Shorting Oil Over $100 A Barrel With DUG ETF

Last year I made a stupid mistake, buying the DUG ETF by mistake when I wanted to short the DOW. By shorting oil accidentally, I lost $500 in a couple days, figured out I'd bought the wrong ETF, and swore I would never short oil under any circumstance.

But oil closed over $100 a barrel for the first time yesterday, despite the fact that the winter heating season in New England is almost over, and oil inventory is actually rising. I could see gasoline continuing to go up due to refinery issues and the summer driving season, but with the recession closing in on us, I don't think oil is headed much higher for the time being.

So I bought 100 shares of DUG to short oil, getting it around $10 cheaper than it was priced when I bought it by mistake. Due to the 2X multiplier (DUG is an ultrashort fund), if oil goes back down to $90 and I sell out, I'll make back my earlier loss with a little to spare.

Could speculators keep the price of oil moving higher, despite the basic supply and demand equation? Sure, speculators can drive the price of anything up or down if they throw enough cash at it, or against it, but eventually they run out or cash out, and I'm guessing that $100 oil is a psychological barrier for a lot of them. If it's not, I'll take another bath:-)