Reinko

Oil Drops - But OPEC Looms

Remember all those years when the Chicago school of economists with succes planted the next flag into the mind of OPEC:

When oil is not between 20 to 30 US$ a barrel, the world economy will get destroyed!

The OPEC bowed for years for wisdom like that, but they to have studied the way the world economy behaves when the Chicago folks are proven to be telling crap.

And beside delivering to the two Western oil markets, they could be delivering stuff at reasonable prices to other countries...

The low price deliverance to poor countries could be financed by maxing out some obese Americans or some stupid Europeans.

This all could be, yet if I would be OPEC I would not advice oil below 100 US$ because otherwise the Chicago folks would not understand where the wind is blowing from...

Good luck my dear OPEC!

While Iran Threat Keeps Oil Elevated, U.S. Stocks and Dollar Slip

Upon Iran:

Finally OPEC is talking some sense and we must not forget that the latest time the Iranians went on an agressive war was somewhere in the 19th century...

Until now there is no quantum of proof that the Iranians are indeed building nuclear weapons, I follow this for years and there is not one quantum of proof.

There is only stupid talk by stupid generals.

Beside this many years ago I explained to the Iranians how to build bunkers that could withstand the US bunker busters.
Lately the USA had a brand new model of far bigger bunker busters but in case the Iranians have followed my bunker building advices the new bunker busters are not a real threat.
The trick is very simple: Since bunker busters are very 'needle like' shaped all you have to do is destabilize the tip of the weapon at impact.

__________

On the paragraph 'US Manufacturing Improves':

In the first place the reported 50.2 in some vague statistic falls inside the white noise range, that means it is not statistical significant.
In the second place, it is related to exports so it has nothing to do with local USA demand.
When the US$ declines it is rather logical exports climb...

Oil Bubble Breaking? Barron's Outlines the Case, But the Argument is Weak

And after reading the comments further on, I think I have found another idiot that does not understand the actual workings of the US financial system where it is not uncommon to observe elephants fly.

The quote is from datalink 1995 and datalink 1995 thinks that trading of futures is related to actual delivering of oil at your door...
Never ever it has occured in the mindset of dataling 1995 that traders that work at banks consider this 'rather unhandy' and that this is against the 'nature' of futures because futures 'only follow real markets'.

Not often you observe it as dumd as the datalink 1995.

Here is the wisdom of datalink 1995, quote:

There have been speculators long before any of us were born. They can’t corner the oil market. Eventually they have to take delivery, and the cost of storage would break the price.

Oil Bubble Breaking? Barron's Outlines the Case, But the Argument is Weak

Correction: Due to a lot of spyware on my computer (that is not to be found by ordinary anti spy stuff) my PC often does strange things.

So I correct the wrong words, quote:

Furthermore you mention 110,000 of these contracts open in August 2007 when oil/barrel was US$.

With the words as I typed them just a few minutes ago:

Furthermore you mention 110,000 of these contracts open in August 2007 when oil/barrel was 78 US$.

Oil Bubble Breaking? Barron's Outlines the Case, But the Argument is Weak

To Michael Levy:

Nice to read your comment, but it would be better if basic commodities that folks need to survive antoher day are not prey to attackers from the M3 money universe.

To adenovir:

Ahum, we are talking about oil futures so by definition no oil is delivered. For example; when you buy some futures on the DOW Jones, are you forced to buy stocks from the DOW when settlement is there?

To saifl: You quote some hard to read stuff, but you basic argument is that only 12,000 contracts are open by 'speculators' is nowhere to be found in your quotes. Nor do you place a link where talk like this could be validated.
Furthermore you mention 110,000 of these contracts open in August 2007 when oil/barrel was US$.

And last but not least: You talk about 1000 barrel contracts...
So 12 thousand open contracts amount to 12 million barrels of oil while world consumption is 85 million barrels a day.

Better go back to highschool and try to understand elementary math saifi...

Will the World's Central Banks Successfully Fight Inflation?

Of course I should have written:

'so funds like pension funds invest...'

Will the World's Central Banks Successfully Fight Inflation?

The main problem is that the central bankers do not understand the nature of the present problems; Alan Greenspan never understood why throwing so much money on the markets in defense of the 1% rate threshold is very dangerous in the long run.
(Proof that he did not understand: That conondrum thing of Alan...)

Right now ECB Jean Claude Trichet also does not have much clue either because just a few days ago he stated that European inflation was 'anchored'. (Anchored inflation means that workers cannot get higher wages to compensate for it).

Well in my country Holland just the day before yesterday the latest wage round with the unions were closed and all got above inflation wage increases. (This on the back of a record number of strikes in all parts of society, even the police.)

So here in Holland inflation is embedded: That means workers anticipate on future inflation expectations.

And today brought the news that in the 15 nation Euro zone wages will grow 3.3% on average, that still is below inflation expectation but in Spain the shops get empty just on the back of high fuel prices. So likely most European workers do not like a Trichet anchor around their neck...

Source:

www.bloomberg.com/apps...

And that guy Bernanke? Don't make me puke, he is one of those who induce a 'cash is trash' mentality so funds like pension invest less and less for the long haul and act more and more as day traders on food and commodity markets. There are even Swiss banks who advertise with these kind of new products, they call it 'Thinking new perspectives'.

Oil Price Rise: Demand - Supply - Speculation

Nice article, since I read that Masters file a lot of what I already suspected got some hands and feet.

What I don't understand is the next quote from the above article:

According to Michael Masters the increase in institutional-investor position's on WTI futures increased 539% over five and one-quarter years [102% per year on average]. Unquote.

In my world a 539% increase over 5.25 years equals to 42.37% year on year.

For the rest: A good article!

CFTC Investigating Potential Crude Oil Price Manipulation

Today I visited google news and searched the news on the word libor (= London Inter Bank Overnight Rate) and strangely enough this article popped up on top.

So guessed that somehow this article is relatively popular and therefore I would like to point to the blog of Russ Winter where you can find explanations like my previous update from above.

Here is a link to his blog:

wallstreetexaminer.com.../

In the beginning you will find the articles difficult to read, but keep on trying. You can learn a lot of it if you keep on trying.

And for me as a European it is even harder, because what the heck are tin foil hats? What are 'pig men'? (That are bankers).

What is the ministry of Truth? (The Treasury)

It is just a tip, you can learn a lot from Russ Winter.

CFTC Investigating Potential Crude Oil Price Manipulation

To zenalgorithm:

It is amazing to see how many US folks think there is actual hoarding of oil, this is not the case.

The fundamentals are as next:

World production is like 85 million barrels a day,
World demand is like 87 million barrels a day.

So the oil reserves decline slowly.

The hoarding takes place on the futures markets, when you buy oil futures the oil is not delivered at your door and you cannot store it into your garage.

But these oil futures are rolled over every month and without the money in it, oil would be about 30 to 40% cheaper.

It is all very simple, but proving real market manipulation is something else.
I am not sure of course, there could be rigid manupilation, but I think most investors are like pension fund investors who only want a good profit for their clients. They might be dumb because every dollar they earn gives far more dollars damage, but the hypothesis that 'evil forces' drive the market is not realistic I think...