I have been scaling into oil short play too with the ECB announcement coming this morning....looking for a "rate announcement" run up move to get a short term volume/price spike. I am targeting $147's as a possible high in the next trade day or two after the announcement if the Euro can get to the 1.6000's on a breakout move. Oil could pullback to below the $140's again until more data comes out in the next week or two....I like the idea of a short term news related volume/price spike as an entry area.
ECB raises 1/4 to 4.25% oil rising yet again t0 $145.30 Like I said as oil heads higher equities will continue to sell off, I don't think oil can sustain this movement, I think a short term top is in play and buying more DTO today under $21.50. If you have patience an oil short can be one of the best investments if timed perfectly, how many records has oil broken to the upside? It reminds me of the dow breaking constant 52 week highs in the 3Q of 2007, we all know where that went when everyone became more bullish than the next.
So another headline showing why oil is trading today at $146, if this is the case why is oil taking such baby steps, news of conflict surrounding oil should be sending oil up 10-20 bucks a barrel a day, not a $1.50. News about peak oil should send it above $500. AP Oil prices near $146 Thursday July 3, 6:30 am ET By Pablo Gorondi, Associated Press Writer Oil closes in on $146 per barrel after drop in US stockpiles and potential Iran conflict Oil prices neared $146 a barrel Thursday for the first time ever on reports of declining U.S. stockpiles and the threat of conflict with Iran. Comments by Saudi Arabia's oil minister suggesting his country had no immediate plans to boost production also lifted prices. Expectations that the European Central Bank will raise interest rates later Thursday could further weaken the U.S. dollar and drive oil prices even higher, as investors turn to commodities as a hedge against a falling greenback, traders said. By midday in Europe, light, sweet crude for August delivery rose $2.28 to a record $145.85 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract set a new closing record for floor trade at $143.57 -- a full $2.60 above the previous close. The latest spike means a barrel of crude has gone up by more than 50 percent since the end of last year, when oil was going for $96 a barrel. In London, Brent crude futures rose to a trading record of $146.69 a barrel on the ICE Futures exchange before retreating to $146.07, up $1.81. "Even though the rise of European interest rates has been priced into oil, an official announcement by the ECB will still add momentum to oil prices," said Victor Shum, an analyst with Purvin & Gertz in Singapore. The push above $145 a barrel was seen as a last technical barrier to prices hitting $150, in what analyst Olivier Jakob of Petromatrix in Switzerland called "the Morgan Stanley self fulfilling prophecy." In early June, a prediction by Morgan Stanley analyst Ole Slorer that oil prices could reach $150 by the July 4 weekend caused the Nymex contract to jump nearly $11 in a single day. Speaking Thursday in Madrid, Saudi Arabia's oil minister, Ali Naimi, left the door open for increased output, but said the kingdom's oil customers were satisfied and that no production growth was planned for now. The Energy Department's Energy Information Administration said Wednesday crude oil supplies fell by 2 million barrels last week, or about 800,000 barrels more than analysts surveyed by the energy research firm Platts had predicted. However, the report offered a mixed picture of energy use by the world's thirstiest oil consumer. Gasoline supplies unexpectedly grew by a considerable amount, and demand continued to slide -- suggesting record fuel prices are prompting a shift in American driving habits. Ongoing rhetoric about possible attacks on Iran, the world's fourth-largest oil producer and OPEC's second-largest exporter, also left the market jittery. Traders are worried Tehran could try to halt shipments and seize control of the strategically important Strait of Hormuz if attacked by Israel or the United States. About 40 percent of the world's tanker traffic passes through the Middle Eastern choke-point. Iran's foreign minister did not rule the possibility that Iran could try to restrict oil traffic in the strait if the country was attacked. "In Iran we must defend our national security, our country and our revolutionary system and we will continue to do so," Foreign Minister Manouchehr Mottaki said in an interview with The Associated Press in New York. Mottaki said he does not believe Israel or the United States will attack, however, calling the prospect of another war in the Middle East "craziness." A senior U.S. military commander vowed to ensure that the strait remains open. "We will not allow Iran to close it," said Vice Adm. Kevin Cosgriff, commander of the 5th Fleet based in Bahrain, after talks with naval commanders of Persian Gulf countries in the United Arab Emirates. The saber-rattling has left energy traders on edge as they try to ascertain the likelihood of a Middle East flare-up and the effect it could have on the world's already tight supply of oil. In other Nymex trading, heating oil futures added 5.15 cents to $4.1230 a gallon (3.8 liters), while gasoline futures rose 2.56 cents to $3.5750 a gallon. Natural gas futures gained 13.7 cents to $13.526 per 1,000 cubic feet.
Folks here have been shorting oil at every $5 increments since it hit $80. All of them have been trashed. If he wishes to short at $145, that's cool. I wish him luck.
I think shorting oil at 120, 130, 140 and even at 150 will pay off because when oil does sell off if you averaged in on the way up you will make quick profits on the way down when oil corrects, because its going to fall 2-3X faster. I bought DTO when oil was around 140-141, Im not shorting USO, but rather going long DTO, I dont play futures so the closest to shorting oil at this moment is DTO. My next buy in DTO is oil at 148-150 area.