Doing what, puts? Short ETF’s?
x2 In for story
Taking guesses on how low oil can go. I said it back in October it could easily go below $75 a barrel. Didn’t think it would be sub $60 this quickly. Way to much supply no where near enough demand. It’s blowing past breakevens for a lot of countries it’s even too expensive for fracking now. Permits are now dropping rapidly. Where is the bottom? I’m saying sub $40 barrels in 2015.
I think we won’t see much under $40… OPEC is being tested and they’ll lose this game of chicken and stop the flow somewhere around there.
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oh… and should I buy XOM now, or wait a bit?
I was thinking the same thing… I was saying I’d get in at $90… but now it’s at $86… I’m thinking about writing a put or two @ $80 Feb15… and if I get in at that… that’s a pretty danm good price for XOM
OPEC announced last week they aren’t cutting supply. What are they going to do? Tell one country to cut supply that is dependent on oil exports… That won’t happen.
Buying XOM might depend on whether you think a broad correction is coming and/or if the broad market looks toppy to you.
2 years up with minimal resistance, though we did have that big dip a few months ago. I don’t want to suggest fighting the trend but a correction doesn’t seem out of the question up here. A wild card…gas prices went down so there could in theory be more disposable income out there for Xmas spending etc…
Commercial hedging is still on the way up with crude, I agree that the $40 level will be VERY interesting to watch. I also agree that this game of chicken is likely to backfire on OPEC.
What do yall think about BP?
I feel like this thought process is flawed, those were dollars already going back into the economy. Even if people take every penny they save at the pumps and go out and spend it; consumption hasnt increased. Those dollars would have been spent anyway at the pump. Health insurance costs have been increasing so much any extra money in the consumers pockets will probably be directed at that as well. Or the people saving at the pumps will actually do something smart and save that money which in turn would be a drag on the economy.
I see what you’re saying and have thought of that angle as well. My thought process here was…
Natural resources bought at the pump were almost certainly imported. Using your example of shifting spending to healthcare, that would flush money into our domestic service sector. There are countless factors to consider, up to and including the petrodollar. Just tossing some thoughts out, that’s all.
Now that consumers are not spending as much on fuel DC is already talking about higher taxes on fuel. I guess if the money is not helping OPEC the government doesn’t want any (small) business getting your money.
really? I expect Q4 numbers to be up at lot YOY.
long $BP @$35 today
6.4% Div Yield will be nice… I can’t see oil dropping to much lower… I think $35 was a very good price to get in at
What he’s saying is that money spent is money spent.
Let’s say you typically spend $200/month on gas when it’s $3.50/gallon. Now maybe you’re saving $50/month due to price decrease, so you only spend $150 on gas. You now have an extra $50 burning a hole in your pocket and so you take that $50 and you buy Little Johnny a $50 toy for Xmas. The end result is the same, $200 spent. Doesn’t matter what industry it goes towards. It’s $200 spent and pushed into the “Economy”.
Seems a bit narrow sighted…
yeah that’s a whole other argument…
All you are doing is shifting the $$$'s from one thing to another. Its not like our wages increased and there are more $$$ in the system, its not that tricky to understand. Unless you think people are driving more because of cheaper gas? It hasnt changed my routine at all so if anything I have extra dollars in my pocket. At that point less $$$ are being spent in the economy.
Sorry I didn’t keep reading the comments, this was cleared up with a much better explanation than mine.
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I appreciate it too man… there are a million ways to look at things. But I do know that we produced about 50% of our own oil. I think we consume about 18 million barrels a day and produce 9 million. Those numbers could be a bit off but eventually I think the US would like to be an exporter of oil.
We have been looking a lot at going long on the dollar and riding this strength, any announcements from the ECB would likely strengthen it further and with what Japan is doing to the yen right now it seems like a no brainer.
anybody else playing with robinhood? https://robinhood.com/
I just got off the waitlist and am waiting for the final approval. looks like a really cool way do lots of $0 trades
I thought about it but in general, the less fees a brokerage has, the more pricky they are with margin calls. I got burned by my last discount brokerage for thousands because they liquidated my whole account when I fell 50 cents below the maintenance requirement mid-day, right before a reversal that I knew was coming. Now I just suck it up and pay the $10 a trade at etrade.