In April 2008 there were 3009 oil rigs in operation worldwide……….as of April 2009 this has plummeted to 2055 that is a fall of 32%! These are stats released from Baker Hughes Co. Every week BHI counts the number of drilling rigs actively exploring for or developing oil or natural gas in the US, Canada, and International markets. BHI has issued rotary rig counts as a service to the petroleum industry since 1944. This fall in rig count is one of the fundamental reasons why we are bullish on oil and oil service stocks. Of course it helps that the technical outlook is also favorable:
Gold and silver creep higher. Silver is only a whisker away from closing at a multi-week high and gold is now only 5% away from the elusive $1000 level. We believe that it is only a matter of days before both metals move into “virgin” territory:
What else makes us so confident that gold and silver will trade at multi-week highs over the coming days? It is the conclusive bearish behavior of the USD Index and US Treasuries. Both the USD Index and the US Long Bond ETF TLT are trading at multi-week highs. Experience tells us not to argue with the intentions of the market particularly when they are this strong across the board:
