Thursday, February 24, 2011

Italy Depends On Libyan Oil

This one's fast and easy to digest.  Libya's turmoil has cut its oil production.  Italy gets 22% of its crude from Libya.  Direct substitutes for light sweet crude are not easy to obtain on a moment's notice.

Short ideas involve obvious candidates like ENI SpA (E) and the iShares MSCI Italy Index Fund (EWI).  Similar short ideas are probably available for Spain, Ireland, Austria, and any other country drinking from Libya's tap. 

Full disclosure:  No positions in E, EWI, or anything else mentioned above.