bigminty
10-07-2009, 06:45 PM
***CFTC regulations bearish for crude prices, junior explorers and producers
A proposed regulatory change could affect the junior oil exploration and productions stocks . Earlier this week the U.S. Commodities Futures Trading Commission (CFTC) revealed that is thinking about new regulations that limit positions sizes on commodities contracts. The agency says it wants to reduce "excessive speculation" in the commodity markets, especially the oil market. The agency will hold hearings in August.
After peaking at $73.90 in mid-June, front-month crude futures dipped below $60 earlier this week. I'd suggest the CFTC going after what it calls oil speculators may have something to do with this. It's also possible, of course, that renewed negativity about the economy is also the sort of thing that's going to lead to lower prices.
Whichever the case, keep your eyes on the crude price. If the oil price corrects further to $50 or lower, it's going to bad for junior oil stocks. The best strategy would be to set trailing stops in your oil stocks, sell the positions should those stops be triggered, and re-enter the positions later, after the oil price bottoms out.
........From 'diggers and drillers"(tipsheet):eek:
A proposed regulatory change could affect the junior oil exploration and productions stocks . Earlier this week the U.S. Commodities Futures Trading Commission (CFTC) revealed that is thinking about new regulations that limit positions sizes on commodities contracts. The agency says it wants to reduce "excessive speculation" in the commodity markets, especially the oil market. The agency will hold hearings in August.
After peaking at $73.90 in mid-June, front-month crude futures dipped below $60 earlier this week. I'd suggest the CFTC going after what it calls oil speculators may have something to do with this. It's also possible, of course, that renewed negativity about the economy is also the sort of thing that's going to lead to lower prices.
Whichever the case, keep your eyes on the crude price. If the oil price corrects further to $50 or lower, it's going to bad for junior oil stocks. The best strategy would be to set trailing stops in your oil stocks, sell the positions should those stops be triggered, and re-enter the positions later, after the oil price bottoms out.
........From 'diggers and drillers"(tipsheet):eek: