VBIN's oil stock thread.

[EricL]

(03-05-2021, 02:22 PM)EricL Wrote:

(03-05-2021, 01:48 PM)vbin Wrote: Reading that oil rally just started, quants and CTAs yet to buy in.

I agree. The sector is still hated, and the draws from storage haven't even really kicked in yet.

Just wait till this summer when we have COVID pretty much in the rear-view mirror and demand returns to historical levels.

If OPEC keeps their word on production, the draws will be impressive.

Crude went from $60 to $150 in 18 months back in 2007 and 2008 and from $80 to $115 in eight months from 2010-2011. I don't see any reason why that can't happen again this year as the world recovers from the pandemic and governments print money like there's no tomorrow.

I will just add that if/when crude breaks $100 it will be time to start being careful on the overall market. $150 will pop the credit bubble again, just like in 2008. There's too much leverage in the system, it can't handle the higher costs associated with those types of energy prices.