The headlines announce lower gasoline prices at the pump. This is true but it is a result of crude prices falling from the $82 level July 8. Crude prices bottomed four days ago around $72. Friday, West Texas Intermediate was trading for $76.14. This continues the pattern this year with prices trading in this range.
Gasoline futures have traded in a similar pattern. The high has been around $2.60 and the low $2.20 back in January. Recent lows have been about $2.28. The better idea is to expect gasoline prices to climb higher from this point.
As Jim Rogers used to say, if you want to bet on oil, buy oil. The idea is that one owns the actual commodity rather than a producer. ExxonMobil (XOM) has been in a nice uptrend since mid-June. It moved from $108 to $118. USO, the ETF for literal crude oil just made a higher low at $72 three days ago. It is now $75.87 and momentum is trending to the upside. This seems a good energy play.
After hitting a new high at $2,520 a week ago, gold has found support at $2,420. It had a strong day Thursday up $30. Silver jumped 66 cents Thursday also finding a bottom at $26.50. Available ETFs for gold include Sprott Gold Trust PHYS at $18.86.
Sprott Silver Trust PSLV trades at $9.34. With a world awash in debt and the U.S. spending one trillion dollars it does not have every 100 days, the long term outlook for gold and silver is bullish. Both Sprott ETFs allow one to buy the metals at a discount to the actual value, each off about 2%.
The stock market took a dive Monday with the DJIA down over one thousand points. It has recovered to last Friday’s trade around 39,443. This also filled the gap left from the Monday plunge. August tends to be an up month. The Magnificent Seven tech stocks all made lows Monday. All are now rebounding. Momentum indicators have not turned up yet, but the oversold condition is enough I think to buoy the market into month end.
The presidential campaign should be of concern to the Permian Basin. Kamala Harris has advocated against offshore drilling and fracking. Each strategy has made the U.S. energy independent until Biden/Harris began their war on fossil fuels. There are no policy specifics on the Democrat campaign web page. Rumors are that she has reversed her position. That is likely a campaign strategy. Her VP pick is worse. His high taxes and regulations have resulted in an out migration from Minnesota. Vote for the Basin economy.
