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ArtfulDodger
94 Comments
What's the Real Story With the Price of Crude Oil?
China doesn't even report how much oil it buys, uses, or stores. The best we can guesstimate over the last five years China has gone from 4.6 million bpd to a little over 6 million bpd. The US uses about 20 million bpd.
How can so many people believe that, all of a sudden, there is a shortage of oil?
Does no one remember the 1970s?
Known reserves (fairly easily retrievable oil) in 1970 were about 560 billion barrels. By 2000 they were over 1 trillion. Eight years later they are about 1.6 trillion.
The world uses somewhere between 75 million bpd and 86 million bpd.
What's the problem? Where's the shortage?
The telling sign that the first major downturn is about to come is that after Goldman Sachs and T. Boone and nearly everyone else you can imagine came on the tube pumping the ppb at $150 & $200, the price has not moved even 5% since then (from $127).
Pickens has been an oil bull since the 70s, and GS always piles on late to get the public in after the momentum players are fully invested.
If the ppb continues to stall, the momentum players will know the public is finally fully invested. There will then be no more money to go in.
So they'll start dumping and the public, which is now buying oil and energy stocks as never before, will get killed—per usual.
That's a view from someone who bought his first stock in 1967 and has been watching the NY crowd run these scams on the public for the last 35 years.
Rebeldog
PS: Iraq has just announced that its latest survey shows that they have another 225 billion barrels in reserve. Thus, add another 225 billion barrels to the World's reserves.
Only These Three Things Can Halt Oil's Advance
Nuts!
I don't blame speculators; they're simply taking advantage of a situation that can make them some money. I don't blame the oil companies either. And I definitely don't blame Bush as all leftists do.
However, I do blame those manipulating the supply figures. Here is where Congress should do its work and stop this thievery.
A very important article reporting the scam going on regarding oil supply and demand was written on SA by Philip Davis, who is a scam exposer extraordinaire.
His is a great and badly needed article! It is a must read for those of you who're able to objectively go over the massive pro-high oil price propaganda put out by the big houses and their touts.
Perma-oil bulls need not apply, for just as nothing would convince Saddam Hussein haters that he was a Toy Tiger, and there was no way to convince the public that the wrong date on a computer had nothing to do with running power grids, and there was no way to convince people that the hundreds of dotcom companies the big houses and their touts were touting had no real income, no cash on hand, and no business plan and thus were really dotbombs waiting to explode, there's no way to convince today's suckers who're convinced the planet is heating up to a boiling point (caused by, of course, burning oil) and that the earth is quickly running out of natural resources such as oil that both are huge shams created respectively by the eco-maniacs and greedy New York shysters who have a huge amount of control over the business news and investing touts.
See here: seekingalpha.com/artic...
Rebeldog
Crude's Rise Is All About Supply and Demand
I don't blame speculators; they're simply taking advantage of a situation that can make them some money. However, I do blame those manipulating the supply figures. Here is where Congress should do its work and stop this thievery.
I don't care who gets the blame, and there are plenty of guilty parties out there, but there is no supply problem.
A very important article reporting the scam going on regarding oil supply and demand was written by Philip Davis, who is a scam exposer extraordinaire.
His is a great and badly needed article! It is a must read for those of you who're able to objectively go over the massive pro-high oil price propaganda put out by the big houses and their touts.
Perma-oil bulls need not apply, for just as nothing would convince Saddam Hussein haters that he was a Toy Tiger, and there was not way to convince the public that the wrong date on a computer had nothing to do with running power grids, and there was no way to convince people that the hundreds of dotcom companies the big houses were touting had no real income, no cash on hand, and no business plan and were really dotbombs waiting to explode, there's no way to convince today's suckers who're convinced the planet is heating up to a boiling point and that the earth is quickly running out of natural resources such as oil that both are huge shams created respectively by eco-maniacs and greedy shysters who have a huge amount of control over the business news and investing touts.
See here: seekingalpha.com/artic...
Rebeldog
Time to Short Oil Due to Excessive Speculation? Think Again
His is a great and badly needed article!
