Czechwealth (Czechwealth)
Czech markets  |  June 01, 2011 09:02:56

Destroy your wallet price of gasoline?

In recent weeks and months our purses continually shocks experienced during refueling of petrol or diesel at filling stations. Fuel price climbed well above and CZK 35 per liter.

The fault lies mainly expensive oil that significantly more expensive since the conflict in Libya, where they are the largest oil reserves in North Africa.

WTI Crude oil very quickly humbled the psychological limit of $ 100 per barrel to slowly and gradually increased and created a maximum of $ 114.83 in November 2008, there occurred correction mainly thanks to the strengthening of USD (when the ECB decided nezvednout interest rate and comment the governor was very moderate for further improvement), and concerns about economic growth. Advanced Western economies reduce their growth.

Comes cheaper?

Responded to all investors sell-off of oil from their portfolios and oil for one day weakened by more than 10%, just under $ 100. Here there was a re-indentation and the price jumped over $ 100 - see graph. Overall we can say that there is space for cheaper fuel at the pump, but cheaper is not as fast and as large as an ordinary consumer would expect.

The reasons that will prevent costly

And why? There are three reasons that will be costly to defend, the first drop of CZK against USD (oil is purchased in USD) and a second attendant stands that sell fuel with very low margins and very happy to use the market situation to improve their financialbalance. The third reason why so much fuel nezlevní is that by the end of the year the government decides to increase the state emergency reserves of oil and fuel from the current 90 days to 120 days. The proposal comes from the EU, it will feel in their wallets as well as motorists. Attendant would have to respond to the increase in inventories could rise by 20 to 30 cents per 1 liter. These three factors will hinder significantly cheaper fuel at petrol stations.

How to capitalize on the situation around the prices of PH?

And how can it make? We think that oil fundamentals have not changed, especially due to rising inflation, although USD recently corrected their losses, they are only short-term trend, gaining particular currency will be that better-interest such as the CZK, EUR, AUD and CAD.If you are an aggressive investor, there is an easy choice, purchase securities correlation related to each oil (futures contract on NYMEX Exchange, Exchange Traded Fund). The decline in the oil market, which occurred, was too aggressive and makes space for new business.

Recommendations author of the article: We opened our first small long position in USO ETF in our product at prices around 39 USD, which corresponds to approximately 97 USD per barrel. Now the markets can be volatile, so we still had enough free resources if oil prices dropped even more significantly, we increased the representation in its portfolio.

How to exchange shares of developed petroleum refining?

A course developed as shares of Unipetrol as petroleum refining? After disappointing results for 4Q share price has fallen dramatically, the company in recent days announced results for the 1Q the 2011th Although the company was in profit, but only because of financial operations, which overestimated the fuel inventory in stock, if they do, would end in the first quarter in a deep loss. Other business segment remained under pressure, even here the company reported a significantly worse numbers than the market expected. A vision for the coming quarters as our analysis is not exactly optimistic, although the season started motoring. Shares in our opinion not suitable to buy, we expect stagnation or decline in prices to CZK 160.

In recent weeks, interest rates fell on oil and uranium, in our opinion it is appropriate to include these commodities in the portfolio and so we did. The prices of these commodities have undergone significant correction and fundamentals are still bullish. We expect commodity prices in the medium to long term will tend to reinforce the correction. The possibility is also through investment securities related to.

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