The oil price and oil stock prices have been smashed to pieces this year through the double whammy of the C-19 pandemic and the Saudi/ Russia oil price wars.
Oil could still go below USD20 a barrel.
But this is one of those times where I am willing to load up.
Have a look at the price action for oil and just about any oil related stock that you care to mention on 2 April.
Just the mention of an end to the oil price wars had oil companies spiking across the globe.
Oil will eventually benefit from the end of the pandemic, the global economic recovery and the end of the oil price war.
To get to the point:
I am looking to get long oil whenever it dips down here.
I’m spreading the love across oil companies listed in Hong Kong, the UK and the US.
I’ll start to get long down here and when I have loaded up, I’ll just wait.
I’m expecting USD40 oil again in the not too distant future. It might not be this year, but it is coming.
As lots of unprofitable and costly oil operations have been closed down or mothballed and global oil demand comes back, USD20 oil won’t last for long.
So, I’m stocking up on oil down here and the lower it goes, the more I’ll buy.
As ever, you need to make your own decisions.
This is how I play. You have to find your own way to play. A way that you are comfortable with.
A simple way to play is to just start to buy some XLE (a fund full of oil majors) and look to exit some time next year.
Other approaches are available.
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