannot be relying on fossil fuels to burn as an energy source at all in our country" - Canadian NDP Political Leader
  • 4 hours Some Good News on Climate Change Maybe

This Oil Major Comes At A Discount

Pipeline

Regular readers will know that I can be a little contrarian at times. That is not necessarily the result of being curmudgeonly, although if you ask my kids I’m sure they would say that I am a grumpy old man. No, it is rather because my experience has taught me a couple of things about how the market reacts to what Donald Rumsfeld once called “known unknowns”, things that the market knows will happen but is unsure of what the effects will be. As those things approach, the crowd-sourcing nature of markets ensure that conventional wisdom is priced in, and the power of momentum means that the move is often overdone. That can sometimes set up a trade with a controlled or minimal downside and, on the off chance that conventional wisdom is wrong, significant upside potential.

There is just such an opportunity right now in several oil stocks, and my choice for trading the situation would be the French oil company Total S.A. (TOT), whose one-year chart is above.

The known unknown here is the market’s concerns about the effects of the U.S. sanctions on Iranian oil that were announced after President Trump pulled out of the nuclear deal between that country and the international coalition of signatories. We know that Iran is a significant oil producer and that the proposal to not just prevent U.S. companies from doing business there but also punish foreign companies that do presents a potential issue for a company like Total.

To be sure,…




Oilprice - The No. 1 Source for Oil & Energy News