FXedu

Why Oil Will Head Higher

Tell Jim Rogers that. He's buying up oil because its fallen below production costs. Therefore he (and I) both know that it has to eventually go up and the at the 30-40 dollar a barrel oil will likely be the bottoming region and that we'll trade sideways for a while in a volatile range and eventually take out new highs again into a new oil rally.

By the way, in the last 7 days, guess what stocks went up the most? Transportation stocks. That's typical when the big institutional investors feel that an economic recovery is 6 months away...they buy up the transports and technology stocks. Well you buy transport stocks just ahead of an increasing demand that is preceived about 6 months down the road. That pick up in demand will stabilize oil and eventually drive it higher. These institutions buy it now while the prices are low and all of the retail investors are scared to touch it. For when it is obvious that the economy is recovering, the great discounted prices will already be gone. Thus the retail investor is always late to the ball game.


On Jan 06 04:59 PM xom-only wrote:

> way too soon to go long oil unless you are betting on a war disruption.
> this recent runup started with the isreal hamas agreement not being
> resigned, when the intrusion is dated the price of oil and oil stocks
> will drop back to december lows. my opine