Why Oil Is A Broken Market Ripe For A Short



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  • Oil is trading at a premium based on historical data points.
  • U.S. supply is beginning to come online again.
  • Increased oil demand Oil for energy demand in the EU is likely only temporary.
  • Global recession risk is rising.
  • The Iran deal is likely to close.

For some time now, I have believed the oil market to be broken, where data is ignored and outdated core beliefs of the market rule. I first took action on this belief on March 15, 2022, when I initiated a short position in WTI crude (CL1:COM) using WisdomTree WTI Oil 3x Short Daily ETP in USD ($3OIS) through a margin product. I have since sized up my position on 13 separate occasions. I don’t usually disclose my position in such detail, but I believe such a controversial issue must be read with disclosures in mind.

Before diving in, I need to clarify that this article will focus on WTI crude prices, and any reference to oil price uses the price of crude.

For ease of reading, this article will be broken into seven separate points:

  1. Oil is trading at a premium based on historical data points
  2. U.S. supply is beginning to come online again
  3. Global recession risk is rising
  4. Increased oil demand for energy in the EU is likely only temporary
  5. The Iran deal is likely to close
  6. Russian oil is still flowing
  7. Conclusion and risks to thesis

Excel Source Documents

  1. 01-04-1985_to_08-05-2022_Weekly_Analysis_of_U.S._Crude_Oil_Stockpile_Days_Versus_Futures_Price.xlsx
  2. 1972_-_2021_Oil_Production_v_consumption_v_population_v_median_annual_price.xlsx
  3. 1983_to_08-08-2022_Weekly_U.S._Field_Production_of_Crude_Oil.xlsx

Disclosure: I/we have a beneficial short position in the shares of CL1:COM either through stock ownership, options, or other derivatives.

Additional disclosure: While I express my opinion in this article, only you can determine if a specific strategy is right for your portfolio. You should always do your own research before buying, selling, or shorting any stock. Any charts, graphs, or tables not specifically credited to another individual, company, or institution were created by the author using his own research.

While I am not directly shorting crude oil, I have invested in a 3x reverse daily ETF using a margin like product that enables me to profit when crude oil decreases in price. This is an incredibly risky method of investing even experienced investors should think hard before initiating.


Daily Market Update 01/07/2020


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Daily Market Update

  • The S&P/ASX 100 ended the day up 26.90 points or approximately 0.55%.
  • The S&P/ASX 200 ended the day up 36.50 points or approximately 0.62%.
  • The S&P/ASX All Ordinaries ended the day up 39.70 points or approximately 0.66%.
  • The S&P/ASX Small Ordinaries ended the day up 40.50 points or approximately 1.56%.
  • The Dow ended the day up 217.08 points or approximately 0.85%.
  • The S&P 500 ended the day up 47.05 points or approximately 1.54%.
  • The NASDAQ ended the day up 184.61 points or approximately 1.87%.
  • Oil Brent ended the day down -1.39% at $41.27 USD/bbl.
  • Gold(Spot) ended the day down -0.54% at $1,774.11 USD/oz.

Daily News Breakdown 30/06/2020


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  • Daily Market Update
    • The S&P/ASX 100 ended the day up 66.60 points or approximately 1.39%.
    • The S&P/ASX 200 ended the day up 82.90 points or approximately 1.43%.
    • The S&P/ASX All Ordinaries ended the day up 85.70 points or approximately 1.45%.
    • The S&P/ASX Small Ordinaries ended the day up 42.70 points or approximately 1.67%.
    • The Dow ended the day up 580.25 points or approximately 2.32%.
    • The S&P 500 ended the day up 44.19 points or approximately 1.47%.
    • The NASDAQ ended the day up 116.93 points or approximately 1.20%.
    • Oil Brent ended the day up 2.02% at $41.85 USD/bbl.
    • Gold(Spot) ended the day down 0.12% at $1,770.70 USD/oz.

