Please find other chapters of my book here.
I was sitting at a conference. It must have been 2012 or 2013, and most of the talk was about commodities, and in particular how boring the oil market was. Basically the oil price had been hovering around the USD 110 a barrel since 2011. While people knew that US oil supply was growing, there was a belief that OPEC would keep prices high.
I had made some good money shorting iron ore producers over the last two years, so I was looking around for other areas to short. I had started to short coking coal producers, as weaker steel and iron ore prices weighed on their selling prices. So I was inclined to be bearish commodity producers if supply looked to be increasing, especially as Chinese demand was slowing.
Oil was more difficult, as China was still building out its road fleet, and its per capita consumption was well below Western levels, so it did not seem like a great area to short. Unlike most industrial commodities, Chinese consumption was not that dominant in the oil market. But as I was sitting listening to various people speak, I heard something that piqued my interest.
