** Speed Demon **SPEED DEMON
Below is a link to Matt Simmons’ website (Cut & Paste In Your Browser If Necessary). Click on Matthew R. Simmons/ Speeches & Papers/December 10th 2008 presentation.
My favorite vehicle right now is an exotic derivative fund (No physical backing) leveraged 2:1 to physical Oil - DXO. One of the risks is the financial stability of Deutsche Bank and without physical commodity backing, the fund is merely based upon ‘The Full Faith & Credit’ of Deutche Bank. Right now, that should be okay.
The Canadian Oil Sands projects have picqued my interest at least for the purpose of identifying a floor in the Oil price. From what I can determine, the lowest cash cost from producing projects is $35.00 per Oil barrel equivalent. Breach $35.00 per barrel Oil and there’s risk that the U.S. could lose as much as 1.8 Million barrels per day from the projects due to activity curtailment. So maybe that’s the floor that may or may not be reached.
Where’s the most opportune point for entry? That’s hard to determine, but perhaps nibbling incrementally upon weakness would a judicious stratgey. This is not a vehicle for tooling around the neighbood. Think of DXO as a Nitrous Oxide powered “Dragster” and we could be idling for the start of a new race upward. If you get the direction right, that’s what matters, but it could go backwards too.
This is for informational purposes only and not a recommendation.
https://www.simmonsco-intl.com