PowerShares DB Oil Fund (DBO)

All Comments on DBO

  • commenter
    Muzie
    Sep 06 04:23 PM
    Options Trader: Friday Outlook [view article]
    Your analysis is crap.

    Business consume a lot of the oil, not just businesses, so just taking us oil consumption and dividing by families is just dumb.     Reply
  • commenter
    leh
    Sep 06 02:19 PM
    Options Trader: Friday Outlook [view article]
    Agree with GlobalAlpha that oil is just the last bubble to pop, and that the problems runs much deeper. All that "free" money we spent over the past 10 years is coming back to haunt us, and this is one "trade" that may take years to unwind... Reply
  • commenter
    Realsit
    Sep 06 11:40 AM
    Toyota's View of the Future [view article]
    Mangolfer, how could you be that naive. Granted, the increase in energy costs has contributed to increases in consumer prices, but the collapse of the financials is NOT a result of the oil shock. The Financial collapse is a result of the following:
    1.) Huge current-account deficits we are running and the financing of these deficits by borrowing from abroad in ways that have exposed us to the national equivalent of bank runs. By 2040, our U.S. national debt will be 3 times our GDP. See Charts:
    www.financialsense.com...
    www.financialsense.com...
    www.chrismartenson.com...
    2.) Poorly regulated banking systems plagued by excessive borrowing and reckless lending: weak corporate governance, shoddy underwriting, securitization, negligence on the part of the credit-rating agencies and lax government oversight.
    3.) An entire subprime financial system: credit-card debt,
    student-loan debt, auto loans, commercial real estate loans, mortgage loans and home-equity loans, corporate debt and loans that financed leveraged buyouts. Household debt has doubled in only 7 years. Total credit market debt now stands at nearly $50 trillion. The total economy of the U.S. is only about $14 trillion.
    See charts:
    chrismartenson.com/fil...
    chrismartenson.com/fil...

    As Chris Martenson points out, our money system is based on a system that must continuously grow. We even define a shrinking economy as "negative growth." We have an exponential growth, debt-based money system. We're a society based on the false belief of continuous growth.The delusions of cheap energy fueled this belief. And as we know, the world and its resources are finite, not infinte.

    "Be careful what you wish for"....so said Joe Clark, founder and CIO of FEG, on CNBC yesterday. He says that input costs for oil exploration/extraction don't disappear with lowering oil prices. For oil extraction from the Canadian oil sands, the input cost is close to $70 per barrel and for deep water Gulf oil, it's around $95. The most recent estimate from the Canadian Association of Petroleum Producers (CAPP) puts the cost for oil sand extraction at $75 to $90.
    Extracting petroleum from the oil sands requires a massive amount of energy and water to separate the petroleum from the sand, rock, and other substances. “They’re moving four tonnes of the stuff to extract a single barrel from the oil sands,” says Simon Dyer, director of the oil sands program at an environmental think tank called the Pembina Institute, “two tonnes of overburden and two tonnes of the oil sands itself just to get one barrel.” The extraction process uses 2 to 4 ½ barrels of water for each barrel of oil produced, according to the Pembina Institute. Production from Alberta's oil sands climbed to an average 1.32 million barrels a day last year, a 5 percent rise over 2006 and could get to 3.2 million per day by 2017, the province's energy regulator said recently.
    Concerning deep water Gulf oil, it can take years to construct a new offshore rig. That includes the time it takes to collect the skyrocketing input costs for piping, metals, deep-sea drilling, and labor. You can't just flick a switch and turn on a new rig. It takes time. Offshore rigs - where the daily lease rates are still soaring - remain in a net supply deficit. A supply shortage for classes of offshore rigs capable of drilling in up to 10,000 feet of water means that the daily rate that operators pay to rent a high-end, deep-water drilling rig is now $500,000 to $550,000. That’s up from a day rate of $450,000 to $500,000 a year ago-and more than double the price per day on the spot market just three years ago, according to ODS-Petrodata Consulting & Research. ExxonMobilOil, PetroChina, and other oil exploration companies should expect the extended up-cycle in day rates to rent these rigs to continue unabated. Declining yields from mature, onshore energy fields coupled with increasing natural gas and oil prices is driving the demand for global drilling activity in deep-water provinces, pushing fleet utilization rates for high-end rig counts close to 100 percent, too. Exploration and production costs in the first-quarter Y/Y at ExxonMobil, Royal Dutch Shell, and BP, rose 30 percent to $5.8 billion, 39 percent to 7.4 billion, and 59 percent to $10.0 billion, respectively. The U.S. Gulf Coast accounts for about 25 percent of domestic oil production and 15 percent of natural gas output, according to the MMS.

