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Strategies & Market Trends : The Art of Investing
PICK 57.04+0.1%Jan 15 4:00 PM EST
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From: Sun Tzu6/6/2022 3:07:31 PM
1 Recommendation

Recommended By
petal

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My opinion on oil is that the risk/rewards are unfavorable. I understand the arguments about Russia, infrastructure underinvestment, etc. And I welcome everyone to make a case as to what is true now that was not true back in 2019 and then we can assess how much premium those reasons deserve.

But the truth is that much of oil's rise is based on speculation. Not just as trading, but because many people have moved their retirement and savings funds into commodities. Oil futures now show huge backwardation and the risk appetite for them has been exponentially increasing. All this tilts the risk/rewards to the downside.

I don't know when oil will make its top. It is due for a correction within a month. And that may or may not start the topping process. But when the top comes, we'll likely be looking at a 30%+ drop and it may be as sever as 60%+. So make sure that your greed and risk tolerance are balanced.
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