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AlphaProfit Newsletter
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Petroleum Refining and Oil Prices: Is it Time to Dig into Oil and Energy Stocks?
Sector Model Portfolios Repositioned
Weakness in the U. S. dollar and hopes of an improving global economy have thus far pumped up the price of oil. Oil has nearly doubled
in price over the past three months. While oil is taking its cue from the U. S. dollar on a day-to-day basis, the uptrend appears to be running
into resistance in recent trading sessions. News of unrest in nations like Iraq and Nigeria has failed to spike oil prices. The reality of slack
product demand is seeping into the oil pits. Product demand
Oil Price Forecast
In the near-term, gasoline demand in the U. S. should start to taper after the Fourth of July weekend. Beyond this seasonality, trends in disposable income will become a key factor driving gasoline demand. In distillates, diesel demand is likely to move in tandem with Gross Domestic Product while
heating oil demand will be driven by weather patterns particularly in the Northeast. The AlphaProfit Sector Newsletter's Core and Focus model portfolios are up 32.8% and 33.7%, respectively since March 9. The Core and Focus model portfolios were repositioned at yesterday's close. Subscribe to the Newsletter and receive the current recommendations. As an added bonus, you will receive domestic, foreign, and specialty mutual fund recommendations included in the NTF Growth portfolio. The NTF Growth portfolio is up even more than the Core and Focus model portfolios.
Looking outside the U. S., China and to a lesser extent Brazil and India are expected to contribute to global growth. Europe is mired in a deep recession and is widely expected to lag the U. S. in recovery. As such, the possibility of a synchronized global recovery that rapidly boosts oil demand appears remote. Led by a 4.9% decline in U. S. consumption, the International Energy Agency expects global oil demand to fall 2.9%. Take Profits in Alternative Energy
Hold-off on Refiners
About AlphaProfit Notes: The AlphaProfit Sector Investors' Newsletter™ and the AlphaProfit Fund Investors' Guide™ are for information purposes only. AlphaProfit Investments, LLC is not soliciting any subscriber to buy or sell any security. Nothing herein should be construed as an offer to buy or sell securities or to give individual advice on investing. Before buying or selling any mutual fund, exchange-traded fund, security, or investment, read the prospectus carefully. For securities held in brokerage accounts, read the broker's specific terms and conditions which apply to trading of the securities. AlphaProfit Investments, LLC cannot and does not give any assurance that the present or future model portfolio changes will be profitable. Past performance is not a guarantee for future results. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. AlphaProfit Investments, LLC is not responsible for any errors or omissions. AlphaProfit Investments, LLC neither is associated with nor receives any compensation from any of the investment companies, brokers or entities connected with the securities mentioned herein. Please review our Terms and Conditions of Use and Subscriber Agreement which is available on our website at www.alphaprofit.com; they govern your relationship with AlphaProfit Investments, LLC, including, but not by way of limitation, use of the Newsletter or the Guide. No part of the AlphaProfit Information may be reproduced or re-transmitted in any manner without written permission of AlphaProfit Investments, LLC.
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Gasoline demand in the U. S., is nearly 6% lower than it was a year ago. According to the U. S. Department of Energy, gasoline inventories recently tallied 205 million barrels, following their biggest weekly increase.
The fortunes of alternative energy stocks like First Solar (FSLR) and ETFs like PowerShares WilderHill Clean Energy (PBW) are tied as much to the price of oil as investors' risk appetite.
Alternative energy stocks are unlikely to fare well if oil loses price momentum and upside is capped in the near-term. Given the healthy run-up in alternative energy shares in recent months, it is worthwhile to consider paring bets here.
Slack distillate demand is causing refiners to curtail production when they should be building inventory ahead of the winter season. U. S. distillate inventories have climbed to 42 days of supply from nearly 28 days of supply a year-ago. The average price of diesel in the U. S. has fallen below that of gasoline for the first time since 2007.