While crude hit a new high to-day, the XLE did not, and the volume on up days is shrinking. I saw this same pattern prior to the gold reversal. As oil gets more expensive, people look to other commodities. There is some science to support the fact that oil may be a renewable resource. Lots and lots that we do not yet know about our oceans...meanwhile we are embarking on outerspace for our mineral / resource needs.
why would mexico or russia want to get hard to get oil reserves now? they would rather see higher oil price and get paid more for the accesible oil and save the hard-to-get-to reserves for later when oil is >200$.
Russia and Venezuela are producing less as is Mexico and the idiot Democrats are trying to push a bill through congress that would prohibit the US from buying the oil sands oil from Canada and also throw a windfall profits tax on them. It's a perfect storm of less supply, more demand and idiot politicians.
$140, possibility of course, if this is the case expect $4.50+ at the pump and some reallllly angry individuals, the consumer which makes up 2/3 of the economy will eventually tire out and GDP will fall hard over the next 12 months. As oil rises expect food prices to rise as wel____________ S2007S, I agree. As buffet has said in CODE, CONSUMER AND JOEY SIX PACK ARE FUBARED. Read between the lines on his "Speech". There are going to be a lot of Pissed off Americans but that will not stop oils run. The GOV is already speaking on "Cutting" tax on Gas. And I do belive we will see 6 dollars at the pump. Why not? EU pay's it. The economy is in a RECESSION IMHO as I do not belive the Crap the Goverment spits out. I do belive we are going to have a serious negitive GDP over the next few years with Massive Layoffs starting mid summer. UBS just started. Food, Energy will kill the middle class. This is a given. So, if you work a Salary job or have a cap in what you can earn, its gona be a long long long ride. The US energy policy has been, well I don't even know if we have one. Refiner. have not been built since the 70s, we do not drill domestically often, (that is changing.) Even if we drill heavy domestically, we can not stop the Emerging Markets from Growth. America has made a caculated mistake, which the Liberals deny and the Republican's play down. Only the "CAPITALIST" understand and are playing their cards right, if they are smart. We can stand up and sing the National Anthem all we want, bang our chest and say we are American. And American's will profit from this huge dynamic shift. However, the "Bottomfeeders" , the weak, the socalist, the poor, the Corporations that lost their way via Corporate Socialism and the indebt middle class will not. Simple as that.
Read last month's Bloomberg magazine to get an understanding of just how screwed up Pemex is, not too mention the Mexican government that sucks Pemex totally dry so that 42% of the countries budget comes from the 65% taxation of Pemex. Pemex is so broken down and full of debt ( even at $120 per barrel oil ) that their peak production was in 2005. On another note, in most cases, there is no easily accessible oil and it takes years to do E&P. You seem to imply in your post that E&P is like switching on a light switch from "off" to "on". Not so.
Okay lets get this straight, I bought DUG a few times from the drop from $37, I have been in and out of it, as of today I hold it at an avg cost of around $33.35, I bought more today below $30.00, am I worried, F$%K no... And guess what, Remember I sold SMN around $33.50 and you said it was going higher, well it didnt, technicals do not work with these Ultra BULL proshares, I told you it was going to fall hard again but you just didnt care to listen, you based it all of technicals that apparently didnt work. Well I just bought more SMN today. Ill wait till it trades above $33.00 to sell AGAIN....
Landis and Makolda do you really think I don't know how DCR trades, I have followed it since it was trading above $50 and wellllll before the 3 for 1 split, I know every single detail about DCR and I know on June 25th it stops trading, I know this, its a $3 stock, it makes up less than 1% of my portfolio, its a trade to see oil back below 110 over the next 3-4 weeks, if that happens DCR will be back above $4.00 without a problem.... sorry you guys think oil only moves one way, but guess what oil is in a huge bubble, and if you think its just going to keep on running while the economy slows you keep thinking that, the economy cannot put up with oil prices the way they are, eventually the consumer does weaken....COMMODITIES ARE IN A BUBBLE, WAKE UP!!!
Actually I sold it in the mid 8's after buying it in the low $7's, as I recall all the bashing I received off that trade, it seemed that it was headed lower when in fact it touched $6.75-$7 range and ran up to 10+ in only 1 short week. That to me looks like a 40% return but all the naysayers didn't believe the airlines would bounce once oil dropped 5 bucks, well you and your chart reading again didn't see that 40% jump, oh well.
S2007S, fact is you come on the board every day with BRAND NEW 'SHORT OIL' TRADES and magically they all end up hugely profitable while crude marches higher. It almost seems you make more money the higher crude goes! I am sorry, I wonder if you're just playing us here. I love how you diversify: long DUG, long DCR, long an airline (now flat). Anything else? Maybe short CL futures and long USO puts?