On an unnamed social network (marked F), Mr. K asked me “Where will oil go”. This is definitely a question for many of you who are in the financial markets, so here you can read what I think about it:
Hello Mr. K, with the way it is now set globally, one could say with a clear conscience about the following. The long-standing speculation that you would buy and hold oil is not really a nut at the moment. It’s possible, but you have to reckon with the fact that the energy market is so volatile and fundamentally weak that it could suck $ 8,000 or more out of your account by returning to $ 20 a barrel (which is definitely not excluded). Short-term and intraday speculation, in which the market reacts to current strong fundamentals, could now seem more meaningful. An example is the current rise in the price of black gold related to Thursday’s meeting of the world’s major oil producers and the expectation of a reduction in production. The question, however, is what effect this will have at a time when global demand has fallen by 30% and when the activity of the “half” of humanity is dampened by various regulations and restrictions.