Someone just go buy 100,000 barrels a day of oil. Put it on a Nordic American (NAT) tanker.
No, buy 200,000 barrels and put it on a Nordic American tanker. Hey, those big boys carry 2 million barrels.
If you did that, at least according to the International Energy Agency, you would tip the scales of demand back in a positive direction.
But do not buy that oil, do not pay those day rates, until you bought all of the S&P 500 calls you can find because that IEA demand statement, that they don't see it growing that fast vs. last month, is what's gripping this market right now.
The amazing thing is that just last week we had an inventory drop in this country that was the second-largest in history: 14 million barrels.
But then again, that was six days ago. That's old news, replaced by this new forecast that then sent the market down because, as we all know, the demand for oil -- not for coking coal, not for zinc, not for iron, not for steel, not for aluminum -- is what matters.
I know you are probably being driven as crazy about this as I am.
So, can I just suggest that you get a replay of Delivering Alpha where the great Bill Miller, who went into the crash of 1987 with 30% cash and is an amazing stock picker, reminded us that we had 9% in 10-year rates back then vs. the 1.7% we have today and, yes, I see the back-up in rates this afternoon.
No, I am not changing my tune. I have said it isn't worth the risk to come in around these levels because the reward's not so hot. But one of the reasons why I don't think it is belongs in the loony bin: the 200,000 barrels I need some nameless hedge fund manager to take down to make the IEA change its opinion next month from what it's thinking now.
Until we get to a level that no one in his or her right mind would sell off this IEA figure, then I say please have a defined strategy that minimizes risk, even if it minimizes reward.
That's fine for now.