Chasing The Elephant Episode 4, Part 1: Risk And The Amazon Story


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  • The fourth episode (part one) of the first podcast exclusive to Seeking Alpha: Chasing the Elephant.
  • Interview with Seeking Alpha Contributor Eric Parnell discussing his analysis of Amazon.
  • Roundtable discussion on Amazon as an investment and the high multiples some companies are currently enjoying and the risks those entail.
  • Featuring Seeking Alpha Contributors Russell Katz (host), Richard Berger, Yale Bock, and Eric Parnell.

To listen to the podcast click here:

Chasing the Elephant Episode One: Let the Fed Eat Cake


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We have released the first episode of the new bi-monthly (fortnightly) exclusive Seeking Alpha podcast! This podcast is the first to be exclusive to Seeking Alpha ever so, please check it out and let me know your thoughts.

  • Interview with Seeking Alpha Contributor Yale Brock on his long pick The Cheese Cake Factory.
  • Roundtable discussion on the upcoming Federal Reserve meeting and the implications of a rise in interest rates.
  • Featuring Seeking Alpha Contributors Yale Bock, Richard Berger, and host Russell Katz.


Seeking Alpha Consolidated Water: The Water Play Of Your Dreams


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By: Russell Katz

Why Water?

As the world changes, so do investment opportunities along with it. What once was abundant and boring is suddenly the catalyst of wars. As investors, it is our duty to be constantly vigilant and willing to change our entire investing strategy if the need arises. I reached this moment of clarity when the price of oil first collapsed. As someone who mostly covered oil and natural gas exploration, I decided to become more opportunistic and stop looking for ideas that kept me living under a rock (first and last shale joke). This led me to come across information regarding the drastic changes our planet faces and may soon consider the new normal. The most startling figure I found was an estimate by the 2030 Water Resource Group, an organization quoted by the UN and other key research publications, that by 2030 the world will be facing a 40% global water deficit unless there is either a drastic increase in supply or a severe decrease in demand. Neither of these scenarios are likely to occur as the vast majority of the world’s water supply comes from rain reliant systems such as rivers, reservoirs, and groundwater systems. Population growth, on the other hand, has eliminated the possibility of any demand decrease. The once effortless and cheap water supply has been stretched to the breaking point forcing countries to consider alternatives.

To read more please go to Consolidated Water: The Water Play Of Your Dreams

Daily News Breakdown 4/15/2017


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  • Daily Market Update
    • The Dow ended the day down 138.61 points or approximately -0.67%.
    • The S&P 500 ended the day down 15.98 points or approximately -0.68%.
    • The NASDAQ ended the day down 31.01 points or approximately -0.53%.
    • Oil ended the day up $0.07 at $52.91 a barrel.
    • Gold ended the day up $12.00 at $1,290.10 (please see article below for more information**)

Recommended further readings:

Wall Street’s fear gauge breaking out as geopolitical jitters mount into long weekend (CNBC)

India Gold Imports Said to Jump 582% on Festival, Wedding Demand (Bloomberg)**

China Takes Crude Crown as Output Lags Behind Rising Demand (Bloomberg)

Could mining asteroids save Earth? (CNBC*)

Health care company Dexcom sees shares slip amid potential competition from Apple (CNBC)

Apple considering teaming up with Foxconn for a multi-billion dollar investment in Toshiba chip unit: NHK (CNBC)

*The above article is paid content however, I do believe the information is important and relevant enough to include.  I am not being compensated for recommending this article.

Everyone Owns a Business — How to $tuff Your Pig

It’s perplexing to me just how many individuals work their tails off for someone else to help them earn a profit, yet fail to devote the time and energy needed to grow their own profit. In my opinion, everyone should run their lives as if they owned a business. Business owners have tremendous knowledge in […]

via Everyone Owns a Business — How to $tuff Your Pig

Quick Oil Update From the Airport


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I had to post this update from my phone due to being in the airport so please pardon the grammar.  Oil prices climbed over 8% today due to the inverse relationship with the United States dollar.  The US dollar slid towards the end of the trading day.  Keep in mind that oil inventories climbed by 7.79 million last week to the highest US inventory glut since 1930.

For more information click here.