The OPEC decision not to cut oil production is a watershed event that will change the energy industry for years to come. OPEC Secretary General, Abdalla El Badri stated: “We will produce 30 million barrels a day for the next 6 months and we will watch to see how the market behaves.” Energy Minister, Suhail Al Mazrovei said: “Newcomers to the market who have the highest costs and created the glut should be the ones to determine prices.”
Make no mistake. This is a high stakes poker game between OPEC and the United States with OPEC’s goal to destroy the US Shale Oil Production. OPEC has thrown down the gauntlet and has gone “All In.”
Reaction to OPEC’s decision has been swift and direct. Mike Wittner, Oil Research Specialist at Societe General said: “We are entering a new era for oil prices where the market itself will manage supply, no longer Saudia Arabia and OPEC.” “It’s huge. This is a signal that they’re throwing in the towel. The markets have changed for many years to come.”
Russian oil tycoon, Leonid Fedun stated that the OPEC decision will “ensure a crash in the US Shale Industry.”
What does this mean for investors? This an URGENT plea for you to check your energy portfolio, especially any shale oil investments you may have. That includes oil drillers, equipment manufacturers, pipeline companies and railroads that carry shale oil. This battle between OPEC and the US is the real thing. DO NOT believe any media or analysts’ statements that this will blow over and it will be business as usual.
PROTECT YOUR PORTFOLIO-HERE’S HOW
There are two ways to do this. The best way is to review each and every stock or investment you have in the energy sector. Pay particular attention to any shale companies in your portfolio. Chances they will be hit the hardest. The notion of staying in for the long term may not be the best approach, hoping for prices to rebound next year. There is an old traders adage that says: “Your first loss is your best loss.” Usually losses just collapse against you. There is another old trading adage that says: “When in doubt don’t.” If you are not sure what to do you may just want to sell your energy stocks and stand aside for a while.
A second approach is to buy “Inverse Energy ETFs. Here is a list for you to review:
• ERY – Daily Energy Bear 3x Shares
• KOLD – ProShares UltraShort Bloomberg Natural Gas
• DDG – ProShares Short Oil & Gas
• SCO – ProShares UltraShort Bloomberg Crude Oil
• DUG – ProShares UltraShort Oil & Gas
• REC – Rydex Inverse 2x S P Select Sector Energy …
• GASX – Daily Natural Gas Related Bear 3x Shares
• FCGS – Daily Natural Gas Related Bear 2x Shares
Don’t be lulled into believing that this will solve all your problems.
You must study each ETF to identify exactly what companies the ETF tracks and how it trades. You may be holding oil shale stocks while the ETF you are trading does not have these stocks in its portfolio.
Again, ACT NOW!