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Oil, gold and silver

June 15th, 2009

Back in May I bought a small post in Malka Oil, a Russian oil dwarf traded at the OMX Exchange in Stockholm. The company have been going through some very very serious trouble in the wake of the credit crisis and semi-crash of the oil price. Once traded in the range of 4-5 SEK this company was on the brink of bankruptcy and I got in at 0.12 SEK (the lowest traded price was 0.04 in march, but then it was a real lottery ticket). So what has happened since the low point? Well, there’s been private security (mercenaries) occupying the oil field (!) and other exciting actions like that. The company’s pipe line is still blocked by a disgruntled previous vice chairman that claims Malka Oil ow his construction company millions. Legally this conflict was closed last Monday by a Russian court, that ruled in favor of Malka Oil. Since then the price of the stock has risen to a high of 0.23 SEK and closed this Friday at 0.20 SEK.

So, what will happen in Malka Oil now? Well today there’s a share holder meeting (it was postponed to wait for the Russian court ruling). It is expected that there will be much information released about the company’s state, and it is expected that it is good news.  So, I think we will see another nice push after the meeting. The proven oil reserves are really cheap here. If they can get production started again (after the mercenaries were there) and is able to use the pipeline I think the market will recognize this with a fair price based on the current oil price, which is in a upwards movement in itself.

That said I only have a small post in the company myself. Don’t put your life savings into it :)

In general I think we will see a price of 75 USD during the summer, just as OPEC wanted.

Gold and silver got hit last Friday after a very nice two weeks. I which I had been more active and got out, but I didn’t. I will sell off half my positions today because I don’t see a clear trend right now, just as I don’t at the exchanges in general. Summer is here…

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