rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

I should add that oil producers are in a difficult position. If they cut back heavily on supply to push up prices, they risk accelerating the worldwide recession and subsequently pricing out demand. Leaving prices low retains demand and hopefully aids recovery. I suspect OPEC understands the position they're in.

In my opinion.

Strawbs.

Regardless of the bottom for oil, I have bought wti or hedged on the way down and taken the hedge off!I am under the possibly mistaken impression that on a technical basis $43 is a fib retracement and bottom of the channel. I am hoping for a bounce to $49 as the trading range for it tends to span $7. I gather that technincally oil needs to rise greater than 20% to confirm a trend reversal and break through the moving average which I would guess is around $65

Falco - i suspect you are much more likely to be right than wrong

Strawbs - there was arguably under-investment in refining capacity rather than getting the stuff out of the ground in the first place ..... however, you are certainly right about the OPEC dilemma, but as i have written before, i really do not anticipate Nymex remaining >$50 for long ..... if you want a time limit, then i would stick my neck and say within 3/4 months and maybe sooner

You could be right. The winter months should stimulate some form of price recovery. I guess it all depends on how much of the price was speculation, how much was real demand, and perhaps how much is now "short" speculation too.

In my opinion.

Strawbs.

I think the dollar plays a major part as well and when many were suggesting that it was going to implode at 2 pounds and 1.6 euros {bit like the pound at the moment] oil was cited as being a good hedge. I quite like trading on a hedging principle as it is basically insurance ie buying heating oil etf at these levels proportionate to the annual fuel bill... if it carries on dropping the bills get cheaper at least they would if there were not a utility cartelle with no effective regulation or correlation to what it buys gas at and what it charges for it... they had better start cutting charges soon or I will have to write to my MP!

Thinking about winter demand. Presumably much of it was paid for in the Summer as the larger energy companies would need to have a guaranteed supply. I guess that would mean that any oil demand/price rise might be equally lagged unless the winter is worse than expected. Just a thought.

Strawbs.

NYMEX TRADING
I have just spoken to IG on this score .... they will offer $2.50 per point - i.e. for every $1.00 oil moves, your profit/loss is $250.
It works against monthly contracts - like a traditional traded option - so the underlying price will vary.
Risk is still quite high, but it's worth investigation for those of that bent

I read somewhere a while back that utilities bought forward Jan.09 at equiv $110 crude though that is only from memory which isn't what it was...

Long dax short ftse pairs trade less than 350 points between them!Cynic I can only see $5 on ig for wti/brent

you are technically right, but i spoke to my m8 there and they will do a half mini-contract .... for me at least!

Does his name start with a 'B' by any chance?

no ..... i know a lot of the guys on the CFD side, but none whose name starts with B - lol!

I just rang them and they would only give $5, you must have good mates there! I shall stick with Gft spreadbetting as $5 is a bit racy with $2000 margin requirement and the currency conversion rigmarole!

you clearly don't have the right effluence!

cynic sorry we hit a nerve with you finding oil a sensitive subject. We shall wait and see whether Goldman ($175) or Merrill ($25) turn out to be right. What is obvious is that demand is going to fall rapidly so opec reducing production may have little or no impact as non opec producers will continue to pump as long as they are making a profit. All producers dependant on oil exports to support their national economies will continue to produce as they need the cash but they most certainly will try to reduce the cost of production and development. By the way the cost of production in Saudi is far less than $45 per barel according to a source we know it is nearer $10.

effluence? :-)

no nerve hit with me ..... my own view is that the fall is every bit as speculative as was the rise ..... and your source in saudi is talking balls or he isn't answering the Q you think you asked ..... by the way, how do you think (say) saudi will reduce the cost of production and development so that it will actually have an impact on the overall price?

btw, my own view (again!) is that the "natural" price of US light crude (aka nymex) is +/-$100

cynic you answered your own question in thread 3632 in reply to strawbs.

i re-read and saw no contradiction

The cost of production includes investment in new supply, drilling, etc. If you cancel that investment, then the cost of production comes down. If you don't need the supply, you don't need the investment. I believe that's what happened after the last oil shock. Of course that just means when demand picks up, the same supply side issues appear, and the price is squeezed upwards. You probably need to consider cost volumes too. e.g. It might be barely profitable to sell 80 million barrels a day at $x, but unprofitable to sell 79.9 million at the same cost.

I don't have a clue what the true value is, but I suspect it's dynamic relative to demand. The figure may also be different depending on whom you talk to. One producer may have spent a significant sum on producing from a new well and need $75 oil to break even, another with a mature field may only need $10 oil. The market will adjust higher, or the more expensive producer will go out of business. That's capitalism!

Strawbs.