Energy Stock Trading: Oil and Gas Stocks
Recent times have seen the oil and gas industries undergo a quiet revolution which has been reshaping the energy industry in the United States and also changed the way energy stocks are traded. ‘Shale gas’ (natural occurring gas trapped within dense sedimentary rock formations or shale formations) as many in the energy business call it has widely been seen as a game changer over the last few years and this has seen the transformation of the country’s energy supply. Referring to spot prices at Henry Hub, which is the benchmark supply point in Louisiana, gas prices have managed to reach a whole new level this year. Prices are estimated to have dipped to approximately 63%, surpassing the 2011 highest price of $4.92/MMBtu in June to a decade-low of $1.82/MMBtu in April 2012.
So far, the prices have managed to rally back to around $3.00/MMBtu in the recent past. As a result of the abundance of this source of energy in a country that was once face with a looming deficit, gas stocks have managed to go up. In fact, some companies in major US stock markets have managed to record up to 10% above their benchmark levels. In my opinion, this is a just a reflection of the full-bodied onshore output.
Basic Stock Trading Data
I assume you know what stocks are, else, go read this excellent article on the basics of stock trading from Investopedia.com. What I will concentrate on in this post, are the basic factors influencing stock prices, in other words, what makes a stock worth investing in at a given moment.
A good example of an overrated stock, is the newly released Facebook stock. The FB stock has tumbled down by nearly 30% since the IPO last month and one reason for this is, in my opinion, that Facebook don’t make enough profit. Another factor is the business plan, which haven’t got a waterproof evidence of catching on, selling demograpnically based ads is something else than selling keyword based ads like Google do.
The world is heading against an energy crisis!
The world, as we know it, is running on fossile energy, i.e. oil or coal, nuclear engergy or sustainable energy sources like wind or sun. The current dependency on fossile energy sources, will, eventually, change as ressources deminish and alternatives proves more profitable.
Usually we called companies like Exxon, Shell, Q8, etc. oil companies, today, the more accurate description would be energy companies, as the main earning channel is energy, derived from both oil, gas, wind, earth, and for some companies also uranium. My main thesis is that the world will always want energy, and as some resources become scarse, other fields are explored, and most often by the same companies who leads the current fossile energy based supplies.
Stock Trading Manager
Choosing between mutual fund investments (and paying fees), and trading your own stocks online via banks for pension savings or stock trading platforms, is a matter of investment profile, risk-taking, and time frame.
The information, advice, and suggestionst on this blog, are based on my experiences doing long term stock investments in energy (Shell), BioTech (Chr. Hansen), Pharma (Novo Nordisk), plus 20% undecided long term stocks and 20 % funds to invest in more adventurous projects.