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Can a New Oil War Lift Crude?

If another attack on oil tankers in the Strait of Hormuz can’t significantly lift oil prices, I’m not sure anything can snap crude out of its funk.

Oil futures are slipping into the red early this morning following yesterday’s attack on two tankers in the Gulf of Oman. We don’t officially know how the ships were attacked or what parties are responsible. But U.S. officials were quick to place blame on Iran, who promptly denied the attack.

Oil spiked briefly following the attack, gaining as much as 4% early Thursday. But crude settled higher by just 2% on the day and failed to erase the damage done by Wednesday’s sharp drop to 5-month lows.

WTIC

While this probably isn’t the last we’ll hear about the attack, it certainly doesn’t feel bullish for freefalling crude right now.

Turning to the ride-hailing IPOs, it appears Uber Technologies Inc. (NYSE:UBER) is widening its lead over rival Lyft Inc. (NASDAQ:LYFT).

Uber is outperforming Lyft at just about everything, even electric bikes and scooters.

Lyft’s fleet was recently recalled due to rider injuries everywhere but San Francisco. They’re slowly returning to the market — but Uber just upgraded its units with swappable batteries, reports Business Insider.

Uber also has a new scooter model in addition to the new bike accessories. This scooter revamp is equipped with slightly better brakes and more aggressive tires. Uber hopes that the new user-swappable batteries will lead to better infrastructure for its fleet, allowing for quicker rides and longer ranges.

Full disclosure: I haven’t had many nice things to say about the ridiculous scooter trend taking America’s cities by storm. I know there are plenty of smart folks who think electric scooters are the next big disruptor in transportation. But I’m not sure Bird, Lime, or Uber’s Jump scooters will ever become profitable enterprises.

Plus, these scooters are downright dangerous. Mile for mile, electric scooters have caused more injuries than cars and bikes, according to data from a trial run in Portland. Will these numbers deter new riders? I doubt it. But some cities might think twice before allowing scooters to take over their streets.

None of these concerns are deterring the bulls. Uber shares jumped more than 5% yesterday. It’s less than a buck away from posting new all-time closing highs. Meanwhile, Lyft is also trying to break out of its dreadful post-IPO downtrend. A close above $63 could ignite a new rally for this struggling stock.

UBER

LYFT

For what it’s worth, Wall Street clearly favors Uber. Analysts have offered up a staggering 17 buy ratings, five neutral ratings, and zero sell ratings, placing a price target of more than $53 on the stock.

UBER shares would have to rise 20% from yesterday’s closing price to hit this mark.

Finally, let’s see how Chipotle Mexican Grill’s (NYSE:CMG) incredible comeback is working out…

When we last checked in with Chipotle in February, shares had just jumped double-digits after reporting better than expected fourth-quarter results. The stock rocketed higher by more than 13%, breaking above $600 for the first time since late 2015.

Shares have now broken out to new 4-year highs this week following more than two months of consolidation. The stock is now up 85% from its Christmas lows.

CMG

It also doesn’t hurt that it’s been about six months since anyone has fallen sick eating at Chipotle.

You might recall the burrito chain temporarily shut down one of its locations last summer after an investigation revealed as many as 700 people might have been sickened after eating their food.

Meanwhile, Chipotle stock tanked on the news. The ghost of past food poisonings spooked investors, sending shares lower by as much as 8% the day the story broke.

That’s when something peculiar happened: Chipotle shares caught a bid.

After briefly visiting the lower end of its summer trading range, Chipotle stock quietly rallied despite the bearish headlines. The reaction to the bad news turned into an important change in character for the stock. After all, there are few events more bullish than a stock that moves higher following a negative news event.

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Rude Awakening PRO and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing for 13 years. In 2018, Greg’s Rude Awakening PRO portfolio beat the S&P 500 by 14%.

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