When you are saying you are holding some ETF for long haul, I hope you are not talking about USO or OIL?
Prev Lows 37.50 area, next low could go to 32, but odds are it'll test 56 before that. Finite Source, costing most companies 60-70 per barrel to extract and process, below that is not sustainable, they'll have to close shop worst case, then the lack of supply will sky rocket the price. Russia situation is improving aswell, there helping in Syria against ISIS, if Ukraine calms down then they'll let price up again, I reckon this is all to bankrupt Russia, the only way to hurt them.
My thoughts on this are why are you trying to pick a bottom? I would short rebounds until the market really turns. Then you are going with the flow instead of peeing upwind. It seems harder because oil seems so cheap. But it might be expensive later. Inexpensive commodities tend to become more inexpensive until they reverse. When oil eventually reverses then you can play the long side. Until then sit on your hands. Even if you are right in this trade its a bad trade.--Swimr
While you were fixated on buying something that is losing value, the Australian dollar rallied out of a daily triangle against the upward dollar trend. There were probably several other really good setups you missed this week while you were looking at oil. And there will be more in the coming weeks and months while you wait for The Great Pumpkin to arrive.
There is some bad economics here. Saudi's marginal cost for oil is $15 a barrel and they have more supply then God. The 60 to 70 dollar cost guys are the shale players and while they may not produce here they also have more supply on hand then God. They will be selling for the next year at these prices and lower. The demand demand destruction from China is the death nail. Even "if'" China's economy did a 180 and went to the moon, there still is too much supply. We need another 12 months to work it off and even then we are still producing so we will have to work off this supply as well. Oil is going to the 20's.
That's wonderful. Who benefits if that's true? Right now the dollar is strong and oil is down. Maybe it's just a dollar play and the rest of the fundamentals are following. I wonder if the dollar were down would this weakness in oil even be happening .
Well.....almost everyone benefits. Oil is priced into almost every product you use either directly or indirectly. As far as the dollar, while it has effect, it's not the reason for the decline. Although the strong dollar is not doing any favors for all shale companies drowning in debt. It's costing them more money to service their loans.
I'm thinking the overall reason for the decline is the economy sucks worse than is apparent. So you have demand destruction weighed against lower costs. If true, I would expect lack of demand to be a stronger factor as far as earnings and the markets. So I see it as more of a short play