Oil Just Posted Its Worst Monthly/Quarterly Loss Ever!

Over the last month, we have seen the price of Crude oil benchmarks in the U.S. and Brent futures get destroyed. Both benchmarks lost right around two-thirds of their value during the first quarter and roughly 55% of their value during March alone.

The massive price destruction occurred because of many reasons. The first and foremost is the Coronavirus pandemic and how the world is fighting the spread of the virus. Shutting borders to foreign nationals, implementing 'Stay at home Orders,' and recommending 'social distancing' is all leading to a massive reduction in the demand for oil on a worldwide scale. Cruise ships aren't leaving ports, airlines have slashed their number of flights, both public busses and school busses are not operating, and the average person isn't driving their vehicles. We have already begun to see reports from around the world how pollution levels are declining due to these modes of transportation, essentially stopping.

The second reason the price of oil crumbled was because of the "price war' that is currently ragging between Russia and Saudi Arabia. The two countries were the main reasons the Organization of the Petroleum Exporting Countries (OPEC) couldn't agree on production cuts following the softening demand after the Coronavirus began spreading on a massive scale. Russia and OPEC's de facto leader, Saudi Arabia, disagreed on how much each country would reduce production in order to help stabilize the price of oil around the world.

The price war has caused the Saudi's to increase production from 9.7 million barrels a day in February to a targeted more than 12 million barrels a day in April. Thus far, they have held up their threats. As of early April, the first wave of crude was already heading toward Europe, and the U.S. Saudi Arabia hired extra supertankers in March. Those ships are positioned near oil terminals preparing to be filled. Continue reading "Oil Just Posted Its Worst Monthly/Quarterly Loss Ever!"

Trump Tweets Create Opportunity for Investors

Matt Thalman - INO.com Contributor - ETFs


When Donald Trump goes to Twitter Inc. (TWTR) to voice his negative opinions, investors should begin trying to find opportunities. Over just the past few weeks we have seen two separate occasions in particular in which the President of the United States has directed negative tweets at specific industries or companies. In both cases, first with Amazon.com Inc. (AMZN) and more recently with The Organization of Petroleum Exporting Countries (OPEC), his tweets have sent asset prices lower for a short period, before they have recovered, opening up big opportunities for investors.

Amazon

The end of March, beginning of April, Donald Trump assaulted Amazon with some tweets. First, it was that the company paid little to no state and local government taxes and then it was that the e-commerce company was a ‘scam’ which costs the US Post Office and therefore the American people, billions of dollars a year. Another string of tweets pointed the finger at Amazon claiming it was the reason thousands of retailers were going out of business, and millions of US workers had been laid off.

The tweets from Trump sent Amazon shares lower each day he would reignite his attack on the e-commerce giant. A 1-month chart of Amazon shows how the stock fell during the Presidents attacks and has since recovered.

Trump Tweets
From Yahoo Finance

Despite the fact that the President attacked Amazon and no real solution has come from the issues he pointed out, Amazon’s recovery appears to be nearly complete. This is not to say that the problems with Amazon not paying taxes or its contract with the Post Office couldn’t be reignited again in the future. But as most analysts have noted, the Presidents threats and claims against Amazon have no real teeth. Continue reading "Trump Tweets Create Opportunity for Investors"