Weekly Update: April 1, 2015

| April 1, 2015

Weekly Update: April 1, 2015


Big Picture Outlook:

Some very interesting news from the oil patch this morning…

The EIA’s weekly inventory report revealed a 4.8 million barrel build.  While it’s still a steep increase in inventories, it’s the lowest build in the past month. 

This information, mixed with the fact refineries are starting to come out of maintenance season, may provide support for the price of WTI in coming weeks.

In fact, the commodity is already surging higher by $2.76 a barrel (May contract) as I write.

But that’s not the only news…

There’s also a rumor floating around that US negotiations with Iran are hitting a brick wall.  As you may know, the two countries have been in tense negotiations over Iran’s controversial nuclear program.

If they can’t reach a deal in coming days, it could spur more buying in WTI.

And remember…

The high demand summer driving season is right around the corner!

Let’s get to this week’s updates…


Portfolio Highlights:

Editor’s Note: I won’t update every open position every update.  I focus on the positions with significant news or price movement.

. . . . EOG Resources (EOG) April 17, 2015 $95 calls

EOG spiked to multi-week highs at $93.35 in early morning trading today.  While the bullish price action is welcome, we’ll need EOG to rally above the technical downtrend line at $94 to really bring the bulls into this name.

Our $95 calls are trading at a $0.72 bid as I write.  In order for us to break-even on this trade, we’ll need EOG to rally to $96.17 ($95 strike + $1.17 premium paid) by expiration.

Our profit targets are at $95 and $97.

. . . . Oasis Petroleum (OAS) May 15, 2015 $15 calls

OAS is continuing its recovery from an abrupt selloff on March 23rd.  As I write, the oil and gas explorer is flirting with the $15 area, which also happens to be our strike price.

Remember, we still have over a month until expiration so let’s be patient with this trade.

Our profit targets are at $18 and $22, while our risk control line is at $11.50.

. . . . Freeport McMoran (FCX) May 15, 2015 $19 calls

Bulls pushed FCX to $20 in early trade on March 26th.  The rally sent our $19 calls to $1.70 a contract- a 50% gain from our entry at $1.13.  But since then, FCX has weakened to the $19 area.

We’ll need a strong push over $20 to break FCX from the bearish chains that are holding it down.

Our profit targets are at $22.00 and $23.50, while our risk control line is at $15.90.

. . . . Oneok Inc. (OKE) July 17, 2015 $50 calls

OKE started off the day with a bang, rallying over $49 in early trade.  However, the natural gas pipeline and storage provider is slowly giving up those gains as I write.

We’ll need a solid break above $49 on heavy volume for bulls to really come rushing into this name.

Let’s be patient.  Our profit targets are at $52 and $56, while our risk control line is at $45.90.


Category: Commodity Trading