    Reply
  • commenter
    David Martin
    Sep 06 09:54 AM
    Toyota's View of the Future [view article]
    Switchback rises and falls in oil prices also mean that it is much more difficult to finance investment in either other energy sources or getting out the more expensive oil that remains.
    The worst thing that could happen to security of supply would be for oil prices to fall to $80 or lower.     Reply
  • commenter
    john s.
    gordon
    Sep 06 08:10 AM
    Options Trader: Friday Outlook [view article]
    the oil speculators & hedgie funds have killed the airlines, general motors, & the consumer. but - - legislation in congress to control speculation has been blocked by - - guess who -- - bush cheney mcconnell & co,
    > jack     Reply
  • commenter
    User 143167
    Sep 06 03:53 AM
    My Website
    Options Trader: Friday Outlook [view article]
    China only consumes 2 barrels of crude oil a year per capita wise, 1/12 less than what the US consumes. I agree everyone should be responsible, but no doubt American's repsonsiblities are the foremost. Reply
  • commenter
    you_can_call
    _me_Al
    Sep 06 12:21 AM
    Toyota's View of the Future [view article]
    This follows a line of thinking I've had since first hearing about peak oil. Specifically, in 2005 it seemed that any honest-to-God flattening in production would be met with an excess of demand within 12-24 months and with a concurrent spike in price. At some point there would be a reaction, and most of the easy-to-fix wastefulness (mainly in the U.S.) would be eliminated. Hindsight tells us that $147 per barrel was the point of maximum pain, and folks were losing the SUVs, using public transport, not driving to the neighbor next door, etc.... Demand has now fallen below production capacity once again, so we should expect to see a pretty dramatic fall in price to nearly pre-runup prices ($80?). Things probably won't go all the way back down, of course, because some buyers will recognize future scarcity and create support somewhat above that level (higher if there are many, lower if there are few).

    Now for the good part, cheap prices will act to increase demand as mentioned above, but to some extent the genie is out of the bottle. Americans are likely to shy away from guzzlers and are less likely to return to the totally profligate attitudes of, well ...the last fifty years. Offsetting this: 1) some people WILL return to those attitudes, and 2) declining global production as new finds fail to offset the weakening giants. The former will happen almost immediately, the latter in the next few years.

    Where the right entry points sits boils down to some basic questions:
    1) How quickly can auto makers get large numbers of alternative vehicles on the road? Alternative here means anything that doesn't use gasoline (NG, EV, dilithium crystals, ...who cares?).
    2) When will the giants start to fall off in earnest? Cantarell is in free fall. If the others follow its example (not likely) then we're in for a very big spike indeed. Most likely, they will fall off more slowly, but it's still a big problem.
    3) Finally, at what point will EXPORTS fall? As declining giants become common knowledge, oil producing countries will be less willing to sell their resources than before, and the price per unit demand will rise. This last point is seldom recognized.

