Oil Traders: Hurt Like Hell

Short oil traders beware because you live in Lala Land, and if you think that being short oil is ok, then go ahead and make my day. If you dare bet against the long side of oil, you are going to be hurting like hell! Ok, it is not me saying that even though I believe that peak oil demand is nonsense and I believe that the lack of investment in traditional forms of oil and gas will come back to bite us one day. No, the person saying this is non-other than the Prince of OPEC, Abdulaziz bin Salman.

Ok, I know that the Prince is the Prince of Saudi Arabia, but he is the world's most influential oil mister that brought the global oil market to its knees by instigating an oil production war that caused oil to trade well below zero for a short time. He also was part of the most massive global oil production cut in history that has brought oil prices back-up to more respectable levels. Now he is warning short traders of the worldwide oil market the same way a CEO of a tech company warns short-sellers. If you short oil beware!

I don't know if they cut 7 million barrels a day or eight million barrels a day but seeing that Saudi Arabia is OPEC's largest producer, and had the power to drive oil below zero and up again, the question you have to ask is, do you feel lucky? Well, do you, punk?

If you look at oil, it seems that the Labor Day September swoon is over, and the market is again focused on the path to a balanced global oil market. Saudi Arabia's threat to shorts also came with a carrot and a stick to overproducing OPEC members. By dropping hints that if they get in line with production cuts and makeup for past overproduction sins, that Saudi Arabia might shock and awe the oil market with a surprise production cut. There is no doubt that the Saudis caused a price spike with a surprise, but all you have to do is look at the success they have had reducing U.S. oil inventories in the U.S. It seems the Saudis might be getting ready for a production cut of supply.

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Disclaimer: Past results are not necessarily indicative or future results.Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a ...

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