BBC New 24 picked it up about 10 mins before this post as 'Breaking news'.

Interesting. They just did a headline summery, and said that oil hit an all time high of 78.99. Nothing about 80.

It's $80.

Oil futures hit $80 a barrel

Oil Rises to Record $80.18 on Larger-Than-Expected Supply Drop

I wonder if I should sell USO. I can get a nice 20% return if I do, but we have those storms coming in...

Be happy with 20% and if you've been watching the waves coming from Africa so far this year, they've all fizzled before amounting to much.

Cynus,

Its going to go higher. 20%? how about 30-35 or 40%. I doubt we have to wait too long either. I'm gonna sit on mine for a while and watch the show. If you believe even a small amount of the doom in here it is going to go higher. My guess is wait until the market starts pricing in peak oil. We haven't done that yet.

More importantly, oil is now trading at 2.11 Yergins.

Yergin

Hey, where has Michael C. Lynch been anyways?

Cynus,

I think Oil will continue to go higher long term. However, I think it is dangerous to play oil with USO long term because since USO is based on futures contracts and based on my understanding, the price spread between USO and Oil will continually become larger over time.

For example, last year, the spread between oil price and USO used to be only $7. Now the difference is about $20! I'm not saying that USO will go down short term. Just saying beware, I don't think USO is a long term play for oil.

Best Wishes~

gs,

Could you elaborate on why you think its dangerous to invest in something which tracks a commodity (even the futures) of something most of us agree is going up significantly long term? I mean I understand why short term you must be careful but I dont see why an ETF based on oil is going to be a risky play. That is unless you believe it's coming down at some point. I find that difficult to believe at the moment. Its only risky If you think the markets are either overpriced or coming down sometime in the future. Just curious.

gswarriors4life, from what I understand, you are right when oil futures are in contango. I don't know the details of it, but somehow oil traders can affect the price of the oil traded with USO. And so you did see last year that the spread between the price of oil and USO got ever wider. However, this is not the case when oil is in backwardation as it is now.
By the way, I did end up selling. I'll buy again in the spring when prices usually bottom out.

Just checked www.nymex.com and found out that the highest oil price per barrel had broken the record of $80.18 and now the official highest should be $80.20!!!

The floor looks like $78 to $79...hmmm

So while Oil Futures were in contango (future prices being higher than current prices), the spread between USO and the price of Oil continued to widen. What would happened is that when the price of oil increased, USO wouldn't go up as much and when Oil went down the price of USO would decrease even more. Theoretically, with backwardation (current prices being more expensive than future prices), the spread between USO and the spot price of Oil should decrease.

I think USO is a good short term play for oil, but long term there are better choices out there, like the Oil Services companies out there like Schlumberger, RIG, etc. All this is just my honest opinion, I'm still relatively a newbie in investing.

Oil closes above $80 for first time