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Tag Archives: United States

Why Oil Is A Broken Market Ripe For A Short

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Posted by Russell in Commentary, Macro Analysis

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Tags

China, Crude Oil, Equities, European Union, Finance, Global Recession, Iran, Iran Nuclear Deal, News, Oil, Oil Production, Oil Short, Recession, Russia, Short, Short Oil, Stocks, United States, WTI Crude Oil

Summary:

  • 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For some time now, I have believed the oil market to be broken, where data is ignored and outdated core beliefs of the market rule.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
Click here to read the rest on Seeking Alpha

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.

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Chasing the Elephant Episode One: Let the Fed Eat Cake

21 Saturday Oct 2017

Posted by Russell in Individual Equity Analysis

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Tags

Cake, Cheese Cake Factory, China, Economy, Equities, Fed, Federal Reserve, Finance, Interest, Interest Rates, Janet Yellen, Money, News, Stocks, Trump, United States, US

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.

https://seekingalpha.com/article/4115130-chasing-elephant-episode-one-let-fed-eat-cake

Quick Oil Update From the Airport

04 Thursday Feb 2016

Posted by Russell in Commentary

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Tags

Dollar, Oil, United States, USD

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.

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