Supply and Demand fundamentals are no longer driving the market. There is more supply today versus demand as compared to the "bubble" in oil prices in 2008.
While I agree that speculation was and is not the "Primary" cause of the oil spike in 08, the stubbornly high oil price today and most of 09 shows more speculation than fundamentals.
Speculation by the big banks in America and around the world are artificially raising the price of oil. The TARP injections of monies into the major banks has thus far not increased the willingness of the banks to lend. However, banks are showing profits from their brokerage affiliates, and I believe that commodities, in particular oil, is the preferred vehicle for those profits. If fundamentals were in play in this market, oil prices should be no higher than $50/bbl.
More Bullishness for Oil Heading into 2010 [View article]
Current production is 1-2 million barrels per day more than demand. It will take longer than you think to work off the extra crude. All of the "green shoots are turning out to be weeds.
The current rise in crude is the result of speculation that the world economy will turn around next year.
I think you are overly optimistic in your prediction.
The Professor Of Commodities: Interview with James Doran (Part II) [View article]
I agree. Anyone that knows even a little about commodities knows that the prices fluctuate. Go back to teaching! Those that can, do, those that can't, teach.
The Oil Story: Dallas vs. Indonesia [View article]
Mixster,
I agree whole heartedly. The U.S. has about fifty years of proven reserves (not counting the East and West coast offshore areas off limits). Allowing domestic oil companies to do what they do best, explore and harvest the petroleum resources we have on our own continent. Along with a responsible, defined energy policy would lessen our dependence on fossil fuels over the next fifty years. Set benchmarks that are achievable, and monitor progress. perhaps every five years review the progress and make adjustments as necessary.
Politicians blame oil companies for some arbitrary conspiracy to keep prices high, when in truth, it is the Congress that has restricted the free flow of oil at market prices by enacting laws that have effectively restricted the upgrading of our domestic oil infrastructure. Drilling/exploration restrictions and the cumbersome environmental rules that prevent the building of new, more efficient refineries, has more than anything reduced our domestic supply.
I realize that asking Congress to do something with intelligence is asking the impossible, just thought I would put in my two cents worth.
The Fundamentals of Oil Shocks [View article]
While I agree that speculation was and is not the "Primary" cause of the oil spike in 08, the stubbornly high oil price today and most of 09 shows more speculation than fundamentals.
Speculation by the big banks in America and around the world are artificially raising the price of oil. The TARP injections of monies into the major banks has thus far not increased the willingness of the banks to lend. However, banks are showing profits from their brokerage affiliates, and I believe that commodities, in particular oil, is the preferred vehicle for those profits.
If fundamentals were in play in this market, oil prices should be no higher than $50/bbl.
Peak Oil for Dummies [View article]
More Bullishness for Oil Heading into 2010 [View article]
The current rise in crude is the result of speculation that the world economy will turn around next year.
I think you are overly optimistic in your prediction.
Crude Oil Takes a Backseat to Gasoline [View article]
It seems to me that there was not any increase in inputs according to Wednesdays EIA inventory report.
The Professor Of Commodities: Interview with James Doran (Part II) [View article]
Managing Duration for Commodity Funds: Which Strategy Is Best? [View article]
If someone invests in ETF's without knowing about the funds management style, then they have not done due diligence and deserve the consequences.
The Oil Story: Dallas vs. Indonesia [View article]
I agree whole heartedly. The U.S. has about fifty years of proven reserves (not counting the East and West coast offshore areas off limits). Allowing domestic oil companies to do what they do best, explore and harvest the petroleum resources we have on our own continent. Along with a responsible, defined energy policy would lessen our dependence on fossil fuels over the next fifty years. Set benchmarks that are achievable, and monitor progress. perhaps every five years review the progress and make adjustments as necessary.
Politicians blame oil companies for some arbitrary conspiracy to keep prices high, when in truth, it is the Congress that has restricted the free flow of oil at market prices by enacting laws that have effectively restricted the upgrading of our domestic oil infrastructure. Drilling/exploration restrictions and the cumbersome environmental rules that prevent the building of new, more efficient refineries, has more than anything reduced our domestic supply.
I realize that asking Congress to do something with intelligence is asking the impossible, just thought I would put in my two cents worth.
Record High Crude: Free Markets Meet the Cartel [View article]
Free markets work, and the equilibrium will come sooner without government intervention.
Congress' Idle Threat against Oil Producers [View article]
The Democrat party says they are the party of change.
The voters may get change if they vote for the Democrats.
However, ask yourself, is this the change we really want?
Be careful what we wish for, we may get it.