    There's no doubt that there's some corruption in the commodities markets (duh), but its existence does not negate the underlying forces. It merely exacerbates them. If/when these people are discovered, it would be a mistake to then assume that the oil problem is "solved." Look forward to one more spike in the next few years before alternative vehicles are produced in earnest. That one will probably be worse, but at least the problem will get solved once and for all. Congress, alternative vehicles are the answer, suing OPEC is not.     Reply
  • commenter
    AJ30
    Sep 05 05:26 PM
    Should We Listen to Boone Pickens on Oil? [view article]
    kebu 77, Where will we put all this rail capacity? Canadian National has been trying to buy the Chgo Elgin & Eastern to improve the capacity around Chicago, and all the communities are in an uproar of denial. Nobody wants a lot of freight trains 2 miles long running through their backyards and street crossings. Reply
  • commenter
    junkyarddog
    Sep 05 12:24 PM
    Options Trader: Friday Outlook [view article]
    We consume 1/4 of the world's energy and yet we're almost 1/3 of the world's market. Our throughput is still OK, but yes, we're wasteful and we can improve. However, to say it's America's [sole] responsibility to reduce consumption is ludicrous. Talk to China, India and other emergent economies and tell them the same.

    I agree the "earth needs a break"; alternative sources of energy and more efficiency are the way to go, but not ONLY for America.

    Reply
  • commenter
    cowboyinvest
    or
    Sep 05 11:58 AM
    Options Trader: Friday Outlook [view article]
    Phil: Great work. What do you think of a government buyout of a million new unoccupied houses for the sole purpose of destroying them. Say one million for $ 50,000 each. Similar to FEMA buying up property. Reply
  • commenter
    mangolfer
    Sep 05 11:49 AM
    Toyota's View of the Future [view article]
    The sudden oil price bubble that occurred is a big reason for the collapse of the financials and all the price increases in consumer products. Until oil gets close to pre-Katrina prices, it will be ugly. Reply
  • commenter
    User 143167
    Sep 05 11:45 AM
    My Website
    Options Trader: Friday Outlook [view article]
    American people should use more coal or natural gas. The earth can't afford to 24barrels a year per capita oil consumption anyway. It is Americans' responsibility to reduce oil consumption to give this world a break! Reply
  • commenter
    GlobalAlpha
    Sep 05 10:59 AM
    My Website
    Options Trader: Friday Outlook [view article]
    Phil,
    High oil prices are just a symptom of much greater problems, the result of a global economic septicemia fed with cheap credit and rampant moral hazards. Lower oil prices also are simply a symptom, that of the global credit crunch taking its toll. A secular repricing of all assets following an unbelivable expansion of credit is the key to reading the markets/economy; oil just happened to be the last bubble to pop.
    Cheers
    GlobalAlpha     Reply
  • commenter
    Vermont
    Trader
    Sep 05 10:29 AM
    Options Trader: Friday Outlook [view article]
    Phil. this has nothing at all to do with options...

    In fact you seem to talk about less and less about options and specific positions every week.

    Maybe you need to get back to basics, stop trying to save the world and just trade.     Reply
  • commenter
    junkyarddog
    Sep 05 10:23 AM
    Options Trader: Friday Outlook [view article]
    I couldn't agree more. I am one of those Americans whose discretionary spending has shrunk quite a bit. Just buying heating oil for this coming Winter is costing me an EXTRA $2,700, and I have a new house, with higher insulation layers. Others with older homes, the elderly (they need higher temperatures), and with less income are in a tough spot. So, yes, let's try to convince them cheaper oil is bad for the economy.

    I'm a huge soccer fan and recently an Arab group bought an English club in the Premier League: Manchester City. It's an inexpressive club, except for recently. The new Arab owners want to buy the most expensive soccer players in the world: Kaka (130 million euros), Cristiano Ronalso ($170 million) and others. Their plan: spend over $300 million euros until mid next year in new signings. Where's that money coming from?

    From that iPod I bought at the store or the extra $2,700 I'm spending to heat my house?

    What would we do without you Phil... Thanks for keeping the sanity in check.     Reply
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