More Dark Side Ideas: Oil Stocks

Great rally today, but before you go thinking oil is making a comeback, think again. 

Oil prices have already been cut in half since the summer and consider all of those oil related companies that will be reporting bleek profits.  Get ready for the force grip to grab onto oil services, oil sands, and the biggest of the oil companies. 

You don't know the Power of the Dark Side.

Thanks to oil prices tanking and world demand slowing, here's your short plays:

Oil Services

Drilling platforms operations, oil exploration and production efforts, here's the companies that do it all: 

Schlumberger (SLB) , Halliburton (HAL,), Baker Hughes (BHI) and BJ Services (BJ) get in line, more doom and gloom is coming.

Most of these stocks have already been cut in half YTD, but there's more room to fall.

The DUG

A StockMaster favorite, any time oil stocks drop, this puppy takes off, your play is ProShares UltraShort Oil & Gas (ETF) (AMEX:DUG), it's up 15% this week.

ProShares UltraShort Oil & Gas (the Fund) seeks daily investment results that correspond to twice the inverse daily performance of the Dow Jones U.S. Oil & Gas Index. The Dow Jones U.S. Oil & Gas Index measures the performance of the oil and gas industry of the United States equity market. Component companies include oil drilling equipment and services, oil companies (major and secondary), pipelines, liquid, solid or gaseous fossil fuel producers and service companies.

Integrated oil companies

The big oil companies that produce, refine and market oil and natural gas like Exxon Mobil (XOM), BP (BP), ConocoPhillips (COP), Chevron (CVX) and Royal Dutch Shell (RDSA) all make good short candidates.  Don't get us wrong, we still believe in oil, just not until next years driving season, there's no need to go long on these big boys unless you are playing the day trading swings.

Oil Sands Players - Favorite Short Candidates

Suncor (SU) and the oil sands players, their barrel of oil is the "Most Expensive Barrel". Suncor's bread and butter is developing the huge resources of the Athabasca oil sands and turning that soil into oil. For a full list of Oil Sands companies, click here.

Oil-sands projects will be profitable if crude is priced at $95 to $100 per barrel in coming decades, said Ryan Todd, an analyst for Deutsche Bank AG in New York. Bitumen can be tapped at existing projects for roughly $40 a barrel, he said.

"The oil-sands oil typically tends to be the most expensive barrel to produce out there," Todd said.

The lower oil prices go, the less revenue and profits for oil sands companies.

Now the true power of Vader, Chad Vader - Day Shift Manager #1