Oil is below $34 a barrel - is it time to buy more?
 

Oil is below $34 a barrel - is it time to buy more?

Prices are going up every day here for the last 2 weeks or so...

it's time!

I am watching DIG and DBO. I am holding a good amount now. I am going to add a little at these levels but I am really waiting for it to crack below 30.

It better go up, my HOU stock is in the toilet

Yes, if you know what you're doing. No, if you don't.

can't go wrong with buying some now, when the economy recovers will make significant profits :thumbsup

aight, I'm gonna buy 50% more.

oil will rocket in price at the first whiff of job growth.

It's dipped to this level before. Regardless, it may be a good bet to buy at this and lower levels. Prices will be pushed up by inflationary pressures caused by all the bailout/stimulus money being rolled out by many governments. More money printed + same amount of goods = price of goods goes up. Just my 2 cents.

Yes, it's time to buy! My suggestion is to drain your swimming pool of water, and fill it up with light sweet crude. You'll be the envy of your neighbors.

Yes indeed. Thats why I have been accumulating at this level for some time now. If it cracks below 30 I am going to dive in heavy.

If it goes a bit further and you know what you're doing then dive in. I just wish the damn price of gas would stop going up again - don't know where everybody else is at but in Miami it's already at 2.35 in some places again and it was at an all time low of 1.65 just a month ago :mad:...people will have to garage their Hummers again

buy?
oil options or futures?

The difference in the price between gasoline and oil is due to refining costs and the different demand curve for gasoline.

Yeah, it's pretty bad here in the Philippines as well. Gasoline is ratcheting up every week even as oil goes down.

Then refining costs have gone WAY up in 7 months because the gap in inconsistent.

How is oil up 10% today and USO is down 2%? I was right- oil went up, but I would have bought USO instead of futures so I would have lost. I thought they moved up and down in very close tandem with each other...?

Like I stated above, never invest in things you do not fully understand.

"Here are the current prices for oil contracts with expirations in the next six months. Notice how every contract is more expensive than the one that preceded it. USO follows a simple strategy of buying the current contract and then rolling into the next contract before the current one expires.

March 2009 - $40.42

April 2009 - $46.22

May 2009 - $48.88

June 2009 - $50.45

July 2009 - $51.28

August 2009 - $52.70

Source:NYMEX. Data as of 2/9/08.

Until last Friday, USO owned the March 2009 contract. Specifically, it owned 84,378 March contracts, entitling it to 84.4 million barrels of oil.

But on Friday, it sold all those contracts and bought the April contract instead. But because the April contract cost $6/barrel more than the March contract, it couldn't afford as many contracts. In fact, if you exclude new inflows into the fund, it could only buy 73,444 April contracts.

Whammo presto, the holders of USO lost 13.4% of their exposure to crude oil. They now control less oil. If the spot price stays near $40/barrel, the value of those April contracts will decay back to $40/barrel over the next month and investors will lose their shirts. If the price of oil jumps 15% in the next month—before USO rolls again into the May contract—investors will only break even."

source: http://biz.yahoo.com/indexuniverse/0...2_id.html?.v=3

I already have some but your comment, and the person who agreed with you, are big reasons I didn't go buy more yesterday evening. I guess if USO was up 10% today I would be calling you guys names but it seems it worked out ;)

Thanks for the explanation. I'll check it out when I get home.

I think I'll switch it all to USL tomorrow.