Equity Feature : Good Oil Hunting

A chat with my broker friends has given me this idea to write about oil and oil stocks. I have been busy trading the oil story too, riding the Sembcorp Marine proxy before last Friday’s dip in oil prices finally despite the initial euphoria after the ECB’s massive liquidity injection announcement.

My futures broker friends say they have been getting calls from stockbrokers inquiring on behalf of clients on how to invest in oil futures and stockbrokers telling me that customers in Singapore have little choice in oil plays with really only 3 main stocks to consider – Keppel, Sembcorp Marine and Ezion (of all things ?).

The rest of the small to medium sized oil related companies are generally not good proxies as far as investors are concerned, being the favourites of the stock punting world.

Futures volumes in NYMEX Brent contracts surpasses 200k daily trading volume for the first time ever with 2015 averaging daily volumes of 152k vs 50k this time last year, according to CME Group. A clear sign indeed that speculators are getting involved.

Yet the month of January has only brought on bad news as the oil price collapse since June last year brings drillers to shutter their rigs and cut jobs across led by Baker Hughes (6,000) and Schlumberger (9,000) as BHP cut their shale rigs to reduce cost and keep dividends.

Examining oil price performance so far.

OIL RETURNSAnd the performance of Big Oil is hardly affected.

BIG OIL RETURNS

Singapore and Malaysia oil and gas companies mostly underperformed.

To continue reading ……

 

Links to last year’s articles :

https://tradehaven.net/market/the-oil-story-to-2020-and-beyond/

https://tradehaven.net/market/the-oil-story-continued-where-is-the-pain/