I Am Betting On Oil Price to Collapse,

Shorting oil futures fore next few years.

http://www.c-span.org/Events/Analysts-Weigh-In-On-New-Oil-Producing-Technologies/10737432280/

 

That's roughly equivalent to betting on a strong and more or less global recession.

Might be right, might not be, time will tell.

 

I think it is a good bet. But are you really looking for good bets where you have say a small edge or a strategy with an edge that puts you in the game?

 

Looks to be more a bet on oil shale extraction. Between that and ng from shale it might be a good bet; lots of hydrocarbons coming on the market that weren't projected just a short time ago. Even with economic expansion you could see falling prices as a result.

 

Pros:
1. Long term surplus oil supply;
2. NG is already over supplied and NG is encroaching into Diesel fuel vehicles and heating oil market, which accounts for 15% of oil products;
3. Euro crisis;
4. fiscal cliff;
5. strong dollar;
6. Emerging markets slow down;

Cons:
1. Iran sanction/conflict;
2. Fed ease

The pro factors are much stronger and more structural than the cons, but may need to limit size and ride the drawn down initially.

 

That supply is dependent on high prices. Shale is extremely expensive source. Prices come down, supply goes down.

 

$70 WTI is the threshold for shale oil. $4 Nat gas was the threshold, but did not stop it going below $2.

 

Getting prepped for the big EU crash huh? Good man!

Should happen sometime in the next couple years...

 

So whats your plan? Just shorting a bunch of Dec '14 or what?

 

I have three short contracts qmu2 now, will add new contracts from their proceeds. I fear of QE, Iran conflict, and the whole premise is wrong.