Oil Field Bet!

Last month when I purchased DBA, I was looking for someplace liquid to park assets while participating in any upside inflation.  Unfortunately, I have been underestimating ETF futures roll expenses for DBA, JJG, and DBC.  Thus, I was willing to exit my DBA position today (at a manageable $50 loss) to fund a new position.

 The new position is a field bet on oil producers and servicers.  Oil markets seem to have a structural tightness to them that are unlikely to ease in the near future.  Furthermore, energy serves as a real asset by correlating to inflation.  Today I purchased producers XOM & CVX and servicers SLB, BHI, & HAL, all of which have at least a four star rating from both S&P and Morningstar.  To hedge my equity correlation exposure, I took a negative equity position by shorting SSO (this trade accumulates to my existing SSO short position).

XOM long 20 78  $   (1,567.00)
CVX long 10 99.53  $   (1,002.30)
SLB long 15 71.54  $   (1,080.10)
BHI long 20 54.39  $   (1,094.80)
HAL long 30 36.259  $   (1,094.77)

>>>

SSO short 100 43.8  $    4,369.97

>>>

10/3/2011 DBA long 100 29.7  $   (2,977.00)
11/18/2011 DBA sold 100 29.335  $    2,926.44
           $       (50.56)

>>>

Top Five is updated to reflect for the changes in SSO and DBA.

About these ads