EDIT: You beat me to it and have essentially addressed my points. Still, assuming you have time on yr hands....
The deed is done so this is going to me more about managing the trade if nothing else.
I would agree that if an even greater fall in the price is not going to force you out then time may be the determining factor. As demand is continuing to fall as oil consumers shut down (e.g Easyjet) then the immediate problem is the soon to be full storage facilities. Residual demand extended over, say, 3 months may show only gradual signs of increase after that. So, the market being the market and zero not being on the table, what price bracket would seem to be the most likely floor and how are you going to handle that? Or have you just called the bottom? 😛
Of course, there will be a recovery in demand but in the light of the gyrations that the market price has already indulged in historically without a demand-side problem then this could well turn out to change the oil map for the forseeable future.
The case for the protection of national oil industry interests could arguably be not much stronger than it is now and this could be equally well coupled to government stick/carrot programmes aimed at reducing consumption generally whilst furthering other sectors more "beneficial" to the health of the economy through dependence diversification...e.g, battery technology, renewable energy, electrification of basically everything, investment in rail networks, a serious rethink of the current role of the airline industry etc etc
All in all: lower for longer, maybe muuuuuch longer and a sluggish rise in price - hyper-sensitive to storage capacity numbers and the restarting of pumping operations that at some point soon must stop.
So, how long do you want to hold your position? What criteria will use you use to determine whether it's worth holding or not?
Yeah, price dropping will not force me out of this trade. I am willing to deal with the infinitesimal that it all goes tits-up. It's far more likely that the U.S Gov would step in with it's star spangled cape to save West Texas Oil.
As I said, for every $5 the price goes, the more of it I buy.
It could take a while, I am no expert on oil, but I am willing to wait it out, because it IS going back up. We as humans don't really do smart, or the right things. It would make sense to put more efforts into moving away from oil, but there is currently too much money in it.
I am confidant that the U.S Gov would prop it up if it came down to the crunch. And if that's so likely, then massive efforts to move away from oil and toward more sustainable/renewable energy is unlikely.
Will it go back to $80 per barrel?
I don't really know... probably?? Eventually...
I don't know where my target is exactly, but it's definitely above$40 per barrel. Probably closer to $60.
I'll wait it out because of the likeness and profitability of it.
Of course it could go bust and I lose everything... this is a game of probabilities. But the probability of that is very low. I don't see odds like this very often.
My next steps are to manage the trade. If it drops to $15, I deposit more money, and buy another bit. Ensuring I can withstand a drop to sub $1 p/b.
Part of me is thinking, if I'm going to look to add more to the trade as it moves in my favour, why not add to it now at such prices?
