Oil Options Hit Highs as Verleger Predicts 44% Plunge

Sept. 21 (Bloomberg) -- Oil traders are paying more than ever in the options market to protect against a plunge in crude prices.

The gap between prices of options betting on a decline and those that would profit from a rise in oil widened to a record 10 percentage points, according to five years of data compiled by Banc of America Securities-Merrill Lynch. Crude stockpiles in the U.S. are 14 percent larger than a year ago and OPEC is pumping 600,000 barrels a day more than the world needs, according to the International Energy Agency.

While the recovery from the first global recession since World War II pushed oil up 62 percent this year to $72.04 a barrel in New York, growth alone isn’t likely to erode the glut by the end of next year because production exceeds demand, data from the Paris-based IEA shows. A drop in prices would penalize companies from Exxon Mobil Corp. to BP Plc and exporters Russia and Saudi Arabia.

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Ual Corp (NASDAQ:UAUA): Upgraded to Overweight at JP Morgan; Positive comments from Barclays

Ual Corp (NASDAQ:UAUA): Upgraded to Overweight at JP Morgan; Positive comments from Barclays

Airlines and particularly Ual Corp (NASDAQ:UAUA) are getting are getting some commentary this morning:

- Barclays is out saying they think many underestimate the potential for a significant airline revenue recovery, particularly for the legacy carriers. With recovery expectations muted, they think even a relatively modest recovery would pave the way for a profitable 2010 and materially higher share prices. They continue to favor legacy airlines over low-fare carriers, with top picks DAL and UAUA, the former getting no respect lately. Among the low-fare airlines, the firm also favors ALGT and JBLU.

Firm believes current thinking on the industry revenue environment and potential for recovery is very small relative to the potential. They understand that companies need to plan for a revenue environment that remains very soft. They also understand that revenue has been headed in a single direction (down) the entire year. While it’s easy to extrapolate these negative trends for a considerable period of time, the firm urges investors to consider two things...

Full details at http://notablecalls.blogspot.com/