See here: seekingalpha.com/artic...
Rebeldog
The Oil Shortage, and Other Fairy Tales
A great and badly needed article! Thank you very much for your work!
People old enough to remember the scam the big houses and the oil companies pulled on America in the 1970s should never go for letting them con them again.
But I'm afraid that we have thousands of children running hedge funds and mutual funds who weren't even around in the late 90s.
The current oil/energy investing mania reminds me so much of the Y-2-K con and the Dotbomb mania of the late 90s.
At that time you couldn't convince anyone that the date on a computer had nothing to do with controlling grids at power plants. After Greenspan went before Congress and followed along with this nonsense, people would actually fight you if you told them it was foolish to spend money preparing for an event that wasn't going to happen.
The Dotbomb mania speculating was going on at the same time. When you told people that the majority of those companies being touted so highly by Goldman Sachs and the rest of the big houses had no real income, no cash on hand, and no business plan, they gave you a blank stare and went out the next day and paid $150 a share for AOL.
I would ask them, because there was no Google at the time, How are these companies going to get people to go to their web sites? They had no clue and no answer. Just buy and get rich, they believed.
Just as with their preparation for the Y-2-K con, there was no stopping them. The Monday after the first day of 2000 passed and not one negative event happened anywhere in the world, CNN reported that over $700 billion had been spent for nothing.
At the time I believed as I do now that we're living in the "Age of Technology," and have
been since Charles Babbage invented the
first computer in the early 19th Century.
At the time of the Dotbomb investing mania, I had been heavily invested in tech, but when the propaganda got heavier and heavier as the big houses sent their touts out touting stocks selling at never-before-seen ratios and Jim Cramer (on FOX at that time) said "to buy, buy, buy, and keep buying," I sold everything on March 6, 2000, and have my tickets to prove it.
Today, I believe we're in a long-term bull market for hard commodities that may last another 12-18 years, but along the way there will be both short and long-term downturns.
The major downturns will come right after big run ups, just as we've had most recently. Markets are inherently irrational, and what's going on right now in the energy sector is definitely irrational.
Now clearly, markets can remain irrational much longer than reasoning people can imagine, but the longer they run up the harder and faster they fall down; and the more people get hurt by the crash.
The same thing is going to happen in this current oil-buying boom. I think the coming bust out will happen fairly soon—perhaps over the next thirty days. But it doesn't have to.
And as the great Joseph Schumpeter taught us, "The bigger the boom, the bigger the bust."
Those of you who're irreversible oil bulls should at least get ready to bail out as soon as prices start to turn. But I really doubt if many will, for the past tends to repeat itself when it comes to manias such as this one.
Rebeldog
Recent Oil Spike: 'Irrational Exuberance'?
Great article. Prices don't have to follow exactly the route you're showing, but they mostly do.
Certainly, the current oil/energy investing mania reminds me so much of the Y-2-K con and the Dotbomb mania of the late 90s.
At that time you couldn't convince anyone that the date on a computer had nothing to do with controlling grids at power plants. After Greenspan went before Congress and followed along with this nonsense, people would actually fight you if you told them it was foolish to spend money preparing for an event that wasn't going to happen.
The Dotbomb mania speculating was going on at the same time. When you told people that the majority of these companies had no real income, no cash on hand, and no business plan, they gave you a blank stare and went out and paid $150 a share for AOL.
I would ask them, because there was no Google at the time, How are these companies going to get people to go to their web sites? They had no clue and no answer.
Just as with their preparation for the Y-2-K con, there was no stopping them. The Monday after the first day of 2000 passed and not one negative event happened anywhere in the world, CNN reported that over $700 billion had been spent for nothing.
At the time I believed as I do now that we're living in the "Age of Technology," and have been since Charles Babbage invented the first computer. I had been heavily invested in tech, but when the propaganda got heavier and heavier as the big houses sent their touts out touting stocks selling at never-before-seen ratios and Jim Cramer said "to buy, buy, buy, and keep buying," I sold everything on March 6, 2000, and have my tickets to prove it.
