Energy Names – Best Buy-Side Opportunities

Posted on | by Leon Hinde | Leave a Comment on Energy Names – Best Buy-Side Opportunities

Within the ASX 50,  OSH, STO, WPL, ORG & BHP are the names investors consider when looking for exposure to Oil and LNG.

Currently WPL, ORG and BHP remain in our ASX50 model following a series of structural “higher low” formations.

OSH is not currently in our model portfolio.

The negative we see in the stock relates to market concerns surrounding their stretched balance sheet.

Oil Search has committed to substantial projects in PNG and Alaska and should oil prices fail to hold $60 – $80 per barrel, Oil Search may need to raise capital.

This week, Oil Search reported solid 4Q17 production at the upper end of their guidance range, with revenue of US$389mn.

Our preference remains adding long exposure on any pullback in BHP, WPL & ORG.

We are also watching for the next Algo Engine buy signal in the oil ETF OOO.AXW.

 

 

The Crude Oil Rally Is Looking Stretched

Posted on | by Todd | Leave a Comment on The Crude Oil Rally Is Looking Stretched

Since December 1st, the price of WTI Crude Oil has rallied over 14%.

Just in the last 5 days the WTI price has risen 5% from $60.25 to a 3.5 year high today of $63.50.

Recent reductions in crude inventories combined with Geo-political tensions in the Middle-East have support prices.

However, there have been many analyst sceptical that this will be a protracted rally in Crude prices.

This scepticism can be seen in the price action of some of the local oil-based names.

Despite the 5% rise in WTI over the last week, shares of OSH have dropped by 2.5% to $7.90, and the share price of WPL and STO have been consolidating off their recent highs and look to be pointing lower.

We urge caution on the sustainability of the recent run up in Crude prices and would suggest exiting long exposure to WPL, STO and OSH

Woodside

Santos

Oil Search

 

Buy WPL Into The OPEC Meeting

Posted on | by Todd | Leave a Comment on Buy WPL Into The OPEC Meeting

The price of West Texas Intermediate (WTI) Crude Oil hit a 2-year high of $58.40 in NY trade yesterday. For the month of November, the price of WTI has rallied over 10%.

Much of the bullish trade has been driven by comments from OPEC members that the cartel will be able to extend their oil supply curbs put in place earlier this year.

Currently, OPEC, Russia and nine other producers have reduced oil output by 1.8 million barrels per day. Crude Oil prices have firmed on the expectations that they will extend that agreement beyond March 2018 when they meet in Vienna next week.

If they are successful in extending the deal, it would give Crude Oil prices an additional lift towards the $60.00 area.

Shares of WPL traded to $33.35 on November 7th.

News of Shell Oil divesting from the company triggered a sharp $3.00 drop to $30.35.

With the current share price at $31.55, it’s reasonable to expect WPL shares to trade back above the $33.00 handle if WTI trades back to $60.00.

Woodside Petroleum

 

Woodside Petroleum – Buy the Dip

Posted on | by Leon Hinde | Leave a Comment on Woodside Petroleum – Buy the Dip

Woodside Petroleum has now sold off $2.00 since making a high of $33.37 on the 7th of November.

After having a recent profitable trade in WPL, we again look to the buy side on  further price retracement and view $30 – $30.75 as a low risk entry level.

Shell has announced the sale of 71 million shares or 8.5% of WPL’s register.  Shell’s ownership will be reduced to 4.8%. The consideration will be approximately A$2.2billion.

Woodside

 

ALGO Trade Update: Sharp Reversal In Crude Oil

Posted on | by Todd | Leave a Comment on ALGO Trade Update: Sharp Reversal In Crude Oil

The recent rally in Crude Oil reversed overnight as November futures fell close to 3% after OPEC output rose by 120,000 barrels per day during the month of September.

US drilling firms also added rigs for the first time since August, which suggests more supply coming online into the end of the year.

As a result, shares of local oil producers STO, OSH and WPL are all priced lower in early trade.

Our ALGO engine triggered a sell signal in OSH on September 28th at $7.10. If Crude Oil extends its correction lower, we would look for the next key support level near the September 9th low at $6.50.

A sell signal for STO was generated on September 26th at $4.20, which is developing slowly with a downside target near the August 18th low of $3.35.

We didn’t get a sell signal in WPL, however, we would expect a break of the $29.00 level would extend down to the $28.30 level in the near-term.

 

Oil Search

Santos

Woodside Petroleumosh

 

 

 

WPL And ORG Are Looking Good, Technically

Posted on | by Todd | Leave a Comment on WPL And ORG Are Looking Good, Technically

Over the last several months, there have been many questions asked about the likely direction of energy-related stocks.

The fundamentals in the Crude Oil market are difficult to forecast and the political climate, domestically, may impact the future revenue of electricity markets.

However, from a technical perspective, both ORG and WPL look like they may be setting up for a move higher.

We currently see reasonable upside targets at $30.75 in WPL and $8.00 in ORG.

Woodside Petroleum

Origin Energy