When oil traded above 60 - I didn't know if it was for real or as I said in a post - a dead cat bounce. It appears the rally was indeed false and we have set new lows to prove that.
What does this mean for consumers and also to those owning integrated oil stocks like COP and XOM?
First - gas prices will go lower once refineries catch up on the deluge of oil being pushed through their facilities. Gas will fall soon in your area. When, I don't know.
For those owning oil service stocks, integrated oil companies, and refiners - hold on through some pain. This could get rocky if oil doesn't stop the slide at 44. That's the line in the sand - if 44 doesn't hold - 40 likely won't either.
How to play USO.
If 44 does hold - buy USO (and COP and XOM) - however, if 44 fades - you have two choices - sell the oil stocks and attempt to catch them as they rise again...
or buy more stock on the way down and then re-balance by selling excess stock once oil stabilizes.
That decision lies with your personal level of acceptable pain/risk. Only you can decide how much it bothers you to see that red on your statement when you check your portfolio.