On Recovery Track ...
The steep sliding price of crude oil is technically over and market has gone into consolidation for the past 2 months, whereby the WTI crude oil price was fluctuating between $57 and $61.
Based on the plotted chart, crude oil price has steadied itself at $59.6+/-$1.10, if compared to wild swing in Nov-Dec 14 time frame of $69.8+/-$9.3.
Continuous flat/uptrend of average price and low price fluctuation is a strong signal that market has re-balanced by itself in terms of supply and demand, setting a strong foundation for price recovery in normal circumstances.
Second half of 2015 would be interesting ...
Opportunities...
As shared by the author earlier oil related ETN/ETF has good exposure to capture the gain of crude oil price, however come with greater risk of price decaying in huge price fluctuation market. As the price fluctuation is now ~$1.1 for the past two months as shown in chart above, the author thinks the risk is manageable.
Big oil companies financial report would be ugly for the next two quarters due to drop in revenue as a result from lower oil price. Workforce reduction, increasing of M&A activities, capital expenses reduction are expected to reduce overall company fix cost. The author would pick BP as it still offer ~6% dividend yield. =D
Foreign investors often picking on the dependency of Malaysia to crude oil export for revenue generation, even though is actually only around 20%. Hopefully this will ease the depreciation of ringgit and dipping of KLCI.
Happy Investing ...
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