“Petroleum Pendulum Profit Window” Taipan Crisis Trader

By Travis Johnson, Stock Gumshoe, October 6, 2008

The fact that the financial world is coming apart at the seams doesn’t seem to be slowing down the newsletters — I don’t know whether their advice is going to help you keep your portfolio intact while all about you are losing theirs, but they certainly think that the US investors is desperate for advice these days. And they’re excited to sell it to you …

Today I wanted to take another look at a stock that I sleuthed out a few weeks ago, from an ad for Christian DeHaemer’s Crisis Trader.

If you happened to miss that (don’t worry, I love you anyway), it was an ad that teased us about a dictator’s death being a potential windfall in his gas-rich country as it opens to outside companies.

The country was Turkemenistan, and the company was (and is) Dragon Oil (DGO in London, DRAGF on the pink sheets), a company that’s controlled by the Emirates National Oil Company but also traded in Ireland and London.

But the ad has changed — it now includes more about potentially profiting from timing in the energy markets …

“Nevertheless, there’s a little-known annual occurrence that’s been handing dramatic short-term gains for years to the world’s most astute traders of petroleum commodities — and the small stocks that are tied to them…

“I call it the “Petroleum Pendulum.”

“I’ll also prove to you in a moment how this “pendulum” offers the savvy few who know about it a brief window of opportunity every year to buy into tomorrow’s super petro-players at rock-bottom prices…

“And this year, that window is opening RIGHT NOW.

“Now here’s the kicker: Unlike in years past, the 2008 swing of the “Petroleum Pendulum” corresponds with an unprecedented set of explosive profit circumstances for one small, perfectly positioned company…”

Now, let’s be clear — DeHaemer says that he picked this stock over a year ago, and he’s been touting it for several weeks now as it has tumbled Southward. This is not an idea that came to him as a result of the current pricing in the oil markets (which have now given back almost all of their gains in the last twelve months).

Here’s what he says about this “Petroleum Pendulum” and the profit window being presented thereby …

“Just about every market analyst and commodities expert on Earth — whether they’re mainstream, underground or alternative — agrees on this point:

“The days of cheap oil and gas are over. Multiple experts are predicting prices of as much as $200 a barrel for light, sweet crude.

“However, like any other commodity, petroleum products have their price fluctuations. And there’s one specific annual fluctuation in gas and oil prices I call the “petroleum pendulum.”

“But that’s NOT because of new oil deposit discoveries or radical new alternatives to fossil fuel energy — or anything else that will permanently lower the cost of oil and gas.

“It’s because of predictable and typical demand forces that happen every year. Now stay with me here…

“American demand shapes petroleum commodities prices more than any other single factor. And, in America, the summer driving and flying season is over — yet, it’s still before the fall and winter heating energy ramp-up.

“That means oil and gas prices will dip a bit for a few weeks, which has indeed happened…

“Just like it does at this time every year…

“Now, here’s the payoff for you: When the price of oil drops seasonally, shares of smaller petroleum companies can drop in lockstep — regardless of whether these firms have anything to do with servicing America’s petro-thirst…

“Translation: For a few weeks right now, sharp investors can get even sharper bargains on small petroleum companies that don’t directly depend on U.S. demand — yet, whose share prices still fluctuate based on it…”

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So … the company is still the same, but now they’re adding a twist to the ad, the fact that the seasonal fluctuations in oil prices are the reason why the shares are down.

Oil and gas prices do have a long history of seasonality,