Just Where is Oil Going?
Well today WTI hit a high of slightly over 76 dollars a barrel. It may inch slightly higher to possibly 80 or 82 but it isn't likely to go to much further. If it does there are going to be some nasty repercussions in the economy if it stays there too long. I don't see this happening with central banks controlling the game.
I am looking to go short in this area. Short for a nice move down. This is where your risk to reward becomes much better to the downside. Is it headed to 100. Well time will tell but I strongly doubt it. It will bounce around here in this area blowing out the shorts and longs but when it finishes we should see oil move down to the 65 to 60 area. So all in all this is the area to be looking short and not following the talking heads who think we are about to enter into another bull oil market as of course supply is far less than demand.
I see "The Donald" is crowing from his perch on high around the OPEC nations taking advantage of the rest of the world.
He's right of course, but he is going to have a very hard time changing the status quo.
We have known for quite some time that the ideal oil mark for the Saudis is 80.00 a barrel. This is the optimal level for most countries too that are engaging in oil exploration, drilling, fracking and tar sands just to name a few. This is what the price is about. Getting people back to work on these oil projects with their high paying salaries and as long as oil hovers around the 65 to 85 mark there is a nice profit for these companies. Of course that comes as at a cost. You and me pay for it at the pumps for one. The other cost is in taking money from other areas that may need the money more to expand operations.
The other big party that is in to Oil being higher regardless of what they tell the public is governments. Higher oil prices mean higher refining prices which mean higher prices you pay at the pumps which means, you got it, more taxes for them. So there are a lot of people that keep oil where it is.
The better question you might want to ask is, "in 50 years hasn't there been any better technology developed in propulsion engineering?"
The answer to that is quite easy and you don't have to be a conspiracy theorist to know it.
The answer is "of course there has been". The big problem is you have to look at how much industry is based on the dirty liquid. To sum it up quickly, there is a pile of industry that has its foundations in oil. Everyone from engine mechanics (who charge 90 to 120 an hour), parts distributors, gas stations by the tens of thousands and the list goes on. The politicians think "what will we do with all those people should oil become a relic".
The answer to that is as simple as how oil came to be popular to begin with. The free market will decide what to do with them. People have adapted for thousands of years to changing environments and they will do so again. However the cartels and the rich oligarchs that have made their fortunes doing well.....nothing are not willing to give up the fun just yet and this is what you are paying for.
So if you want to join me in being patient and waiting for Oil to move to where it should be I encourage you to look short.
My stop is 85 and I am looking for 60. Cheers.
I am looking to go short in this area. Short for a nice move down. This is where your risk to reward becomes much better to the downside. Is it headed to 100. Well time will tell but I strongly doubt it. It will bounce around here in this area blowing out the shorts and longs but when it finishes we should see oil move down to the 65 to 60 area. So all in all this is the area to be looking short and not following the talking heads who think we are about to enter into another bull oil market as of course supply is far less than demand.
I see "The Donald" is crowing from his perch on high around the OPEC nations taking advantage of the rest of the world.
He's right of course, but he is going to have a very hard time changing the status quo.
We have known for quite some time that the ideal oil mark for the Saudis is 80.00 a barrel. This is the optimal level for most countries too that are engaging in oil exploration, drilling, fracking and tar sands just to name a few. This is what the price is about. Getting people back to work on these oil projects with their high paying salaries and as long as oil hovers around the 65 to 85 mark there is a nice profit for these companies. Of course that comes as at a cost. You and me pay for it at the pumps for one. The other cost is in taking money from other areas that may need the money more to expand operations.
The other big party that is in to Oil being higher regardless of what they tell the public is governments. Higher oil prices mean higher refining prices which mean higher prices you pay at the pumps which means, you got it, more taxes for them. So there are a lot of people that keep oil where it is.
The better question you might want to ask is, "in 50 years hasn't there been any better technology developed in propulsion engineering?"
The answer to that is quite easy and you don't have to be a conspiracy theorist to know it.
The answer is "of course there has been". The big problem is you have to look at how much industry is based on the dirty liquid. To sum it up quickly, there is a pile of industry that has its foundations in oil. Everyone from engine mechanics (who charge 90 to 120 an hour), parts distributors, gas stations by the tens of thousands and the list goes on. The politicians think "what will we do with all those people should oil become a relic".
The answer to that is as simple as how oil came to be popular to begin with. The free market will decide what to do with them. People have adapted for thousands of years to changing environments and they will do so again. However the cartels and the rich oligarchs that have made their fortunes doing well.....nothing are not willing to give up the fun just yet and this is what you are paying for.
So if you want to join me in being patient and waiting for Oil to move to where it should be I encourage you to look short.
My stop is 85 and I am looking for 60. Cheers.
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