While the broad U.S. stock market continues its sideways zombie walk near 18,000 in the Dow Jones Industrial Average — which has been the status quo for three years now — there is excitement developing in other areas. I’m talking about energy, which has seen prices oscillate all year in response on on-again, off-again rumors of a possible OPEC supply freeze deal.
Last month, the Saudis seemed to acquiesce to the Iranians to get a deal done (pledging to cut its own output to accommodate Tehran). But Iraq and the Russians are balking now, dimming hopes of a deal.
On Sunday, Iraqi oil minister Al-Luaibi said his country should be exempt from any OPEC production cuts because of its war with the Islamic State group. Tuesday morning, an unnamed Russian official was cited as saying his country wasn’t supportive of an output cut.
I recently recommended subscribers consider short exposure against crude oil with West Texas Intermediate looking vulnerable to a downside move here. Specifically, Edge Pro members added November puts against the United States Oil Fund LP (ETF) (NYSEARCA:USO).
Just days before a number of Big Oil stocks are set to report earnings, energy equities are looking toppy. Here are three blue-chip stocks at risk: