Oil closed last week around $40 a barrel, way below $140+ prices being paid mid last year. In my opinion there is no way that oil can stay at these prices for much longer. Its my understanding from watching CNBC that oil cant even be produced at these prices. This tells me one thing. We have had a huge reduction in demand due to the slow down in the U.S and World Markets. All this time the oil rigs keep on drilling and the refiners running as usual. (slow and unproductive but still as usual)
Until the supply starts to dry up some, prices will stay low. I would be expecting this to happen some time soon here in the U.S as the weather starts to get better along with Oboma’s Stimulus package kicking in.
I’ve been looking long and hard at Petrobras Energ�a Participaciones S.A “PZE” as my stock to watch for a sign as to when its time to buy into this Industry.
PZE has traded in a range of $5-$7 for more than 9 weeks now on steadily declining volume. I’m expecting this stock to move higher next week on what should be very heavy volume. A few February $7.50 calls aren’t looking to bad at this point along with a few more calls for March.
PZE closed the week at $7.23 up .43 from last weeks close.
