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Are CL futures a good buy right now?


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Are CL futures a good buy right now?

  #1 (permalink)
 JaysonArcher 
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What do you think about long CL? Heard lots of news recently about a boycott on Russian Oil that could send the price of crude to $200. With massive uncertainty in the world right now, all commodities are going up since they are real stores of value. I am planning to wait for it to dip down into possibly the 110-115 range, and place a buy contract, and will swing it? Anyone currently trading CL or other commodities?

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  #2 (permalink)
 
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 vmodus 
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JaysonArcher View Post
What do you think about long CL? Heard lots of news recently about a boycott on Russian Oil that could send the price of crude to $200. With massive uncertainty in the world right now, all commodities are going up since they are real stores of value. I am planning to wait for it to dip down into possibly the 110-115 range, and place a buy contract, and will swing it? Anyone currently trading CL or other commodities?

There is a lot to unravel here. I am not sure I can be much help here, but if you hear it in the news, you are already too late.

If you have not traded CL before, which is challenging on a good day, I suggest not trading at all. If you insist on trading it, you need an entry and exit plan. Jumping into a market with a large trading range as we are seeing is a really bad idea, unless you are just feeling lucky and don't mind having a potential large loss. The daily trading range is crazy and you could be right and still get stopped out (if you are using stops) or a margin call. Then it is game over.

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  #3 (permalink)
 tr8er 
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vmodus View Post
There is a lot to unravel here. I am not sure I can be much help here, but if you hear it in the news, you are already too late.

If you have not traded CL before, which is challenging on a good day, I suggest not trading at all. If you insist on trading it, you need an entry and exit plan. Jumping into a market with a large trading range as we are seeing is a really bad idea, unless you are just feeling lucky and don't mind having a potential large loss. The daily trading range is crazy and you could be right and still get stopped out (if you are using stops) or a margin call. Then it is game over.

Exactly and also keep in mind that Crude Oil rolls any month, so it can also be difficult.

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 bobwest 
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JaysonArcher View Post
What do you think about long CL? Heard lots of news recently about a boycott on Russian Oil that could send the price of crude to $200.

Let me agree with the other posters who said either "no" or "be very careful."

Sure, you could be right. But you are not early, which is one of the things that you need to be if you're basing your decisions on this oil supply type of reasoning. You also need to be ahead of the commercial players in the market, who by definition usually know more than you, or just about anyone else for that matter, since it's their decisions that the market is tracking, basically.

Everyone who reads the news knows that oil is getting tight and will get tighter if/when the Russian market is closed off. So you need to know more about it than that, and to be right when most others are wrong.

I'm not saying don't act on your best understanding of the situation, but I am saying that you do not have a privileged seat from which to view it.

So be very, very careful. The only predictions that make much sense now is that the price of oil will be very volatile. So there is opportunity and risk of loss at the same time. Oil is always a frightening market, now more than usual. But sure, some people will make out well. But probably only a few, and probably the professionals, and not all of them.

Bob.

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 AllSeeker 
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Lot of small traders have their accounts busted by commodities in my know circle, unless you are already doing it for years and know every little thing that goes into keeping track of it, it's a very scary market atm.

It's usually better to stick with a beast that you know when times are tough, rather than jumping on new one that you don't know yet.

Just my pov and 2c.

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 SMCJB 
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JaysonArcher View Post
What do you think about long CL? Heard lots of news recently about a boycott on Russian Oil that could send the price of crude to $200. With massive uncertainty in the world right now, all commodities are going up since they are real stores of value. I am planning to wait for it to dip down into possibly the 110-115 range, and place a buy contract, and will swing it? Anyone currently trading CL or other commodities?

A US ban on importing Russian crude would be little more than symbolic at this point.

Firstly we import very little Russian crude, just over 200kb/day mostly into the west coast I believe. This compares to total crude imports of 6M/day, exports of 3M/day, production of 12M/day and refinery runs of 15m/day.

Secondly Russian crude is already a pariah. Nobody wants to touch it. Nobody wants to be seen with it. Everybody is scared of getting caught with a distressed cargo of it. Additionally even if you did want it, ship owners don't want to be seen shipping it, insurers don't want to insure it and banks don't want to finance it. Difficult to know precisely but stories are that the only real Russian crude exports are currently going to India and China.

The real issue is Russia is the 3rd largest oil producer in the world behind the US and Saudi. Removing that much supply from the global supply chain is going to rock the supply chain in a way that's difficult to imagine. This is why crude has rallied 100% from the December lows.

FYI you have a very similar dynamic with Wheat where Ukraine & Russia represent 25% of global wheat exports with wheat prices up nearly 100% in 2 weeks.

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 bobwest 
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SMCJB View Post
A US ban on importing Russian crude would be little more than symbolic at this point.

Firstly we import very little Russian crude...

Secondly Russian crude is already a pariah.... Difficult to know precisely but stories are that the only real Russian crude exports are currently going to India and China.

The real issue is Russia is the 3rd largest oil producer in the world behind the US and Saudi. Removing that much supply from the global supply chain is going to rock the supply chain in a way that's difficult to imagine. This is why crude has rallied 100% from the December lows.

Thanks for the info from a more informed perspective than I could ever have.

In response to the OP's question about whether CL is a good buy now, I basically said, or meant to say, that it's far from a sure thing what is going to happen. So I think that the basic retail trader should walk very carefully, if at all, in this territory.

But looking at the other side of things, it is quite possible that, a few months from now, we will marvel at how cheap oil was back in early March of 2022. So who knows?

I do think that this is a market for experts more than ever. But a lot will be made, and lost, in the next few months, more than likely.

Bob.

When one door closes, another opens.
-- Cervantes, Don Quixote
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Last Updated on March 8, 2022


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