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Hello Readers,
We have been wondering for the last several months just how high crude oil needs to go before it slops up the markets. Looks as if $65 does it. The major excuses we hear for these nose-bleed prices are that some refineries are offline, or that hurricanes have slowed production, or that there is unrest in Venezuela or Nigeria, blah, blah, blah. The oil industry has always faced these problems in the past; there is no excuse for a $25 increase over the last five or six months. Let’s wonder how low prices would drop if the President opens the Strategic Petroleum Reserve. Our guess is that crude would tank $15 to $25 for the simple reason that one-third of the current price is raw speculation probably caused by traders who have absolutely nothing to do with the cost of actual production.
Keep in mind that between now through September is traditionally a lousy period for the markets, so, hold on tight. Our Current Portfolio was looking healthy until a week ago, then a lot of our picks felt pressure from the market’s recent downdraft. And, we did not close any positions since the last issue.