Three of the best known commodity investors are bullish on oil at this very moment. They all have talked about oil recently and it seems that both Marc Faber and Jim Rogers are holding oil, and Boone Pickens while still licking his wounds from the losses at his BP Capital hedge fund is talking oil up even if he is staying on the sidelines. Boone Pickens said this week that "oil prices in the 40 a dollar barrel are not going to last much longer."
Marc Faber said to CNBC that "I would say, the long-term demand for oil is there. The supply won't be there. So, long-term, I think the price will be much higher than it is today" while Jim Rogers said something very similar, "Oil Reserves are dropping 7% a year and these drop in reserves will cause serious supply problems in the near future." Jim Rogers concludes "Oil will make a big comeback."
Long term, they are all optimistic about rising oil prices and they have been quite accurate in their long term projections over the years. But with this crazy Contango and steep Forward Curve is very, very expensive to hold oil and wait for a rise. The market is just too expensive to Buy and Hold.
So the big question is: Is oil going to rise so much that it pays this huge Contango or should we short forward oil and get paid big time just for waiting?
Disclosure: no positions