How I am investment in Oil

J

JFonseca

Ok, lets put the money where the mouth is and call my shots.

I put 50% of my account in Oil and used the following ETFs:
85% in WisdomTree WTI Crude Oil (CRUD) bought at 2,90
15% in WisdomTree WTI Crude Oil 2x Daily Leveraged (LOIL) bought at 3,01

I am betting that WTI doesn't go bellow 15USDs and that will reach 40USD before year end. LOIL might be sold and converted in CRUD when WTI reaches 25USD, depending on how volatile the situation will be then.

Let's see how this works out.
 
It's a weird dynamic where low OIL, can potentially counter-act inflation or at least inflationary concerns / pressure under check for a while.

Seems like a balancing act, supporting CL around 20ish. Oil going sub 20 is not really a good look, but neither is CL rallying like crazy necessarily a good look either. I wouldn't mind the 30-40 range. That's seem reasonable and potentially keep things stable for a while longer (I use that term stable loosely).
 
trdes said:
It's a weird dynamic where low OIL, can potentially counter-act inflation or at least inflationary concerns / pressure under check for a while.

Seems like a balancing act, supporting CL around 20ish. Oil going sub 20 is not really a good look, but neither is CL rallying like crazy necessarily a good look either. I wouldn't mind the 30-40 range. That's seem reasonable and potentially keep things stable for a while longer (I use that term stable loosely).
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I think that deflation is the real risk, not inflation.
 
kmiklas said:
I think that deflation is the real risk, not inflation.
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That's exactly why inflation is a real risk though. It's no secret the FED does not want and has been fighting deflation for decades. So far they have done an amazing job (if you factor in they were not going to let a hard reset happen), than objectively they did great with what they had to work with.

The issue is will they over step their bounds in fighting deflation given the circumstances. It's a tough balancing act from there in my opinion. But again I am no economist, just an intra-day trader given my perspective and seeing what others have to say.
 
I wouldn't have used 50% of my account but I'm invested with 10% in WTI banking on it to go up from 20 to 40. I don't care if it's within a year or two. Expecting at least 30 by Year End
 
The reason why I am so confident in this strategy is that all oil producing countries, except Mexico, need to have 40USD. If the 20USD stays for long, shale will go broke, Saudi Arabia will increase debt and even the all mighty Russia will start to feel the pain. I believe that Saudi and Russia would like to keep it at 25/30USD for some time to destroy US shale, but 20USD is unbearable for everyone.
 
FroggerMan said:
Enjoy the contango...

MAY 20 19.87
JUN 20 25.53
JLY 20 29.55
AUG 20 31.09

At least you'll be able to lube up with cheap oil before every roll.
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I looked at CRUD history and it seems to track quite well the performance of CL. Contango effect is probably the biggest doubt that I have. Today I might have observed that - while CL was more or less constant both CRUD and LOIL were slipping (few cents).
 
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