Energy Report

Oil finally broke $60/barrel this week as we are currently trading at about $61.85. As a result, our USO fund which tracks oil futures is up more than 13% since our purchase of the fund. Our XLE fund which tracks the price of energy companies however is only up about 2.7%. This is to be expected though; when we bought the ETF I noted that it has a beta of .80, meaning it is 20% less volatile than the S&P 500.
In other news, Royal Dutch Shell PLC was given the OK to explore for oil off the coast of Alaska. Moreover, Russia and Qatar are continuing to discuss the possible creation of an OPEC like cartel for countries producing natural gas in order to influence the markets. The EU has formally announced their position against the creation of such a cartel, fearing that it would lead to higher natural gas prices amid the current crisis.
As for other sectors of energy, coal is starting to make a come back. TXU Corp. which is currently in play, increased its profit 33% due to the low cost of electricity from coal. I plan to start researching coal companies due to the fact that it is so cheap right now and provides a good alternative to oil.