Woodside – Covered Call Strategy 

Woodside Petroleum is under Algo Engine buy conditions and the recent higher low at $34.50 provides an attractive entry level.

WPL goes ex dividend $0.72 on the 23rd August.  Adding an October $35.50 call option generates an additional $1.35 per share of income.

For more information on the call option strategy, call our office on 1300 614 002.

 

WPL & ORG

Within the Energy sector we like Woodside Petroleum and Origin Energy as our preferred exposures.

WPL offers 5% franked dividend yield and when combined with a covered call option, we’re generating 10% cash flow whilst allowing for a moderate level of capital growth.

ORG offers appealing capital growth prospects as the company pays down debt and reinstates a more progressive dividend policy.

Strong oil prices and increasing LNG production numbers are tailwinds that are likely to continue for ORG. Capital expenditure is also tracking  lower than guidance and these factors combined are helping to add to group cash generation.

 

Woodside – Higher Low

Woodside Petroleum is a current holding in our ASX 100 model portfolio.

Recent production guidance suggests 2019 will likely deliver relatively flat production growth.  WPL trades with an implied oil price of around US$55.

Upside in the share price still exists and we suggest adding a covered call option to enhance the income return.

Crude Oil Continues To Slide Lower

The price of West Texas Intermediate crude oil dropped over 7% and reached a 14-month low of $50.15 in overnight trade in New York.

Yesterday’s price action extends the rout in crude oil to over 35% since posting a high of $76.90 on October 3rd.

In response, Saudi officials announced that they will attend next week’s G-20 summit in Argentina to meet with US and Russian representatives in front of the OPEC meeting on December 6th in Vienna.

Local oil names STO, OSH and WPL are all under ALGO buy signals and will stand to benefit from any indication that OPEC will cut production into 2019.

We see chart support for OSH at $7.00, STO near $5.25 and WPL in the $31.00 area.

Oil Search

Santos

Woodside Petroleum

 

 

 

 

 

 

 

 

Local Oil Names Rebound In Front Of OPEC Meeting

The price of West Texas Intermediate (WTI) Crude oil surged to a 4-year high of $76.90 just over a month ago.

Since then WTI prices have plummeted almost 30% and reached a low of $54.70 this week.

It’s clear that the market overestimated the impact of Iranian sanctions, increases in Non-OPEC production and the forecasts for lower oil demand in 2019 from the EIA.

Aside from the technically oversold conditions, the OPEC producers have hinted that they will take measures to shore up crude oil prices when they meet in Vienna on December 6th.

After trading to 18-months lows earlier this week, both WPL and OSH are now under ALGO buy signals.

We consider a price reversion to higher levels a likely outcome with initial resistance for WPL at $35.05 and OSH at $8.15.

Woodside Petroleum

Oil Search

Buy Oil Search

Our ALGO Engine generated a buy signal in Oil Search at $7.50 on October 30th.

With LNG prices firming, we recommend investors accumulate OSH shares at current levels.

OSH is our preferred value opportunity even though WPL and STO also look reasonable over the medium-term.

Oli Search