Stock & Crypto Thread

[JBB2]

It works

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[JBB2]

Oil reserves are currently a fraction over 300 million barrels, about the same as 1982. In 1982 the typical price was around $26/barrel. Oil supply rose steadily to a 2008 peak just under 800 million. Since then it has fallen to today’s levels.

To convert the 1982 dollar to 2026 dollars multiply by 3.5. Maybe not exact but good.

In today’s dollars the 1982 barrel is ($26 x 3.5 = $91.00). Currently oil is just under $90.

With falling supply prices should rise. Unfortunately demand is falling too, at rates not seen since 1982:

The rich countries’ energy think-tank has again cut sharply its prediction for world oil demand this year, and now expects it to average 84.7m barrels per day, down 1m b/d from last year, because of the steep downturn in the world economy.

This year is expected to mark two successive years of falling demand for the first time since 1982-83.

The falling demand arises from slowing economic activity. An oil shortage may not develop. Prices may be near the top of the range now.

[JBB2]

Oil has been going up. My previous hunch was wrong. All CVX short calls are in the money. They will do fine but there is a lot I’m leaving on the table. Should have run condors instead of splits.

For a while IV has been higher than HV on A lot of stocks. Generally this means prices are higher than ordinary. Good time to sell calls in front and/or puts behind. Buying calls and holding an appreciating position can work too.

Big tendency for volatility measures to revert to the mean at any time. Keep an eye out for reversing trends. That’s why I like selling the calls. When the reversal happens they lose value when prices drop so I can buy them back cheap.

I don’t like carrying unrealized gains. Calls are a good way to cash in while nickeling-and-diming them.