Today, I believe we're in a long-term bull market for hard commodities that may last another 12-18 years, but along the way there will be both short and long-term downturns.
Those will come right after big run ups, just as we've had most recently. Markets are inherently irrational, and what's going on right now in the energy sector is definitely irrational.
Now clearly, markets can remain irrational much longer than reasoning people can imagine, but the longer they run up the harder and faster they fall down; and the more people get hurt by the crash.
The same thing is going to happen in this current oil-buying boom. I think it will happen fairly soon—perhaps over the next thirty days.
And as the great Joseph Schumpeter taught us, "The bigger the boom, the bigger the bust."
Those of you who're irreversible oil bulls should at least get ready to bail out as soon as prices start to turn. But I really doubt if many will, for the past tends to repeat itself when it comes to manias such as this one.
Rebeldog
FOMC Minutes Forecast Recession
The Fed says this now, but if the economy does go down further instead of recovering, we'll see the Congress calling Bernanke to the floor, as Barney Frank did last summer, forcing him finally to cut rates last Sept., and the Fed will have to act again.
They've reversed course before rather quickley, and that's when we did not have nearly as interventionist-type Congress as we do now. So I think they'll do it again, if needed.
Rebeldog
PPI Shows Enormous Squeeze on Profits
Rebeldog
Peak Oil and Climate Change: Re-Tooling Transportation
No amount of evidence to the contrary will change the minds of people who believe what they hear without carrying out further unbiased investigation on their own.
I know. I've tried it many times.
So, I simply make this comment without further explanation.
Rebeldog
Oil Bubble? Nope
Refilling Oil Wells
rense.com/general63/re...
Sustainable Oil
wnd.com/news/article.a...
The above two articles tie in well with Gold's "The Deep Hot Biosphere: The Myth of Fossil Fuels."
Rebeldog
Oil Bubble: How Speculation May Contribute to Recent Moves in Oil Prices
Refilling Oil Wells
www.rense.com/general6...
Sustainable Oil
www.wnd.com/news/artic...
The above two articles tie in well with Gold's "The Deep Hot Biosphere: The Myth of Fossil Fuels."
Rebeldog
Oil Bubble: How Speculation May Contribute to Recent Moves in Oil Prices
I appreciate your article very much; it's very informative, particularly for those who're not familiar with futures trading.
I think I am in agreement with you. At least I agree with your title, although your conclusion is somewhat vague.
Here is my view of the world's energy situation.
In 1970, proven world oil reserves were 560 billion barrels.
By 2000, they had almost doubled to over 1 trillion barrels, and output was at 79 million barrels a day, more than 50 percent higher than in the early 1970s.
Today, you can add at least another 600 billion barrels to those reserves due to the very recent report from the US Geological Survey regarding the oil reserves in the Bakken area of North Dakota.
Moreover, both Brazil and China have had large recent discoveries.
Thus, there is no reason that oil prices should stay as high as they currently are. The fact that they are as high as they are is due to the "momentum investing" crowd and their piling on technique of "investing."
These momentum players and their cronies in the media can keep markets irrational much longer than anytime in the past—much longer than most of us could imagine twenty years ago—and that's what we have today.
But when this group and their many followers pull out of a sector, prices crash much, much faster than they rise. And this is especially true with commodities.
Indeed, when they finally move to other sectors, all of a sudden the world will be flush with oil and all hard commodities. It's happened before and it's going to happen again.
Rebeldog
See here for the latest US Geological Survey on the huge oil reserves in the Bakken: energyandcapital.com/s...?...
See US coal reserves here: xist.org/charts/en_coa... (The best estimates I can find about coal is that the US alone has enough in-ground to last at least three-hundred years burning at the rate we’re burning it today.
Lasting even longer should be no problem because we’re inventing more efficient ways to use coal every year.
Once a very dirty source of energy, we’re now burning it cleaner than ever. With technological discoveries taking place nearly every day, the trend for carrying us into more efficient and even cleaner coal usage will continue—barring government intervention.
But that’s the problem. Natural gas and nuclear power concerns have the money and the lobbying power at this point. On top of that, leftist “environmentalists” have blackened coal as an energy source in the world’s eyes.
