I Am Betting On Oil Price to Collapse,

I think it is a good bet. But are you really looking for good bets where you have say a small edge or a strategy with an edge that puts you in the game?
 
Quote from Random.Capital:

That's roughly equivalent to betting on a strong and more or less global recession.

Might be right, might not be, time will tell.
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Looks to be more a bet on oil shale extraction. Between that and ng from shale it might be a good bet; lots of hydrocarbons coming on the market that weren't projected just a short time ago. Even with economic expansion you could see falling prices as a result.
 
Pros:
1. Long term surplus oil supply;
2. NG is already over supplied and NG is encroaching into Diesel fuel vehicles and heating oil market, which accounts for 15% of oil products;
3. Euro crisis;
4. fiscal cliff;
5. strong dollar;
6. Emerging markets slow down;

Cons:
1. Iran sanction/conflict;
2. Fed ease

The pro factors are much stronger and more structural than the cons, but may need to limit size and ride the drawn down initially.
 
Quote from trefoil:

Looks to be more a bet on oil shale extraction.
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That supply is dependent on high prices. Shale is extremely expensive source. Prices come down, supply goes down.
 
Quote from Random.Capital:

That supply is dependent on high prices. Shale is extremely expensive source. Prices come down, supply goes down.
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$70 WTI is the threshold for shale oil. $4 Nat gas was the threshold, but did not stop it going below $2.
 
Quote from spd:

So whats your plan? Just shorting a bunch of Dec '14 or what?
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I have three short contracts qmu2 now, will add new contracts from their proceeds. I fear of QE, Iran conflict, and the whole premise is wrong.
 
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