If OPEC HINTS at cutting production, just a HINT, you are going to see oil back above $60 and if they start cutting you will see $75+ within months......We all know its NEARLY IMPOSSIBLE for oil to stay range bounce between $35-$45.... There is always going to be something or someone thats going to cause a situation where oil prices are going to surge!!! They say EVERY SINGLE PENNY increase in gas prices drains $1 BILLION out of the economy each year....Looks like that nearly $10 rise in oil the last few days is going to take quite a few billion out of the US economy moving forward. Not like the drop in oil prices did anything to spur economic growth like most thought it would, it actually didn't do anything to create growth, so in reality any upside in oil will only cause more out of pocket expenses for consumers...did anyone really take that extra $4.92 worth of savings each week from filling their cars and get all giddy that they now had extra money to go out and spend spend spend????? Well thats what all those highly paid economists thought.... from business insider..... Crude oil is going parabolic Myles Udland Read more: http://www.businessinsider.com/crude-oil-price-august-31-2015-8#ixzz3kPcW0jES Crude oil is going parabolic. In just a few minutes on Monday morning, the price of oil went from down 3% on the day to up more than 5%, with West Texas Intermediate crude rising above $47.50 a barrel for the first time in a month. This rally follows a 2-day surge to end last week that saw WTI prices rise nearly 20%. According to the folks at Bespoke Investment Group, this is the biggest 3-day rally for crude since January 2009. Last Friday, Dave Lutz at JonesTrading noted that quite simply, people were betting heavily against oil and those shorts were getting squeezed out at the end of last week. And so some of this may still be getting shaken out on Monday, the final trading day of August. FinViz Monday's move in crude also follows a report from Reuters that said OPEC, the 12-member oil cartel led by Saudi Arabia, "stands ready to talk to all other producers," according to a bulletin from OPEC. The bulletin added that these talks would have to be on a "level playing field" and that OPEC will protect its own interest. This news follows a report last week that indicated OPEC-member Venezuela had been urging other members to convene an emergency OPEC meeting to address the cartel's production targets, which have been overshot all year in the face of a collapse in oil prices. Venezuela had been seeking to have these talks coordinated with Russia, a non-OPEC member but a state that derives much of its governmental revenues from the sale of oil. Of course, Saudi Arabia is seen as the leader of OPEC, and any concessions or even discussions regarding production targets still run through the Saudis. But with oil prices taking a new leg lower earlier this month, there is a growing sense that OPEC will blink; or perhaps it already has. Read more: http://www.businessinsider.com/crude-oil-price-august-31-2015-8#ixzz3kPc2szv3
So thats all it takes to lift oil $10 bucks in a couple of days??? Hmmmmmm, wonder what the excuse or rumor will be once its near $75....they will probably whip out the old China story once again....
no, I just think that made the market jittery to the bullish side. And then you know how it goes, buying begets more buying. I have no idea if we will see lower lows again, but I do know the whole world works really well at $70.
I agree that buying begets more buying, I noticed that last time oil went from $44 or so to $60+ in a matter of weeks, it eventually fell back down, I think $50 is resistance and I also think it will have ZERO problems breaking $50, wouldn't surprise me one bit to see oil back above $60 and breaking out of that range it tried to break out of a few months ago and couldnt....without a problem oil could be back at $75 by end of this year early next. Im no oil bull I just figure that once oil starts to move it moves and since OPEC could easily control pricing, all they have to do is simply cut production and oil could be back up in no time, I would then easily start shorting oil....if OPEC had cut back months ago oil wouldn't have dropped under $60...
I've got some call spreads on USO ranging from Jan 2016 to jan 2017 that I put on last week....the strikes are pretty close together though so the problem is even when they are in the money, they are so far out date wise that it is going to be quite awhile before I can lock in the max profit on them. Might just get creative, I am hoping to add more though. My risk/reward is incredibly good on them. USO $18/19 call spreads for 1/2016 were selling for .06 last week. I didn't have but one position on to profit from a spike in oil, so I figured I would just put $100 up approx and see what happened.
UWTI UP 20%, this etf starts to really work when oil is up days in a row and up by a lot....volume is surging, nearing 250,000,000 shares which is incredible....it was literally sitting at .71 cents last week, today at $1.50 up over 100%!!!!!!!! I own a lot of UWTI and was supposed to double to even triple down my position when oil was under $40 like I said I was but never did, thought I would have some extra time before oil surged back above $50, I was very wrong...could have had an enormous amount of gains these last few days oil has surged...oh well, Ill just play the downside in oil...as of today I just added a new position in DWTI at $92.75. A small position...
Oil rise has correlated to S&P rise lately (not always but mostly). Could it be that oil intervention is being used to try to prop the market (divert a down turn)...keep the party going. Seems that is one thing (maybe the only thing lately) the US and Saudi has in common (the need for strong US markets). Saudi conflict in Yemen is not new? China story has been filed away for a while? They wheeled out a refinery fire "story" a few days ago...that was probably the tip that a move up was coming. So if US and Saudi are "intervening" in the oil story they probably could send it back up to $70 without too much problem. Timing is suspect here. Oil just coming off the driving season (fell hard the entire driving season). Oil usually settles lower into the fall season.
Funny human psychology: if it falls a little, it's a correction; if it rises a little, it's a dead cat bounce. We all see what we want to see.