Crude Oil to $144
- Thread starter Wallace
- Start date
Oil is getting spanked today. Yikes.. down 2.5%. This market is getting whipsawed a lot lately.
First there is no such a thing as peak oil advocate, just like there is no gravitation advocate. Peak oil is a fact, get use to it.
OK, once you acknowledge it, you can be more comfortable with the following. Just like others already pointed out in this thread, oilsand production is slow to upscale. The max. they expect from Canada is 3-4 mbpd and that is 10-20 or more years from now, when the projected demand is an extra 10-15 mbpd by 2015.
So as you see we have a "slight" difference between supply and demand...
<i>First there is no such a thing as peak oil advocate, just like there is no gravitation advocate. Peak oil is a fact, get use to it.</i>
I am a peak oil advocate. You claim they do not exist, I exist, hence you are wrong.
Peak oil at some point in the future is a fact. Peak oil in the near future is a theory which is still a matter of debate between well informed people.
Let's at least make this discussion about information not just sophistry over words.
Martin
I am a peak oil advocate. You claim they do not exist, I exist, hence you are wrong.
Peak oil at some point in the future is a fact. Peak oil in the near future is a theory which is still a matter of debate between well informed people.
Let's at least make this discussion about information not just sophistry over words.
Martin
I see two probable scenarios for oil now. First one is that we run to $150, top out, and fall back hard. Second is that it blows through $150, in which case I expect a giant parabolic blowoff top up to $190-200. I would then exit all longs into that runup and back up the truck on oil puts and place some outright shorts too. IMO if oil hits 190-200, it will then collapse back to at least 150 in short order (1-2 months), and probably back to 100 over the longer-term (say 9 months or so).
Thus I would recommend, once we get to say $147-148, exit longs and convert to calls instead to limit risk. Once we approach $150, it should either blow through or fall back pretty quick. I don't see it hitting $150 then sitting then for 1-2 months - it kinda has to make a move one way or the other. Thus options make the most sense.
Also you have a nice contingency trade. If it blows through $150, it isn't likely to stop at $160 or 165. No, the most likely scenario above $150 is a buying/short-covering panic, which IMO will take it all the way up to 190-200.
Thus, a great limited risk play would be to sell the $150 calls once we get to say $145-150, and buy more of the $170, 180, 190 and 200 calls. Basically do a ratio backspread. That way if 150 is resistance and oil falls back, you don't lose much. If oil blows up to 190-200 you make a killing. You lose if oil gradually creeps up to say 150-170, which IMO is unlikely without a final blowoff spurt up.
Any comments?
Thus I would recommend, once we get to say $147-148, exit longs and convert to calls instead to limit risk. Once we approach $150, it should either blow through or fall back pretty quick. I don't see it hitting $150 then sitting then for 1-2 months - it kinda has to make a move one way or the other. Thus options make the most sense.
Also you have a nice contingency trade. If it blows through $150, it isn't likely to stop at $160 or 165. No, the most likely scenario above $150 is a buying/short-covering panic, which IMO will take it all the way up to 190-200.
Thus, a great limited risk play would be to sell the $150 calls once we get to say $145-150, and buy more of the $170, 180, 190 and 200 calls. Basically do a ratio backspread. That way if 150 is resistance and oil falls back, you don't lose much. If oil blows up to 190-200 you make a killing. You lose if oil gradually creeps up to say 150-170, which IMO is unlikely without a final blowoff spurt up.
Any comments?