MRO US Oil LongThe US Energy Department has announced open bids for oil contracts to replenish the
national strategic reserve which was depleted during the prior run up on global oil prices.
This is a sure sign that the feds think that spot oil has but in a bottom especially in the context
of shipping disruptions and higher insurance costs due to terrorism /piracy in the area of the
Red Sea and Suez Canal. In the meanwhile two South American countries are having sovereignty
disputes over oil fields and the British Navy is offshore to buttress the interests of Guyana.
MRO is a domestic oil producer that is independent of Middle East issues. Its oil is consumed
mostly in the US with a little shipping to Asia only. On the 50 minute chart, price downtrended
from January 3th through and then below the high volume area of the volume profile.
Price has reversed back up and reapproached the evolving high volume area. The dual TF
MACD ( by Chris Moody) shows moving average divergence. Chris Moody's dual TF RSI indicator
shows the faster TF RSI rising over the slower TF RSI as a sign of bullish momentum.
I have taken both a stock and call options position in MRO having zoomed into the 15 minute
TF for a good entry. Given the level of challenges current geopolitics presents to
smooth flowing and inexpensive shipping of crude oil, I am expectant of significant gains
in these positions. I have also looked into a position in OXY and CVE, which is a Canadian
crude producer.
