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Hi,
I bought some Oil ETN shares a few months back, and i'd like to buy some more now that it's at 8.50 but i'd rather buy ETF shares.
can anyone recommend any?
You can compare XLE to WTIC over the past two years and they both tended to follow the same trajectory, but over the period of 3-5 weeks they can diverge. Going to stockcharts and using the ':' operator, I found that $WTIC:XLE varied from 0.65 to 1.35.
If you are betting on the price of oil recovering by buying an ETN, maybe you should really go for it with some calls.
It seems impossible to me to invest in oil where you aren't just speculating --> other than the refiners. I think of these as manufacturers since they produce a manufactured product - distillates.
Countries that produce the raw material - petroleum have not invested in their refining capability, so it's a good bet that refiners will tend to make money over time. In addition, most of the oil producers stupidly subsidize their citizens' gasoline prices, so places like Venezuela and Iran have pump prices at insane levels like 25-cents or so a gallon. ( "or so" in that I don't have the exact number other than knowing it's insane ... ). Oil producers' consumption of what is basically their whole economy is way out of whack and thus "whacked."
When MRO spun-off MPC, doubling down on MPC and then doubling again was a smart thing for me to do. It's too bad that I'm so often wrong when I trade oil stocks ( so I don't ). I've only done two long-term buys and that was MRO and CVX in 2001 and that 'MPC buy' mentioned above. I wish I had scaled out of MRO and CVX last summer, but I've mostly ridden them down.
You can compare XLE to WTIC over the past two years and they both tended to follow the same trajectory, but over the period of 3-5 weeks they can diverge. Going to stockcharts and using the ':' operator, I found that $WTIC:XLE varied from 0.65 to 1.35.
If you are betting on the price of oil recovering by buying an ETN, maybe you should really go for it with some calls.
It seems impossible to me to invest in oil where you aren't just speculating --> other than the refiners. I think of these as manufacturers since they produce a manufactured product - distillates.
Countries that produce the raw material - petroleum have not invested in their refining capability, so it's a good bet that refiners will tend to make money over time. In addition, most of the oil producers stupidly subsidize their citizens' gasoline prices, so places like Venezuela and Iran have pump prices at insane levels like 25-cents or so a gallon. ( "or so" in that I don't have the exact number other than knowing it's insane ... ). Oil producers' consumption of what is basically their whole economy is way out of whack and thus "whacked."
When MRO spun-off MPC, doubling down on MPC and then doubling again was a smart thing for me to do. It's too bad that I'm so often wrong when I trade oil stocks ( so I don't ). I've only done two long-term buys and that was MRO and CVX in 2001 and that 'MPC buy' mentioned above. I wish I had scaled out of MRO and CVX last summer, but I've mostly ridden them down.
thanks for that great response.
not sure if i'll buy....but remembering what happened after the war started back in 2003, and seeing how crazy volatile the whole world has become, i'm thinking the price will shoot up as soon as there's a 'new' conflict....no?
anyway, i might buy a 100-300 or so shares of XES or something....just to buy some oil speculating that it'll most likely (IMO) go up....eventually....
UCO is a leveraged ETF that tracks the price of oil I believe. It's obviously way down right now and could potentially fall more, but depending on your risk tolerance, has a large upside as a leveraged ETF...
not sure if i'll buy....but remembering what happened after the war started back in 2003, and seeing how crazy volatile the whole world has become, i'm thinking the price will shoot up as soon as there's a 'new' conflict....no?
When I picked up CVX and MRO in 2001, it was before 09/11 and my rationale was the same as yours now.
I bought CVX/MRO, but one could have gotten RDS, XOM, COP, whatever ...
I paid about $30/$6.50 ( respectively ) and gotten about $38/$8 in dividends. Current prices are about $83/$18, so even ignoring dividends, they are both almost 3-baggers. Counting dividends, they have returned almost 10% compounded.
During the initial decline during the depression, CVX declined by about 1/3rd and MRO about 2/3rds. Both are about there now.
The thing is, if you are buying a long-term holding like an oil major, it doesn't matter much if it goes down another 20% in the next year and then rebounds in another year ( or so ), but some of the more speculative plays will get bought out and folded into something bigger and you'll have a permanent loss then. The majors know how to make money. ( They didn't cut their dividends when the depression started in 2007, BTW. )
Quote:
Originally Posted by Thinking-man
anyway, i might buy a 100-300 or so shares of XES or something....just to buy some oil speculating that it'll most likely (IMO) go up....eventually....
As long as you are prepared to lose most of that money if it doesn't work out, it will keep you interested. Speculation has entertainment value.
There is a lot of bad stuff that can potentially happen that could take the price of oil up a lot and fast.
IMO, you should consider at least, 1/3 to 1/2 in "boring" places like a couple of oil majors. If your spec pays off, consider doing that 1/3 to 1/2 again with the profits. All it takes is large huevos.
USO is a non leveraged fund for oil and UCO is 2x leveraged. UWTI is 3x leveraged but I would really stay away from that one, unless your holding for less than 2 weeks.
USO is a non leveraged fund for oil and UCO is 2x leveraged. UWTI is 3x leveraged but I would really stay away from that one, unless your holding for less than 2 weeks.
Thanks for mentioning UWTI, that looks like my type of gamble....planning to buy 20 shares to start, then buy same whenever it drops...I opened Robinhood a few weeks ago so no commissions. When it shoots up, I'll throw $1K at it immediately.
My DBO is not doing to well, besides I'm locked in, so let's see what a month from now shows.
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