Sriracha
I said I never would. But, I may have to buy some USO (United States Oil fund) tomorrow.
Has to be the 1980's since oil was this cheap.
Pipeline and Railroad across the Berring Strait: Bye bye middle east quagmires. Bye bye 23ft/gal super tankers polluting the world. Add a highway to that. Then we can drive to Asia, Europe and Africa. Road trip heaven!
Quote 0 0
beebee
Yes truly amazing!
Ive never bought or owned stocks before.
Can you pls explain for us dweeps who might be interested in doing the same to keep our heads above water, how best to go about doing this and what the minimum investment is?

Thanx!

🐝
We will not win fighting what we hate but by saving what we love.

Keep Calm and Carry On 👍


Quote 0 0
Sriracha
beebee wrote:
Yes truly amazing!
Ive never bought or owned stocks before.
Can you pls explain for us dweeps who might be interested in doing the same to keep our heads above water, how best to go about doing this and what the minimum investment is?

Thanx!

🐝


Cheapest, easiest way I can think of for newbies to do it is download Robinhood to your phone and use it for no fee trading. It has an options trading option. But, WARNING! Trading options is straight up gambling. Unless you take some classes I would stick to buying stocks or ETFs like S&P (SPX), Dow (DIA), Nasdaq (QQQ), etc. To invest in oil I will buy USO b/c commodities are out of my wheel house. Not usually something I play with. But, oil will eventually come back in price. So, can't resist this opportunity. 

Here is the 1 year chart for USO

USO1year.jpg 
Pipeline and Railroad across the Berring Strait: Bye bye middle east quagmires. Bye bye 23ft/gal super tankers polluting the world. Add a highway to that. Then we can drive to Asia, Europe and Africa. Road trip heaven!
Quote 1 0
Sriracha
Might want to hold off until May 5th to buy USO though. It currently holds 20% of WTI contracts and that rolls over in early may. So, it may go down even more in the very short term.
Pipeline and Railroad across the Berring Strait: Bye bye middle east quagmires. Bye bye 23ft/gal super tankers polluting the world. Add a highway to that. Then we can drive to Asia, Europe and Africa. Road trip heaven!
Quote 1 0
Fire With Fire
Be careful with petroleum as an investment.  It has been a rigged market, overtly, for almost a century.  The first control over the problem of oil overproduction was imposed by the Texas Railroad Commission:




Quote:
Established by the Texas Legislature in 1891, it is the state's oldest regulatory agency and began as part of the Efficiency Movement of the Progressive Era. From the 1930s to the 1960s it largely set world oil prices, but was displaced by OPEC (Organization of Petroleum Exporting Countries) after 1973. In 1984, the federal government took over transportation regulation for railroads, trucking and buses, but the Railroad Commission kept its name. With an annual budget of $79 million, it now focuses entirely on oil, gas, mining, propane, and pipelines, setting allocations for production each month.[2][3]



The problem with this industry has always been too much oil, rather than too little.  For the last two decades, I have engaged in several internet debates with fellow lefties about "peak oil" -- the undeniable reality that the planet is finite and therefore fossil fuels are finite and at some point humanity will use up so much of it that it becomes too expensive to extract the dwindling remainder.  My point remains that we might hit Peak Oil tomorrow, but there is no evidence of that -- zilch, nada, nothing -- yet. 

In the 1930s, as the Depression reduced some demand for petroleum products like gasoline, the supply of oil available kept growing as new oil fields were coming into production all over the world.  As the very best proof that money and socialism are very old friends, the Texas Railroad Commission somehow managed to assert jurisdiction over every Texas oil well, tyrannically dictating how much oil you could pump out of "your" well.  It was called pro-rationing and the Commission would announce what percentage of capacity was allowed each month.  As new fields started producing in other parts of the world, the commission would lower the quota for Texas wells to keep supply in balance with demand, and the profits rolled in for decades as Texas became headquarters for several of the biggest petroleum corporations in the world.

Eventually, Saudi Arabia's ability to flood the market overwhelmed the Texas Railroad Commission, and the price setting mechanism shifted to OPEC in the 1970s.  All the price fluctuations over this past half century have been due to attempts to break the Saudi control of supply and the countermeasures taken by the Saudis and their various allies.

The current collapse is yet another perfect storm of unrelated global developments.  The Russians are undercutting the rigged pricing mechanism, challenging OPEC to a price war.  And, out of nowhere came the virus to collapse the demand for oil all over the world.

The first and most obvious result of this collapse is the end of fracking, one can hope forever.  That will have very little effect of the price of a barrel of crude oil for the foreseeable future.  And if it were only one or the other of the crises facing the industry, I would keep my yap shut about where the price of oil would go next.  But the combination of a supply glut and a demand collapse of unprecedented proportions makes all standard investment strategies moot at best.

Eventually, the price of oil will rebound.  Inflation will almost certainly raise the nominal price, but that only gives you a hedge against inflation and it does not deliver any positive return.  I could easily be wrong about my specific guess about The Office going the way of knee britches, but there will be major realignments of business, cashflows, social patterns and life style.  I don't see how any particular change forced by this economic shutdown will lead to MORE energy use.  The low price of oil will make a theoretical incentive to burn more of the shit, but I do not think many economic players in this strange new world will place their bets on low prices for oil lasting forever.

On the other hand, the floor for the price of oil is what the Texas oil men called, "The Lifting Cost."  -- the amount of money it takes to get a barrel of crude out of the ground.  When OPEC originally drove the price past $20 per barrell, the Texas oil industry had a renaissance as the lifting cost in the Permian Basin was right at $20 per barrel.  World events roiled and the price dove again in the latter half of the Reagan years and a Depression hit Midland and Odessa.  I have no idea what 21st century technology has done for the relative lifting costs, but I am sure that the Saudis can drive it even lower if they choose to shut down the Russian competition.

In short, there are never any sure things.  And right now the only sure thing is more surprises to come.  Be careful.


Caveat:  I do not make investments of any kind and I have been "hoarding cash" with the small amount of my wife's retirement money.  I am watching helplessly as my own retirement accounts are tied up in huge multi-employer funds.  I expect to wind up like an Eastern Airline pilot who thought he had a pension.
Quote 1 0
Sriracha
Thanks for this FWF. Great information!
Commodities have never been my area of expertise in the market. I'm an options trader. Looks like USO has a little lower to go. But, for a long term buy and hold I think this will be the ticket. Oil may not ever get back to the prices we saw under Shrub. But, it will certainly bounce back from these lows. 
Hopefully this will be the end of the fracking racket forever.
Pipeline and Railroad across the Berring Strait: Bye bye middle east quagmires. Bye bye 23ft/gal super tankers polluting the world. Add a highway to that. Then we can drive to Asia, Europe and Africa. Road trip heaven!
Quote 1 0