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Playing & Trading Strategy

bsbbthn: Please read what I was trying to say before my beat-down...{More-->}

Posted by: NeilSite_VanThomas on May 29, 18:07 in response to bsbbtnh's post Sorry to hear about that

Regarding WTI (U.S. crude oil futures) and RBOB (Unleaded Gasoline futures) there are oil bulls & oil bears:

Oil bulls DO support the U.S. oil sector, which, as a Liberal, I support. After all, I do live in Texas. As a matter of fact, I believe the U.S. should be pumping at full capacity. Obviously, due to COVID-19, many oil & gas rigs have gone off-line. But I'm proud of their efforts--in the past few years, USA has surpassed both Saudia Arabia and Russia to become the world's #1 producer of oil. We are now a net exporter of petroleum, and most of that is because of the shale industry from America's largest oil field--the Permian Basin of West Texas.

However, as traders, oil bulls tend to ignore market fundamentals 100%, and just pick whatever headlines supports their narrative. They ignore weekly inventory reports, weekly unemployment numbers, the GDP, monthly jobs data, and so on. They exist in a selfish, greed-inflicted world where consumers don't matter, as the laws of supply vs. demand that govern every other commodity cease to exist in their gluttonous minds.

You see, rising oil prices ARE good for U.S. oil folks, but also bad for U.S. consumers. So, less than 1% of our population are in the oil sector, yet this affects prices of gasoline, airline ticket prices (jet fuel), food prices, and so on. 

And...rising oil prices supports OPEC+ which is an actual cartel, let by Saudi Arabia--the country that brought us 9/11 and I could literally go on and on about KSA. It also helps Russia (the "+" in OPEC+) as well as Kuwaitis and Emirates get richer off the backs of middle-class Americans who are struggling amid the pandemic.

But oil markets are a double-edged sword: Oil bears are great for the U.S. economy as a whole, but also bad for the U.S. oil sector. They require insane amounts of money to keep going. But, oil bears also get to "stick it" to OPEC! With WTI & RBOB, I tend to be an oil bear. I have been trading them since 2008, and commodities in general since 2000.

So, in closing, oil prices have come up from approx. -$40/barrel to nearly $36/bbl in just over 1 month. In fact, oil markets have just seen their best-performing month ever. Yet, 41 million Americans are unemployed, GDP is down 5%, many retail businesses are bankrupt, places of worship, theme parks, public schools, colleges & Universities, stadiums, and so on are either still closed or very limited capacity. Airlines have flights, but demand for jet fuel is extremely low as government stockpile reports we are at near-record high levels.

But, hey! Beaches are open! People are driving to get their hair cut! And...this is an election year! Oil bulls don't want to let tRump lose in November! So, they created a fake rally based on F.O.M.O. (Fear Of Missing Out) and guess who profits the most? Saudis. Russians. Kuwaitis. Emirates. Smh.





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