Crude oil prices turned lower as the long-time oil bull, formally known as the "oil god,” threw in the towel on his largest Astenbeck Capital Management LLC commodity fund. Not only did he close the fund, he shook his bullish followers with a blasphemous statement that oil may be stuck around $50 a barrel or lower, I guess, forever. Yet, is this former oil deity, who has been brought back down to mere mortal status, getting out when it is really time to get in?
Crude oil prices cap off their best monthly gain since April of 2016 as geopolitical risk is rising in Venezuela and a report from the Energy Information Administration(EIA) is saying that we are not producing as much oil as we thought we were.
Crude oil prices must find new balance as global oil stock piles are falling against surging global demand and an increasing amount of geopolitical risk. Russia and Venezuela are the hot issues, with Iran and North Korea lurking in the background.
Crude oil prices are on the rise as Saudi Arabia pledges to reduce oil exports and the fact that U.S. shale pains are becoming more obvious to the market. Halliburton is warning that the U.S. oil rig count is about to plateau or "peak shale,” which we predicted.
For oil and the markets, Russia is all the rage. There is the big OPEC/non-OPEC pow-wow in Russia and reports that Special Prosecutor Robert Mueller is opening an investigation into President Donald Trump's business transactions with Russia one day after the President said that that would be a red-line for him.
Believe it or not the globe is headed for an oil shortage. I know many find that hard to believe, especially in this shale-crazed world where there is the belief that shale oil will fill all voids, even as investment in oil exploration falls to the lowest level since the 1940s.
While the shale revolution has President Donald Trump not only declaring our future energy independence, he is also declaring a new era of energy dominance. The reason is shale oil, along with other breakthroughs in technology. Now that the government won’t get in the way, we must access the best way to get there.
In options trading, a straddle is literally a sit-on-the-fence strategy. By purchasing a put and a call at the same strike (price of underlying commodity) for the same time period, an investor isn’t making a conventional directional bet; rather the investor is looking for a big move either up or down. The rub is that the big move must be greater than the sum of the two option premia or the bet goes south. But that is in the nature of the trade.