so russia and fracking in the US is fucked, this is probably what the saudis want because the US is only their ally because americans love to bring freedom to oil producing countries and would not do so if they could produce their own, saudis also generally dont like russia
medium risk investment: buy SPO on monday
low risk investment: expect high volatility and a downwards momentum due to the rapid descent over the past few months, wait to see if it drops even further, certain buy if Brent reaches $50 per barrel, good buy if it stabilizes again at maybe $55 or something
wait UCO, not SPO
http://www.livecharts.co.uk/MarketCharts/brent.php
uh oh, it dropped from $60 to $58 in a matter of hours, looks like the low risk investment theory was right,
this is exciting isn't it guys! guys? ladies too if there are any here...
dipped a little below $56 today to new lows then went back up to around $57
http://www.livecharts.co.uk/MarketCharts/brent.php
http://finance.yahoo.com/echarts?s=UCO+Interactive
It reached 58.5 on Dec 16 but didn't go below this again until the massive dip on the 29th. This suggests we could well see it hover around this level for weeks before continuing to descend and does not necessarily indicate that it will bounce.
I think I might need to rely more on fundamentals and news, I still think we are in bounce territory and anything could trigger a recovery.
Isn't cheap oil good news?
Another rapid drop just like 29 Dec 2014, from 56 to below 53 then up to 53.75 just now.
http://www.livecharts.co.uk/MarketCharts/crude.php
WTI just dipped a tiny bit below $50 before rising again.
Most analysts say $50, some say $40, it hit $40 during the credit crunch but this panic is not quite as strong, most fracking and shale oil companies are no longer profitable at $50. $50 is definitely a psychological factor. As I see it we are in the "grey area" and the risk of it bouncing increases the lower it goes, right now it is highly likely.
Different investors operate on different timescales and only have so much purchasing power, there are day traders, then a number of speculators trying to buy close to the bottom as well as various investment funds, there are businesses who actually use crude who want to buy futures, some have to do so within days for business reasons and may have been putting it off due to the dropping prices and might buy earlier than a speculator might, others were waiting for lower prices like the speculators. Businesses operate on a longer scale and have more purchasing power.
Don't know. We are in random walk territory so it is difficult to analyze price movements and related them to fundamental analysis without "reading tea leaves".
uh oh, brent nearly reached $50
I bet when I check tomorrow it will have already started to bounce.
http://www.livecharts.co.uk/MarketCharts/brent.php
yep, it did dip below $50 and appears to be bouncing, within the past 2 hours in fact it went below $49.7 and is now over $51, it is now a contest between momentum traders and speculators who planned to buy at the $50 mark
hitting $50 has very clearly bucked the trend, at least in the short term, this is probably the right time to buy but I am still hesitant
actually I think waiting longer is the right decision, it has barely been a day
You can't predict tops and bottoms but you have no inkling of whether you are at the bottom or not if you're still in a downwards trend. Just as a speculator investing in a bubble doesn't know when they're at the top until after the event has passed, looking backwards all they see is an upwards trend. Though in the case of a bubble the drop can be very sudden, whereas stocks often climb more slowly in the absence of some major event influencing the price.
So sitting back and relaxing with a drink and waiting for something to give might be a better strategy than picking a random price and saying "i'm buying here". Unless some other facts and research back up that decision, however when you are in random walk territory it might be better to wait.
2 more dips, this time it has barely made it past 50, if it doesn't go back over 51 we can assume speculators are losing hope that it will bounce at 50
as for UCO it is random walking between 8 and 8.7, if it goes below 8 again soon I might buy
>>12
correction we can't assume, but it would certainly suggest speculators are losing hope
Are you actually buying barrels of oil? Surely you have no need for this besides as a commodity like gold? Where do you store it? These are stupid questions but I've never heard anybody discuss actually buying oil before.
>>14
I am buying UCO which is a 2x leveraged ETF, meaning they buy various financial instruments such that if the oil goes up by $10 the fund will go up $20 or vice versa
47.5
http://www.livecharts.co.uk/MarketCharts/brent.php
also UCO has dropped below 8
tempted to buy now actually, even if it drops further and I don't buy at the bottom it would still be a good long term investment I think, my only last remaining fear is that low oil prices are a new paradigm but there is not much evidence for that
http://uk.businessinsider.com/crude-oil-cost-of-production-2014-5?r=US
http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2014.pdf
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=alltypes&aid=2&cid=regions,&syid=2011&eyid=2013&unit=TBPD
Only a fraction of production comes from countries that produce oil at less than $40 a barrel, about 24 million barrels a day out of 90 million, much production costs over $50 a barrel, though this is partly due to capital costs
shale is of course fucked
http://www.reuters.com/article/2014/10/23/idUSL3N0SH5N220141023
Goldman Sachs forecasts $42 a barrel.
Yeah. I'm glad I don't drive.
So, on Friday...
WTI dropped to nearly 45
brent still in the 48 to 49 range as it has been the past few days
UCO back below 8, nearly reaching 7
UWTI dropped from 3.4 to 2.68 over the week
http://www.livecharts.co.uk/MarketCharts/crude.php
http://www.livecharts.co.uk/MarketCharts/brent.php
http://finance.yahoo.com/echarts?s=UCO+Interactive
http://finance.yahoo.com/echarts?s=UWTI+Interactive
Good article on contango and the risk of USO and these ETFs underperforming.
http://www.tradingnrg.com/uso-investors-beware-of-the-contango/
UCO prospectus, any investment should take place on the scale of days, short term.
http://www.proshares.com/funds/trust_ii_prospectuses.html
The last time WTI was this low was on the 14th, just before it shot back up to $49. Click, hold and drag the UCO and UWTI charts back and you can see UCO rose 8% from around 7.6 to 8.2 while UWTI rose 10% from around 3 to 3.3
There is not much chance WTI will stay under $46 for long, though it might linger there for a while I believe the chances are reasonable enoguh.
During the week the price dropped below $45, lower than $44 at points, then to $47.5 in the last hours of Friday. So my prediction played out, including the "it might linger there for a while" part.
Y'all should thank me for for "Operation Iraqi Liberation"!
>>22
Thankyou George Walker Bush, God bless you and God bless the United States of America.
Allah bless Saudi Arabia also for overproducing.
So WTI is over $52 again, UCO went from 7 to 9 (29%) in a week, UWTI from 2.5 to 3.85 (54%), we may be looking at the bounce in progress as we speak but if you haven't bought yet it would be a risky assumption. So my position is hold I guess.
As I said UCO and UWTI are short term trades only, it might actually be a good idea to sell immediately.
back down below $46.5 for the first time since January on news that oil storage ran out
