Is OIL SERIOUSLY undervalued right now??

Overnight · Nov 1, 2019

bone said:
Yep, rangebound since 2015 and the world continues to set production records. Stock market rallies and sets new records; oil rangebound. Commodity pricing is all about supply and demand.
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I wish I stuck with my original plan. *sniffs*

Overnight · Nov 1, 2019

Anyone out there want to do it? Right here, right now, in the middle of the range is where you should calendar spread it! Do it! I would, but I have a bad hole in my mouth where a tooth used to be. It hurts, hehe.

yc47ib · Nov 3, 2019

orbit23 said:
I'm eyeing a potentially big trade to be made in oil. The risk to reward ratio is favorable and the odds of trade panning out... certainly plausible.

The trade is based SOLELY on the chart, but i can find a lot of narratives to go with it.

If the economy is going strong, the oil usually follows. And considering we are in a historical bull market(everyone calling for recession, every second thread on forums/twitter and social media sites alike - calling for a top on the market, record put volumes, retail shorting.... yet the market still going up. It's a bull market, boomer.). All that included, oil seems undervalued, if it is to move in the direction of the economy.

ARAMCO is said to be going public, and if they did, they would have to publish the amount of oil reserves(which are allegedly "indefinite"). And if the supply was known to be as huge, the price would tank - and this is the fear that is potentially keeping the price low right now.
There was also a lot of "FUD" - about bombings on these oil facilities. All of this is keeping the price surpressed.
It's extremely cheap for eastern countries to pump oil, but in countries like US, some of the oil is produced with fracking - which costs around 60$ a barrel(currently - not profitable).

If the economy is strong, it only makes sense they will pump the price of the oil and it will be profitable for fracking too. US is also imposing sanctions on chinese oil exporters, and thus due to the shortage of the tankers, the shipping prices are at records highs.

My knowledge on the topic is insufficient. A lot of what i said could be inaccurate. But broadly speaking, i think i am roughly somewhat somewhere correct?

I'm targeting 90$ on USOIL(WTI crude oil). Timeframe is something that i will not even bother predicting, because it's impossible to get it right. But i'm expecting little to zero downside, or else - i am probably wrong. It has to go soon.

So i'm looking for oppinions. What are your thoughts? Are you bearish on oil? Are you bullish? I'd like to hear the views from both sides!
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If your correct first target 58.23, second 60.22, then it can go higher or lower, not of concern now

CleverBoy · Nov 4, 2019

I think that oil will soon lose its position. I think electricity is the future. Experts say oil will remain relevant for 20 years. The price falls no more than 4%.

orbit23 · Nov 4, 2019

The price is going higher. The trade is panning out. I will let you know if i change my mind. You are not getting to buy at 50$ or 40$. We are either going to moon from here or i wouldn't want to buy it any lower. Below 54$ is invalidation for me right now. That's when i'm wrong, and as it moves up, i trail SL, but i don't speculate on tops. Let it run.

Aramco is a big bear trap and it's working out.

killATwill · Nov 4, 2019

A number of points to add to this thread.

- Global ISMs recovering.
- Rig counts have been dropping precipitously for the past year so supply will be tight.
https://tradingeconomics.com/united-states/crude-oil-rigs
- We got a 3 sigma move up in the price of crude on the Saudi drone bombing. Moves like that tend to foreshadow long term rises in the price of oil with consistency.
- US has a president who is a dove/non-interventionist which opens the door to geo-political risk.
- Lots of room for commercial hedgers to sell more in CL and Heating Oil. Looks like a bottom more than a top.

I am long CL.

Cuddles · Nov 4, 2019

i dunno; energy's been about my only consistent loser this year. The politics of it all mean you gotta keep prices low to keep the voter base happy.

dealmaker · Nov 5, 2019

Hedge Funds Buy Oil in Anticipation of Short-covering Rally: Kemp (Reuters)
LONDON (Reuters) – Hedge funds have started to become more optimistic about the outlook for oil prices amid hopes that the United States and China will reach a trade truce and the global economy will avert recession in 2019/20. From a fundamental perspective, hedge funds are rebuilding long positions in crude and fuels because the news flow about the economy is no longer deteriorating, even if it is not yet improving much.

orbit23 · Nov 6, 2019

dealmaker said:
Hedge Funds Buy Oil in Anticipation of Short-covering Rally: Kemp (Reuters)
LONDON (Reuters) – Hedge funds have started to become more optimistic about the outlook for oil prices amid hopes that the United States and China will reach a trade truce and the global economy will avert recession in 2019/20. From a fundamental perspective, hedge funds are rebuilding long positions in crude and fuels because the news flow about the economy is no longer deteriorating, even if it is not yet improving much.
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Good news after a 5%+ rally? Thanks but no thanks. I'm out for now. Afraid of volatility in stocks too... Will re-enter lower if a setup appears

orbit23 · Nov 6, 2019

Longer term outlook is still possible, but i'm trading on lower timeframes...

I'm just having a bad vibe about stocks and i don't want to be in oil right now... Nice setup would be something like this on Monthly. Fakeout before the breakout? Please.