The forces driving up oil, mostly OPEC and Saudi Arabia/Russia in particular, during earning’s season, have created a unique historical opportunity. The manic exuberance of investors is not yet at peek hysteria so I believe there is still money to be made in this sector. My currnet price prediction for oil is that it will end up at $81-$84 within the next 3 months, or come very close to that.

I predict there will be a couple of bumps in the road, but that the main drivers behind the rally are desperate to raise cash in advance of geopolitical instability. Russia in particular desperately needs to balance the negative effects of sanctions against them, and the US needs as many people as possible deeply invested in the petrodollar to try and stave off China’s attempts to supplant them.

I don’t know who will win this fight, China is far more cocky than it should be, inspite of the gross incompetence of American leadership, America has historically had a margin for stupidity, whether or not the US has pushed it too far, I don’t know.

I expect socialists in Venezuela to continue running their oil production into the ground due to the upward adjustment of ideologically pure administrators. PDVSA is proud of its mixture of ideology and production, and like the Soviet Union, it will be awhile before the shit results have a significant number of people turning on their representatives. I expect Western countries to continue to try to push Venezuela over the edge, but Russian and Chinese interference is a distinct possibility throughout South America.

I expect that the failures of $TSLA are also contributing to the rally in fossil fuels, while I have started to look positively on the company for the long term future, the short term chaos in production has dealt a serious blow to the electric car activists, and that kind of rhetoric is less likely to affect weak minded investors.

The Yijing says: #56 Lǚ, Itinerant troops: 1st Changing line: The wanderer is trivial and petty, chopping up his position and seizing calamities.

A first impression is extremely important. Often it cannot be undone, and even if one can show one’s real intentions later, it will never be really convincing.

Update – $HP 10:45 AM

Holy Shit that was a scary drop no? That’ll teach me to open a position when the stock is pressing the upper Bollinger Band, I’m not much for technical analysis, but I had an inclination when looking at the chart that I should wait for a larger correction. Maybe that was my spidey senses tingling. Anyway, $HP dropped something like $1.80+ in 30 minutes. On the largest position I’ve ever opened. Yeah, that’ll do your head in.

Update – China in South America

Many people might not be aware of China’s forays into South America, as I mentioned earlier in the post. Then this comes out: China Sets Its Sights On First South American Refinery. Nobody expects The Chinese Inquisition. How do you say Struggle Session in spanish?

Update – $HP 10:10 AM

Massive selloff at the start of trading for $HP, down 40 cents in less than 15 minutes. Early volume to the downside. Man – red is scary sometimes.