Oil to 420.69 a Barrel via /r/wallstreetbets #stocks #wallstreetbets #investing


Oil to 420.69 a Barrel

Who cares if oil goes to $200 or $420.69 it’s a huge pump and dump. Gotcha with the title didn’t I mother fuckers!

Here’s why…

In terms of basic economics, price is driven by supply and demand. In the stock market, price is also moved by fear and anticipation. The former is a factor that can actually hold prices at a certain level, the later is a short term price adjustment that never lasts. We are valuating oil based on the later.

Why is it not S/D?

When did demand of oil skyrocket? Oil use has actually declined since covid and hasn’t picked up. https://www.bts.gov/newsroom/us-airlines-january-2022-fuel-use-down-17-pre-pandemic-2020-cost-gallon-hits-7-year-high

The thing about travel is that when prices go up, people don’t do it as much. In a lot of cases, travel is optional, especially now. And how much does, transportation account for oil use in the US? 66%, holy shit. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php also demand tends to goes down as prices go up… So even as supply goes down demand doesn’t skyrocket.

Why is it fear and anticipation?

The first most obvious reason is that everyone knows the big money will use any excuse to justify pumping prices. War, COVID, Supply Chain, etc. But will prices ever go back to normal? Fuck no! It’s pumped and then stays…. but that is only on a consumer level. At an industrial level things will go back to normal.

The sanctions and war in Russia and Ukraine have little effect on the US and US companies… but all oil stocks are going to the moon? The US only imports like 1% of it’s oil from that region https://www.aljazeera.com/news/2022/3/3/how-much-oil-does-the-us-import-from-russia.

TLDR; So what is happening. Big money is pumping oil for one last squeeze before it’s death blow. I’m betting that in my lifetime we will never see prices like these again. The world trend is shifting to new forms of energy and oil is not on the list. What is going on in the world right now is a distraction and they are using it as a reason for the pump. Look out for profit taking soon and sub $100 a barrel.

Edit: This is not financial advice and I am not a financial advisor. Good luck you assholes.

Submitted March 08, 2022 at 08:39PM by 1daBread
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