Options Trading the Chevron Oil Spill in Brazil

Options Trading the Chevron Oil
Spill in Brazil

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Trading-the-Chevron-Oil-Spill-in-Brazil


Options trading the Chevron oil spill in Brazil took a
new turn recently.
A Brazilian court is requiring that 17 employees of
Chevron and Transocean, an oil rig operator,
surrender their passports.


Brazil appears to be ready to press criminal charges
against the individuals involved, on top of a civil law
suit for eleven billion dollars.
All this is about an oil spill in the waters of the
Atlantic far off the coast of Brazil.


Here is the background. Geologists have found
gigantic quantities of oil in the deep Atlantic waters
off the coast of Brazil.


These finds promise to take Brazil into the ranks of
the top oil producers in the world. Already the
country is the largest exporter of ethanol.


The Tupi field, promises 8 billion barrels and the
Carioca-Sugar Loaf may have as many as 33 billion
barrels.


These are both parts of a larger geologic formation
called the Santos Formation.
In trading oil options, oil futures or stocks, main
issues are supply and demand.


But, if the company involved cannot successfully
and profitably extract and deliver oil from its lease,
profits and stock price can fall appreciably.
Here is where the details of options trading the
Chevron oil spill in Brazil come in.


A major issue for options trading the Chevron oil
spill in Brazil has to do with the difficulty in
extracting oil from these newly found deposits.


The Carioca field is 170 miles from the coast of
Brazil where the water is more than a mile deep.


Beneath that there is a shelf of salt that is more
than a hundred miles wide and four times that in
length.


Because of the extreme depth of these deposits,
companies such as Chevron need to use newly
invented, high tech, approaches to drilling and
extracting the oil.


In this case the cost of failure may exceed that of
the BP oil spill in the Gulf of Mexico.
How to trade options in this situation may have
more to do with internal politics in Brazil and less to
do with just how much oil was spilled.


Chevron Corporation, CVX, is currently trading at
around $110 a share.
It bottomed out in the $58 dollar range during the
depths of the recession.


During the last year CVX has shown a degree of
volatility with the stock trading at times as low as
$85 a share.
In regards to options trading the Chevron oil spill in
Brazil could become a financial issue if Brazil decides
on excessive punitive damages for the recent spill.


According to press reports, BP executives believe
that Brazil is excessively concerned about a fairly
minor oil spill.
That opinion does not sit well with Brazilians who
demanded that the head of BP in Brazil come to talk
to the legislature.


The legislators were less than impressed when the
individual needed to speak to them through a
translator and now in Portuguese, the language of
Brazil.
Now this individual is handing in his passport and
awaiting the outcome of various court proceedings.


Profits in trading Chevron stock or options trading
the Chevron oil spill in Brazil may well be gained by
watching the political drama unfolding in Brazil.


When to buy puts on CVX may well when and if a
court ruling is about to be handed down in either
the civil or criminal matters pending in Brazil.


For more insights and useful information regarding
options and options trading,
visit www.Options-Trading-Education.com.


Options Trading the Chevron Oil Spill in Brazil

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Options Trading the Chevron Oil Spill in Brazil