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Daily Roundup (6/10/2008) – Bakken bloodbath?
Posted by bakkenToday’s spiraling market and negative market sentiment put heavy pressure on the Bakken related stocks after solid runups during the last 2 months. Light, sweet crude for July delivery fell $3.04 to settle at $131.31 a barrel on the New York Mercantile Exchange. In addition, Fed Chair Bernanke put out some strong words about inflation which strengthen the dollar and added additional pressure on oil stocks.
For the better part of the day, major bakken players such as BEXP and CLR were showing 6% and 12% losses respectively, but were able to claw back in the last 2 hours of the trading session to pare their losses in half as shown in the chart below:
Is this the beginning a negative downtrend for Bakken stocks? Not necessarily, the volume was fairly light during the course of the day and picked up considerably during the last hour of trading where the stocks recovered. The sector was due for a pullback after its recent run and we should expect more capitulation over the next few weeks that may provide better entry points for long term holders. We still like the mid term outlook (2-6 months) and expect continued growth as long as oil stays above $115 a barrel. BSIC, BXP, NOG, KDKN, KOG are all small cap stocks and have the potential to outpace their larger counterparts as they are less susceptible to short term gyrations in the price of oil and more affected by their ability to grow their respective fifedoms.
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Tags: bakken bernanke BSIC BXP downturn KDKN KOG NOG oil sector
Dear Sirs, It seems to me that the Whiting Pete Corp New (WLL), GeoResources Inc. (GEOI) and MDU Resources Group Inc. (MDU) are noteworthy additions to the Bakken stocks’ list considered here. Thank You.
Thanks for the tickers, we will start following these as well
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