Has oil topped out?
OPEC cuts supply and the price barely moves. Is now a good time to short oil?
Answers
986 points
jillybeansisme answered 2 years ago …
In my opinion there is no such thing as oil "topping out." I suspect it is merely catching its breath for the next sprint. Weather, politics, stupidity, greed, all get factored in at some point and I just can't see it not going up (although it would be nice to see .65/gallon again!).
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317 points
CG answered 2 years ago …
Depends how nimble you are in trading and how much of a move you need to realize worthwhile profits vis-a-vis the risk.
Oil price should bounce, as the US dollar rise is overdone and due to retrace a bit. I think the US dollar will go higher for awhile thereafter though so I do think oil will soon be lower, I think < $90 and close to $80 if not even much lower.
"Weather, politics, stupidity, greed, all get factored in at some point" which is always true so that's not as material as the demand destruction in the "first world" and the outflow of speculative funds from latecoming bulls getting burned and hedge funds collapsing.
991 points
rvilmur answered 2 years ago …
The obvious answer is yes as a $45 drop certainly makes a top. Will oil go over $147 again? Certainly as inflation and rising demand will again push the price up again. The real question is the time frame for the next rise. High prices did do some reduction in demand and the now lower prices will increase demand. Other factors that you can't time are the weather, political decisions, war, and terrorism.
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4087 points
EthanR answered 2 years ago …
I agree with all of the answers given so far. Looking at the charts of OIH and DIG, they both appear to be turning up from oversold positions. Hurricane Ike could threaten some oil rigs. So as a 1-2 week trade, oil related stocks look good right now. Long term? Let's wait and see what happens.
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