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Spread trading oil companies: Tullow and Premier oil offer value PDF Print E-mail
Written by Sam Coventry   
Thursday, 12 August 2010 09:46

But considering the state of the global markets should those looking to take long spread trading positions hold out?


Tullow Oil Plc and Premier Oil Plc shares are undervalued at current levels say the equity analyst team at Nomura, the Japanese investment banking giant.

Premier Oil has been set a target share price of 1790 by Nomura, that is 19.57% higher than at this morning's opening share price of 1497.

Tullow Oil has been set a target share price of 1541, that is 24.88% higher than this morning's opening at 1234.

While Noumra do favour long term positions on the oil producers investors and spread trading participants who favour long plays will be aware that global markets could be in for a bout of renewed selling pressure.

The markets currently favour those spread trading participants who like taking short positions as there has been a rapid decline in risk appetite over the past 3 days.

This morning saw a tentative attempt at gains on the FTSE 100 wiped out after Eurozone industrial production figures faltered.

Industrial production in the 16 countries that use the euro unexpectedly fell in June, official figures showed Thursday, raising fears that economic growth in the eurozone may not be as high as anticipated.

Eurostat, the EU's statistics office, said that industrial output fell 0.1 percent in June from the previous month. That sharply contrasts with the 1.1 percent gain recorded in May and disappoints market expectations for a 0.6 percent rise.

The main reason behind the monthly decline was 0.5 percent drop in Germany, the EU's economic powerhouse, and a sharp 1.6 percent decline in France, the eurozone's second-largest economy.

On an annual basis, Eurostat said the eurozone's industrial output was up 8.2 percent, down from May's 9.9 percent rate, and below market expectations for a more modest decline to 9.3 percent.

The figures are likely to dampen expectations of second quarter eurozone economic growth data due Friday. With consumption levels remaining subdued amid high unemployment and muted wage growth, overall growth is increasingly reliant on the industrial sector.
 

Risk Involved

Spread Betting and CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit. These trading products may not be suitable for all investors so seek independent advice if necessary.

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