Crude oil going up - long uwti

Crude oil going to $55-60 per barrel at some point. I dunno if that will be next month, or 12 months from now, but it’s happening, and I’m long uwti @ $1.27 and holding until I see oil in that range somewhere. my last call was dwti (the levered short twin) and that worked out great - just had to exercise some restraint and sell early before it crashed and went the other way. In hindsight, I could have spent a lot more time short, but didn’t want the risk and didn’t want to lose money.

The point of this story - if you’re not looking at oil as really cheap right now, you’re missing out on a great opportunity.

I agree that oil will go back up (probably back to around $70) but I don’t have the faintest idea when (probably when Putin is ousted). So it seems we’re of similar thinking, at least directionally.

With that in mind, why in the world are you buying a 3x ETF when you admit you may have to hold it for 12 months before oil reaches your price target? You’ll get fracked right in the rosebud if you hold on to UWTI for that long even if you are right.

Why not buy oil stocks that are on the cheap right now? Hold on to them for a year and I bet you’ll be in pretty good shape. Plus, many kick off a nice yield so at least you have that to fall back on.

Been watching and waiting all year, but I want to see low 30s before I buy. Something needs to give…

Mainly because I think the levered fund will outperform the oil stocks in that time. Also I really don’t like most of their balance sheets, particularly the oil sands guys. I already crushed it on DWTI, so now I’m gonna turn around and do the same on UWTI. I will admit tho, I was EXTREMELY lucky the way I played DWTI - I jumped in and out several times, and even pulled off one sell trade for $236.50 - by pure dumb luck, this was the highest price it ever traded at. Why am I telling you this? just revealing that I’ve got a bit of overconfidence bias going on this thing, and I’m liking the outcome so far. Admitedly, the volatility is tough to stomach, but for all the shit these leveraged funds get, if you’ve got a solid directional bet, you can clean up pretty good - much better than just a long or short on broader oil fund, in my opinion, though I’ll grant you the volatility is stupid high, particularly in the last few weeks

I don’t think it’ll get there, here’s an exerpt from some analysts at scotia mcleod:

“We don’t expect oil prices to recover to mid‐2014 levels in the near‐ or medium‐term, but we also don’t expect prices to languish for an extended period in the current mid‐US$40s either. Should current industry trends prevail (i.e. lower spending, lower drilling activity), we believe oil prices could recover to the US$55‐US$60 range over the next 12 months.” the report has a lot more about US investment in oil drill operations slowing down as well with charts and what not. You’re going to see a lot lower rig counts coming out of US in the coming weeks. I highly doubt you’ll see oil back in the 30s, even with the iran nuclear deal passing

Sure, every talking head has a different number, maybe it doesn’t go into low 30s. But I do not do less than 20% allocations, so it’s stupid crazy low or nothing.

wow 20%? I’m only doing 5% myself, but if it dropped that low, I would be tempted to get on board at that level too. well, your call I guess.

oil still has room to fall, i wouldnt buy yet. gotta get than big discount like PA says

my calls - current call is staying bull:

Start Date Name Call Open Rate End Date Chg. % 2/9/2015 Crude Oil bull 45.46 3.87% 1/9/2015 Crude Oil bear 46.02 02-09-15 @ 45.38 1.39% 27-08-15 Crude Oil bull 40.87 01-09-15 @ 46.20 13.04% 21-08-15 Crude Oil bear 40.22 26-08-15 @ 39.09 2.81% 24-07-15 Crude Oil bear 47.97 21-08-15 @ 40.19 16.22%

sorry bout the format, it’s not working out for posting properly

sorry bout the format, it’s not working out for posting properly

Anyone who stuck with this trade is rolling in it now. oil’s going to $60+ within a year, so make some plays people. UWTI is paying off so far, up 7%, though I would have liked more - My buy timing was not ideal (oil was just under $47 per barrel when I did my uwti trade, and it’s now at 49.50, after weeks of me being down).

Still not buying, seems like this needs more time. At $35 I’ll start buying, otherwise a pass.

margin of safety homie.

So of course there is the well known story of over supply influenced by highly leveraged companies trying to stay afloat coupled with demand worries… as well as possible new Iranian supply… and probably other nuances that I have not had time to read up on. Basically we have a black box of supply and demand issues. However the third variable on the table, the strength of the dollar, is less of an enigma. I am under the impression that we can be quite sure it will maintain it’s stength or get stronger. Nailing down this variable, can we put an upside cap on how high oil could be expected to go?


All I know is that when a barrel of oil for most producers costs more than $40 to produce, on an all-in cost basis. the marginal costs, to be sure, are much lower. Here’s the best source I’ve been able to find: In this document, the 2014 marginal cost for a Canadian oil sands barrel is $90, but I’ve seen the all in cost quoted at $70, so I guess there’s disputes around it. Also, the breakeven costs they’re showing on this site seem pretty dramatic (cheapest being $60 for Qatar to 150 for Venezula) , especially considering how low they’re showing the marginal costs as. Still, at $48 per barrel, some players are going to, and have already dropped. I know this too - we’re in the 5th consecutive week of lower active rigs in the rig counts, production keeps dropping (although inventories are still mixed, but generally rising), and Russia is doing some shennanigans in the middle east, including negotiating production agreements, and blowing shit up in Syria. The bottom line is that prices in the $40-$50 range aren’t sustainable and must go up eventually, but I will admit that I don’t know by how much. My personal approach for this trade: hold it until I see a $60 barrel, or it’s been a year - whichever comes first.

Right, the prices aren’t sustainable for the high-cost producers , which is exactly why the Middle East ($24/bbl cost) are holding prices low, and need to continue to do so, until the losers exit. I see this continuing well into 2016, if I were the Middle East I certainly would not let up pressure now, when I’m winning market share. Keep hammering away at shale till they cry.

North America – $60/bbl

Russia – $26/bbl

Middle East – $24/bbl

^ that’s a pretty good article. and I agree, the middle east will not let up, but the US will, and certainly oil sands will. still banking on a $60 barrel within a year.

WTI $38.xx now.

At some point these CL Mar '16 $30 short puts are going to be priced right. Maybe we’ll get some weird vol during the rate hike week and I can sell some of these puppies?

Oil is going low guys. This isn’t even close to resolved, we need people going outta business, and they won’t do that until they get beat senseless with low prices for a long time.