Crude Oil Hanging By a Thread

As we noted earlier today when we wrote we would have a clue as to a move in crude oil prices when the EIA inventory report was released–and boy did the markets get a surprise with a build of over 7 million barrels in inventory–twice the expected rise.  Crude prices ended up with large losses for the day.

While the E&P MLP’s didn’t get massacred like last week, they did take a 1-2% overall hit with some getting socked for 4-5% losses.  Vanguard Natural Resources, Linnco and Linn Energy were casualties for the day.

Crude oil futures are hanging by a thread tonight–less than 50 cents above the important $80/barrel support level on West Texas.  It will be interesting to see how trading shakes out tomorrow.  We would think if the prices ‘drift’ lower MLP’s will hold up, but if the longs panic to get out at some point during the day we could see losses equaling last weeks fall.

We have Mid-Con Energy (ticker:MCEP), Memorial Production Partners (ticker:MEMP), Linn Energy (ticker:LINE) and Linnco LLC (LNCO) on the radar screen as possible buys IF we get a panic sell off in the days ahead.  We ARE NOT anxious to buy at current levels–just at lower panic selling prices.

Additionally we note that 9 new people have been quarantined in Connecticut for potential ebola–we hope this turns out to be a false alarm.