What's the future of Crude (Brent)?

Sequoia1321

Sequoia1321

bVWRqebz


I've been getting long crude since Mid April. Got stuck in the USO, then switched to brent and only recently recovered my losses. Class action and government investigations against USO are ongoing last I heard, but not sure I'll recover much if anything. Still long brent futures. Still looks cheap in my opinion. Chart has been more bullish than S&P. What's your view? Where do you think we'll see brent in the next year or so? Do you like WTI more? If so why? Pre-pandemic brent was in the 60's and 70's. War in middle east might push it up. Trump and his allies might start something with Iran since he's behind on the polls, would be more likely for him to the give ok to his allies or create some trouble on his own. Very dangerous these next few months. There are tensions still in Iraq with Iran supported groups. I think there is a 25-50% chance something will happen, though not sure how that will necessarily impact oil, since last time there was tension and missiles even fired at a US base nothing much seemed to happen in oil price. Hopefully nothing bad will happen but if it does it's better to be well positioned. Iran is also heavy on natural gas, not sure how that might get impacted by a war. Straight of Hormuz is a significant lifeline of oil I believe, not to mention Iran's ability to hit oil production of US allies in the region. Vaccine would likely push oil up quickly. To me it looks overall still bullish on oil. Might be some jitters to the downside along the way but it looks strong in the long term as an investment. Do you agree? Target price 70?
 
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bone said:
If you are long oil you are de facto long the stock market. Expecting Brent to rally a further 61% is not realistic IMO as long as the world remains in economic recession.

With Soleimani gone and the downing of a Ukrainian civilian passenger jet, Iran has been quiet since.
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Not TOTALLY quiet. Apparently they put a bounty on Trump's head.
 
The price of Crude Oil has dropped a lot because of this panedamic sitution and countries has stopped to buy the Oil but I hope in near future price of Crude oil will be strenth again and will rise.
 
WTI is going to struggle to get to $50 by Q4.... it can barely stay above $40 and the market keeps rejecting the $41 level (4 days in a row and counting). Until we see a production quota changes from OPEC+, Bone is right that crude will mirror the stock market going forward...so we are range bound going into the election, just like the stock market.

Not sure how you came up with between 25% - 50% chance we go to war with Iran. That is an outlier/black swan (less than 5% probability) event at best. WTI is going to be stuck between $35 - $45/bbl going into the election. No vaccine until 2021 at the earliest, and a bad second wave in the fall/winter will have crude back in the 20's. You might have to wait till next year before seeing $50/bbl IMO.
 
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VolSkewTrader said:
WTI is going to struggle to get to $50 by Q4.... it can barely stay above $40 and the market keeps rejecting the $41 level (4 days in a row and counting). Until we see a production quota changes from OPEC+, Bone is right that crude will mirror the stock market going forward...so we are range bound going into the election, just like the stock market.

Not sure how you came up with between 25% - 50% chance we go to war with Iran. That is an outlier/black swan (less than 5% ) event at best. WTI is going to be stuck between $35 - $45/bbl going into the election. No vaccine until 2021 at the earliest, and a bad second wave in the fall/winter will have crude back in the 20's. You might have to wait till next year before seeing $50/bbl IMO.
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Crude back in the 20's seems far fetched. Wasn't it shutdown when it reached those levels? Also there was the Saudi Russia issue at the time. I believe the lowest Brent went was about 16, even when WTI was negative (is that right? that's what my chart is showing for Brent front month, please correct me if I'm mistaken). US is not eager to shut down because it has major economic implications. China and some other countries made good progress, so it's hard to imagine that the world will totally shut down again. Wearing face masks appears to have a significant impact on the virus spread, but people haven't even been following those basic guidelines so I think there are paths for improvement, choices that can be made. Already we're seeing mask requirements. There is a good chance the kinks are being worked out and the rise of covid numbers are going to be reduced significantly. It reminds me of a hand injury where one is eager to start back up and does it too quickly, in the process injuring the hand again, or something that is a work in progress and being figured out and understood, but to go to those low price level seem unlikely.

Some kind of war with Iran is not far fetched. Trump is behind on the polls, and from what Bolton reported, which was likely accurate, Trump will try to do whatever he can to get reelected. It's not going to be rational or ethical, but that's who we're dealing with. In my opinion we're dealing with a Hitler like mentality. I think it's roughly 25% chance of some kind of war before the election, 50% might be too high on second thought, but 5% is way too low.
 
How likely do you think that SPY will trade 250.00 again? (Which would be a 20% decline and well within the established 2020 trading range to date)

Sequoia1321 said:
Crude back in the 20's seems far fetched. Wasn't it shutdown when it reached those levels? Also there was the Saudi Russia issue at the time. I believe the lowest Brent went was about 16, even when WTI was negative (is that right? that's what my chart is showing for Brent front month, please correct me if I'm mistaken). US is not eager to shut down because it has major economic implications. China and some other countries made good progress, so it's hard to imagine that the world will totally shut down again. Wearing face masks appears to have a significant impact on the virus spread, but people haven't even been following those basic guidelines so I think there are paths for improvement, choices that can be made. Already we're seeing mask requirements. There is a good chance the kinks are being worked out and the rise of covid numbers are going to be reduced significantly. It reminds me of a hand injury where one is eager to start back up and does it too quickly, in the process injuring the hand again, or something that is a work in progress and being figured out and understood, but to go to those low price level seem unlikely.

Some kind of war with Iran is not far fetched. Trump is behind on the polls, and from what Bolton reported, which was likely accurate, Trump will try to do whatever he can to get reelected. It's not going to be rational or ethical, but that's who we're dealing with. In my opinion we're dealing with a Hitler like mentality. I think it's roughly 25% chance of some kind of war before the election, 50% might be too high on second thought, but 5% is way too low.
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professional writers and speakers think this way:
price has been breaking resistance lines after resistance lines.
we should buy more and more.
if price breaks 43.09 level, buy even more oil !!!


professional traders think this way:
price has risen since mid Apr.
let me unload some of my long position.
 
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bone said:
How likely do you think that SPY will trade 250.00 again? (Which would be a 20% decline and well within the established 2020 trading range to date)
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I don't know. You're more the pro. What's your opinion? Personally I'm surprised it's so high, not very far from record highs. We're in the middle of a pandemic, major economic issues, doesn't make sense. Just demand for stocks I guess. Seems very strong for what it is. But SPY and oil aren't necessarily totally in synch. When WTI went negative people weren't driving, air pollution had even reduced. I'm having a difficult time seeing that scenario again. And when things recover, assuming they do, let's say a vaccine, seems to me oil will have bigger percentage gains. Maybe I'm looking at the wrong brent chart, because I do sort of recall hearing it went to zero at one point, but don't remember, wasn't following brent at the time, and my current chart only shows 16 as the low:

Brent last day financial futures, continuous:

https://www.tradingview.com/x/Ejv0UZR6/

Either way, I'm more of an investor on oil than a trader. Most of the time I tried to get trader with it I got surprised and lost money, so now I'm just going to hold I guess.
 
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