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Dr. C. » Comments » USO

  • How $30/Barrel Oil Could Save the World  [View article]
    If you put a government enforced cap on oil at $30 per barrel many current supply sources with a marginal cost of production above $30 will stop production. You will also see a drastic cutback in the development of new sources such as the deepwater Brazilian fields currently in development. The result will be supply shortages, long lines at the gas stations, and eventual rationing.

    If you want to see what the results of a artificially constrained oil supply look like, research the oil shocks of the 1970’s.
    Jul 12 08:02 am |Rating: +10 -1 |Link to Comment
  • Game Over for U.S. Oil, Natural Gas ETFs? [View article]
    Correction:

    Sure HOPE these opportunities don't go away.
    Jul 08 08:48 am |Rating: +2 -3 |Link to Comment
  • Game Over for U.S. Oil, Natural Gas ETFs? [View article]

    I'm extremely happy with both DXO and DTO. Was in the first for a 100%+ ride and now in the second with current a position at 30%+.

    Sure don't hope these opportunities don't go away.

    RE:
    "The only people who benefit from this scheme are the ETF issuers who collect the fees, and the speculators who actually play the futures markets properly."
    Jul 08 08:41 am |Rating: +4 -2 |Link to Comment
  • Crude Reality: How Long Can Oil Stay Down? [View article]
    "Vast number of tankers full of oil"

    Yes, there are tankers being hired to act as floating storage facilities. How much oil is stored at sea?

    "Oil companies and traders are storing 80 million barrels of crude oil at sea, the most in at least 20 years, according to Jens Martin Jensen, interim chief executive of the management unit of Frontline Ltd., the world's largest supertanker owner."

    This article also states that...

    "The cost of hiring supertankers to collect crude oil from the Middle East jumped as the biggest oil-storage program at sea in at least two decades eliminated the supply of ships available for deliveries."

    Source:
    www.canada.com/calgary...

    So this suggests that the 80 million barrels is just about the maximum tanker storage space available and the cost of leasing these ships are rising.




    So how much is 80 million barrels of crude?

    EIA estimates global demand for 2009 to be about 86 mbd.

    Source:
    uk.reuters.com/article...


    So we see that the "Vast number of tankers full of oil" won't hold enough oil for 1 days' global consumption.

    Sorry - I'm still not convinced that the current "glut" will have a significant impact on price over the next year or two.

    I may be wrong - but then, I may be right.

    I'm long DXO with a 1-2 year planned holding period
    Most of the position was put in place on days oil traded below $40






    On Jan 15 08:58 AM Mmarrkk wrote:

    > Dr. C: look offshore! Vast number of tankers full of oil are sitting
    > on the high seas.
    Jan 15 16:54 pm |Rating: 0 0 |Link to Comment
  • Crude Reality: How Long Can Oil Stay Down? [View article]
    "Massive stockpiles are building up"?

    here's an interesting set of numbers

    at the end of December 2006, the US had a 20.7 day supply of oil on hand
    at the end of December 2007, the US had a 19.0 day supply of oil on hand
    at the end of December 2008, the US had a 21.9 day supply of oil on hand

    these "massive stockpiles" represent just a few days use - they don't seem so big to me now

    source: tonto.eia.doe.gov/dnav...



    Jan 14 22:29 pm |Rating: +3 0 |Link to Comment
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