I think oil prices have hit their low - is now a good time to go long?
Answers
2222 points
readytoretire answered 9 months ago …
I agree that they have probably hit the bottom. But the upside is a question of when. Many investors are betting on soon as measured by the future price of oil. And the amount in storage in places like Cushing, and in tankers. So if the price doesn't go up soon, and by quite a bit, there will be more oil coming on the market from these sources. Which would add downward pressure on the price. But long term (1 year plus) oil will be higher.
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678 points
BoxCar answered 9 months ago …
I agree with "ready2.." it looks like a bottom, but its a sidewise bottom "L-shaped"
Do a www.stockcharts.com on OIL an ETF to show that OIL was in "free fall" midOct
to Dec (low Volume) then Volume started back up mid-Dec to a healthy level now.
Count 4 price "spikes" from July highs to midDec- Feienbaums no of Chaos Theory
says before you reach 5th spike things will change and it did, Volume came back.
Now I would count 4 more price spikes oscillating along 20 to 25 before next change
Question is, is it a bottom, will we see next direction to be an UP escalator or Down?
There's a HUGE [Vol. x Price] ledge covering 20 to 25 where it may oscillate awhile.
Again, its a Tug o' War between Supply and Demand to determine where it'll go, but
Google "Scientific American Mar 1998" to read "The End of Cheap Oil" to know
where OIL HAS to go since it'll be the bridge that gets us to the next energy source
that I think will be nuclear. No other clean energy source could possibly replace the
amount of Fossile fuel we consume. Nat.Gas is needed for fertilizer/heating. Also
realize fuel is only half of OIL consumption- Rest of a 43 gal barrel is for plastics, so
if no one buys plastic products for houses & cars, thats the other shoe to drop that
has brought the price of OIL down. When we think OIL we must think products too.
3943 points
MNSL answered 9 months ago …
Factors to watch:
Global deep recession- Specially in UK, USA and Germany
Slow global economic growth
Demand destruction
Less demand for electronics, tyres, leathers, computers, mobile phones and plastics etc globally
Closure of production factories worldwide.
Huge job cuts in production and building sector including mining, packaging, plastic industries etc.
Depressed demand for assets
Less construction
Less Air traffic
Plunging of car, home and boat sales
Plunging of home sales
Wealth destruction
Less confidence
Less production in heavy industries
Reduction in mining product s
Invention of alternatives energy- I think some companies will introduce viable alternative energy sooner than later.
I think it will take at lest 03 years to generate some demands for oil. That also depends on the world economic growth rate.
4075 points
EthanR answered 9 months ago …
You have to trust your gut as an investor. Something is telling you that oil has hit its low. Listen to the opinion of others, but do not let it sway you one way or the other. If you think they have hit their lows, then now is a good time for you to go long. If you still have doubts, then dollar cost average into your position to reduce risk.
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