RE:Crude Net PositioningGreat post Migraine!!
Actually if you look at the other dip in 2016 and the subsequent action there is a similar story to 2020 although not as extreme. This clearly qualifies as a price inefficiency and reinforces what I have been saying earlier regarding the price inefficiency of Brent oil being substantially below the Saudi social cost of 85 a barrel.
The question then becomes one of timing. The two key shorter term considerations are the debt ceiling and the increasingly high probability that we will see a recession in 3Q. These are two big factors which could do two things....one - increase the length of time before we see the rebound in oil prices and two - the net position will get even more offside before it gets better.
There are obvious investment strategies to deal with this depending on your risk tolerance and overall inv estment strategy.
In my case, I already hold a short term position in oil based on the price inefficiencies that I have talked about. The decision facing me, based on your post, is not so much whether to increase my position, but when.
Which ever way I decide, I do not view my oil holdings as a long term investment for the reasons I have stated here in previous posts.
Thanks again for the work you do Migraine and your willingness to share - much appreciated!!