I'm shorting oil. Is it smart or stupid?

I opened 78P USO for July 15 expiration today. I want to see some counter points. The reasons I think this is a good buy are: Chance for recession has to be pretty good with sanctions hurting the global economy, 50 bps rate hikes biting into the us, supply chain issues likely to linger all year as per several executive remarks in ER, worldwide inflation issues, Chinese economy nearing recession. The West also should be privy to implement policy and initiative to bring down the prices of oil because Russia makes most their money off oil they can still sell to Turkey and most of east Asia. The oil embargo EU may pass eases into a complete ban over a period of 6mo-3yrs. It's also possible that Russia could seek an exit from this war as the West continues to provide lots of supplies to Ukraine. At some point Putin must realize he's fighting a hopeless, Afghanistan-like war with an enemy getting tons of support from the west. Seems good to go to negotiate soon. Also, oil may be near a peak as from a historical perspective it doesn't tend to linger above $100 for a long time. Am I doing something stupid? Let me know your thoughts. Thanks.

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I'm shorting oil. Is it smart or stupid?

May 5, 2022

bearish

general Analysis

[1 min Read]

I opened 78P USO for July 15 expiration today. I want to see some counter points.

The reasons I think this is a good buy are:

Chance for recession has to be pretty good with sanctions hurting the global economy, 50 bps rate hikes biting into the us, supply chain issues likely to linger all year as per several executive remarks in ER, worldwide inflation issues, Chinese economy nearing recession.

The West also should be privy to implement policy and initiative to bring down the prices of oil because Russia makes most their money off oil they can still sell to Turkey and most of east Asia.

The oil embargo EU may pass eases into a complete ban over a period of 6mo-3yrs. It's also possible that Russia could seek an exit from this war as the West continues to provide lots of supplies to Ukraine. At some point Putin must realize he's fighting a hopeless, Afghanistan-like war with an enemy getting tons of support from the west. Seems good to go to negotiate soon.

Also, oil may be near a peak as from a historical perspective it doesn't tend to linger above $100 for a long time.

Am I doing something stupid? Let me know your thoughts. Thanks.

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USO

United States Oil Fund, LP

81.67

0
0.00%

Return

-1.87%
Change % Since Posting
-1.50
Change Since Posting
80.17
Price When Posted

Metrics

78.00
Target Price
8/ 10
Confidence
1-2 Months
Timeframe
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