Daily Gains Letter comments on current global oil prices and benefits of airline stocks.
New York, NY, United States - November 25, 2014 /MarketersMedia/ —
Daily Gains Letter (www.DailyGainsLetter.com), an e-letter published by Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is weighing in on the current state of global oil prices and saying that weak oil prices are a boon to airline stocks.
“Oil prices have been heading lower since early June, down approximately 30% from $107.00 to the $75.00 level, and could be threatening to take a run towards $70.00,” says financial analyst George Leong. “Even the thicker Brent Crude oil prices are not that much higher, and that’s worrisome if you are an oil producer.”
Leong explains that some analysts see oil prices falling to $60.00 per barrel if OPEC does not agree to cut output by at least one million barrels per day. Oil prices have been falling since June due to increased supply from U.S. shale oil and weak growth trajectories in Europe and Asia.
Domestically, fracking in North Dakota and Montana has resulted in an abundant supply of oil. In addition, the Republican-led Congress is confident the Keystone XL bill will pass early in 2015 after the GOP takes control in January. Passing of the Keystone XL bill will transport roughly 830,000 barrels of oil per day from Canada’s tar sands to refineries in the Midwest and Gulf Coast. Leong notes that unless there is a major disruption to the production side in the Middle East, oil prices could be heading lower.
“The decline in oil prices has helped boost businesses that count energy as a major cost, such as transportation companies, including trucking and airlines. And the Dow Jones Transportation Average has been edging higher, up almost 20% since mid-October,” he adds. “More specifically, the Dow Jones U.S. Airlines Index has been in a beautiful uptrend over the last two years, up 250% since November 2012.”
“On the consumer side, drivers are seeing much cheaper gasoline at the pumps, which will add to the money available for spending and allow consumers to travel more for shopping excursions,” Leong concludes. “Airlines and related companies are one group of stocks that will surely benefit from the lower oil prices.”
For more information on Daily Gains Letter, visit www.DailyGainsLetter.com.
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com.
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