With All due RespectThis focus on weekly inventory builds or lack thereof may help people who are nimble and wise like Migraine but for most of the regular folks, myself included in this category, it is meaningless and of no particular value.
I look at basic economics and finance and take a longer term view.
Many months ago I said when the oil price was around 110 a barrel that it would go to the marginal cost of Saudi production including their social costs to stay in power which is in and around 85 a barrel. Many people thought I was nuts.
Well...with all due respect...where are we now?
I also said that if the price went below that figure that the pressure over time will be for the price to go back up to that figure and if it it did I would buy more oil stocks which I have done last couple of trading days. I didn't buy at 120 a barrel.
I posted Charlie Munger's view yesterday partly because while he has a slightly different investment approach than me, we are on the same wavelength about where the market is going. If you want to to make money in the stock market over time you need to recognize a few things and do a few things...
1....don't fight the tape and get into the the same rythmn as the market - don't fight it
2....recognize that in the short term the market can get things wrong...so while over the long run oil is a good investment as Migraine says - there are times when the market thinks it isn't and that is a time to stay out. Smart money will wait till things are on sale (talk to your wives.... they are good at that when they shop!!).
3...as I mentioned before - when the market seems to be celebrating something that doesn't make sense then it doesn't make sense and get out. Interest rates are going up and will go up more than they have already. This will provide an incentive for people to take money out of the stock market and buy fixed income. Less money in the market = lower stock prices. It is simple supply and demand - nothing new!!
4....learn to figure out which markets are subject to extreme manipulation. Oil is one of them. As Migraine has pointed out repeatly, the oil paper market is 10X the physical market. Lots of manipulation there. Don't get sucked in.
OK enough of rant for now but I hope you get the message!!