Crude Oil

Back in the winter of 2016 crude oil touched a cyclical bottom trading all the way down to $26 a barrel.  Back then oil was left for dead as electric and hybrid vehicles were going to send gasoline powered cars on the same path to extinction as the dodo bird.  That was then.  As Charlie Bilello points out on his twitter feed, "Crude oil is at hits highest level in 40 months and is up 144% from its closing low in February 2016."   

Now you can make of that what you want.  My guess {and it is truly a guess as I am not an oil analyst} is that supply issues in places like Venezuela, international jitters in various places and a rebounding global economy have all played a part in this.  But you don't hear anybody really talking about the rise in crude.  Also what you don't hear anybody talking about is the fact that energy ETFs like the SPDR Select Energy Fund {XLE} aren't up anywhere near that amount.  

Now there may be reasons for that other than the rise in crude prices.  Maybe investors just feel that buying energy is too much of a gamble given the worlds' obsession with renewables and electric vehicles.  Also many investors have been burned time and again over the past few years when trying to buy into the space.  But if oil stays at these levels or moves higher then the energy space may be an area to watch, if for no other reason than as a barometer of global economic health.  Now please understand  I'm  not making a recommendation or saying one should necessarily invest in the space or even buy at these levels.  There are many things as I indicated above that can move oil prices and it can be volatile. Buying oil, energy related stocks or ETFs means that you are at the whim of crude's gyrations.  If the trend changes there is a higher probability you will lose money for some period of time.  What I am saying to put this on your radar and give it a quick glance every once in a while if you check stock prices.  At the very least it will give you some idea of what you're going to be paying at the pump when you fill up your car.  

Back early next week.  Also a final note.  Charlie Bilello has one of the more interesting twitter feeds out there in the investment sphere.  I read him every day.  You can find him here.

*Long XLE and certain other energy related ETFs in client and personal accounts although positions may change at any time.  We could also be buyers of energy related ETFs anytime after this post.  Please note we post our own personal observations about many different things related to investments on this website.  From time to time we may discuss specific stocks or sectors in the context of something either in a particular name or in a specific space that catches our eye.  We do not give personal investment advice on this blog nor do we recommend any specific securities.  Therefore, nothing in this post or on this website should be construed as a recommendation to buy or sell any particular security.  Before you act on anything you read here or anyplace on the web you should consult your investment advisor if you are not one of our clients, do your own homework if you invest for yourself or talk to us!  We'll be glad to discuss our investment style and discipline, how it might relate to your portfolio and how it might fit into your particular risk/return criteria.