Is now a good time to buy oil?

[QuarterMillionMan]

With the price of oil dropping is anyone here considering buying "oil" or "uso", both are ETF's in oil? I'm just about ready to make my move in one or both of those ETF's. I have about $10,000 to invest. Any opinions or insights would be greatly appreciated.

[corn18]

Maybe. Saudi is on a strategic plan to drop oil below the profitability level for some of the smaller players (Iran, Iraq, South America). And to a certain degree to try to counter the impact of US domestic oil production on their demand. So that means it is going down and will continue to go down. They can drop the world market down to <$40 a barrel before they start getting squeezed and can drop all the way to $10 / barrel and still break even. That's pretty low.

If you decide to go into oil, do a phased approach or short the ETF.

Tom

[bjl584]

I just bought more shares of BP the other day. I think it's over sold. And I'll get a 6% dividend yield while I wait for the shares to come back.

[kork13]

Maybe. Saudi is on a strategic plan to drop oil below the profitability level for some of the smaller players (Iran, Iraq, South America). And to a certain degree to try to counter the impact of US domestic oil production on their demand. So that means it is going down and will continue to go down. They can drop the world market down to <$40 a barrel before they start getting squeezed and can drop all the way to $10 / barrel and still break even. That's pretty low.

If you decide to go into oil, do a phased approach or short the ETF.

Tom

Another factor that hasn't been talked about much by the media, ISIS is in control of 3 oil facilities in Syria & Iraq, and are selling millions of barrels a day on the black market at prices far below the market. That is softening the market demand for legitimate oil sales, and driving prices down even further. With that said, the aggressive pricing between (primarily) Saudi Arabia & Iran are forcing Venezuela, Brazil, Libya, Algeria, and Russia to follow suit. Great article on this issue in last weekend's WSJ.

[greenskeeper]

I'd wait until the drop in oil effects the broader market pushing oil even lower. The last time oil dropped like this was 2009.

[alarson566]

The current phenomenon keeping oil down will probably keep it that way for quite a few years to come. So don't expect to see a return right off the bat

[bigdaddybus]

I will continue to buy MWE into the market decline.