A Provident Pounding
January 4th, 2007 by Grant in: Economics, Investing, Stock ThoughtsToday shares of Provident Energy (PVX: chart, Y!) dropped $0.63 (5.9%) per share on falling crude prices. It still has a ways to fall to its previous short term low of $9.43 back in November, but today’s movement is due to different fundamental pressure than in the previous drop.
While November’s price movement was due to political tax posturing, movement over the last couple days is due to the value of the commodity itself.
Crude inventories were actually down by 1.3 million barrels last week, but the effect on the market was offset by an increase in refined products; gasoline supplies jumped by 5.6 million barrels which is still above average for this time of year.
Going forward with continuously warm weather forecasts perpetrating through much of the U.S. for the next few weeks, I’m starting to look outside my bread and butter energy sector for safe bets for 2007. Unfortunately, I think we’re in a time of significant economic change, which will make it tough to decipher where to park money for appreciable returns throughout the rest of the year.
My first instinct is to look at Gold, but even Gold futures were down over the last two sessions.
While I’m not ruling out buying up some precious metals, I think there is too much speculation on the direction of the economy to be buying right now.
Weak oil and a strong dollar are not terribly friendly to bouillon.
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January 11th, 2007 at 10:02 pm
Buy Buy Buy!
If you think oil is goin back UP that is! Don’t forget to take a little off the table tho JJC