Just want to get your thoughts. Anybody else super bullish on oil with a time horizon of 6+ months? I need some contrarian view points. Too much confirmatory bias in my head.
na, oil is going to 40,....Yeah thats the ticket... i mean it's only been above 90 for how long? The middle East is stable and there is not a Geo-political reason to be bullish on oil. The EU may collapse, if this happens it should not interrupt the oil flow through Europe. World Economies have been slow for 5 years now...but oil has been some what strong. Technicals look as if oil has put in t a floor ......but what does that mean. So, I see all the reason's in the world for people to be short oil. Yea, thats the ticket.
Thanks! What about emerging market demand, Brazil more than China and OPEC's production rules? I don't know about the Middle East being too stable...Egypt and it's military rule. Possible sanctions on Iran. Although if there is a huge pro-western movement, that could lower oil prices. I see more upside than downside and if a decline does occur, someone will keep the price up. Possible shocks include alternative resources and huge oil find. But finding land based oil is harder and with the current economic climate and relatively lowish cost of oil in developed countries, no one's going to fund research in alternative resources.
I think the down-side risks look greater. Middle-east is volatile. Egypt is in a flux. And after the initial euphoria of victory subsides in Libya, the situation can turn similar to Egypt. Iran is also engaging in shenanigans. Further sanctions can lead to anywhere. The charts also don't look promising. 95 is a crucial support, below which 90 is another important level. On the upside, a break of 103.37 resistance is needed to confirm rally resumption.
the problem is, above $100 everything starts shutting down. Saudi makes very good money at $70, but they have a lot invested all over the world in stocks which suffer above $100. 6 months? I'd want to have pockets deep enough to survive $65 at least, if not more. 6 years? no where to go but up. Very difficult to make money in any commodity without a lot of margin. The chances of some stock going from $20 to $40 is almost always better than a commodity going from $100 to $200.
Any upside in oil is very limited unless they shut down exports which I dont think would happen, if it did it would send oil to $150-$200 a barrel and that would certainly cause a global recession. So oils upside is limited, I see more downside than upside, of course it could go to $110-$125 just based off of news that Europe is going to avoid a deep recession, but by that point it would be safe to say oil is overvalued and due for at least a 50% correction.
Thanks guys. Now I feel uneasy about my position. Just what I needed and I'm not being sarcastic. Edit: Now I feel fine again. Need more reasons that oil goes down. What about inflation. That's got to hit some day.
Looks like you don't know about the Bakken Shale Oil Field in North Dakota & Montana. There are other oil finds in Texas and Pennsylvania with hydraulic fracturing. The biggest obstacle to oil production is Obama and the EPA.
Why in the world would you short oil with this kind of chart? Everything is pointing higher at present and a down trend was broken back around October 20. All moving avergaes are stacked one on top of another as well defining an uptrend. If you want to be short as a reversion to the mean fine,...but that is only a time to buy more for the uptrend to resume if you ask me. I see very little weaknes in oil. I could care less about fundamentals and why oil prices SHOULD go lower. The market is teling you otherwise. Definitely long here...