So instead of turning toward our greatest natural energy resource, we’re moving away from it.
Could nation-building also add to the reason we’re not using our coal and buying energy from other countries?
Jimmy Carterites certainly love buying from poor nations to build them up and that in turn sneakily transfers America's wealth abroad.
The American people hate foreign aid, and high oil prices are a perfect way for the nation-building politicians to covertly send money to the Third World. That's the most obvious reason why there is no real outcry in Congress over the current high prices at the pump. Rebeldog)
Another work that everyone interested in energy should read is Dr. Thomas Gold's writing regarding where oil and coal actually come from: "The Deep Hot Biosphere: The Myth of Fossil Fuels."
Why Investors Worship Old King Coal
this excellent work on where oil and coal actually come from: "The Deep Hot Biosphere: The Myth of Fossil Fuels," by Dr. Thomas Gold.
Rebeldog
Oil Bubble? Nope
Thank you for your retort to my post.
I agree wholly with Jimmy Rogers' view that we are in a long-term commodity bull market. That bull could run for another ten to fifteen years.
I also believe that we've been in a capital investment boom since August 1982; but look what's happened over that time. Indeed, stock prices have increased greatly; but look how many short-term dips long-term lulls there have been. Some have been so bad that much of the public totally deserted stock investing.
The commodity bull will have the same up- and down-swings, and with commodities the down turns can be brutally severe—and quick.
Also, if you've been around as long as I have and you had paid attention to the big brokerage houses when they come on late in a big price run (piling on, as it were) promoting the run up (of anything, not just commodities), you would know that the end of the current run is drawing nigh.
Moreover, if you'll look back to the 90s, this same energy consumption promotion occurred then, and the bust out came and lasted for years.
Yank, this always happens with oil stocks. Indeed, as I noted, the irrationality can last much longer than most reasoning souls can imagine; but at the end of a big run when everyone piles on and decides to go along with the pump boosters, it's very close to being over—but not forever, at least not this time.
And this may be where I haven't made myself clear. I don't by any means believe that the commodity boom is over; but it's soon going to get whacked, and it will crash from where the prices are now (or thereabouts within a short range).
Charles Babbage invented the first computer during the amazing inventive years of 1815-1830. Thus began the "Age of Technology," which we're still in today.
But look at the ups and downs since then. When the tech bubble burst in 2000, I had already sold out of all my techs, but I still believed in tech as the investing path to the future; tech to this day holds excellent investment opportunities. But it went through hell and half of New Jersey before it got back on its feet.
If we've learned anything from our ancestors about investing that we should sear into our minds, it's Joseph Schumpeter's adage, "The bigger the boom, the bigger the bust."
And this definitely goes for this latest hard and fast run in oil prices.
My risk reward ratios show that there is no more than a 15% upward potential, while there is a minimum of a 30% downward potential.
I don't take my numbers lightly, and I'll stand by them, as I have with my investments.
I have exited all oil and commodity stocks, except for Ensco International (ESV), Global Industries (GLBL), Agria Corp. (GRO), and Tech Cominco Ltd. (TCK), and I have moved where the prices are better and there is more potential upside.
Stocks such as ADI, AIB, CF, CSCO, CX, ESEA, GIGM, GLW, GRMN, KHD, LRCX, LYG, MSFT, NAT, NOK, NTE, NTES, NVDA, TSM, & TXN.
Some of these have already run up further than the commodity and energy stocks and the commodities themselves since I've bought them, and they have a lot of upward potential to go, while carrying a very small downside potential, especially when you compare them to energy and commodities. (The exception to that would be CF Industries (CF) which has run from the 90s to about 140 since I bought it.)
I do think that companies such as Tech Cominco Ltd. which has kept excellent margins, is diversified across the energy/commodity board, and thus is worth holding onto through the upcoming storm.
Of course, when the upcoming downturn comes, TCK will get hit too.
So, go ahead if you like, Yank, and hold on to your energy and commodity investments, but hold on tighter to your purse strings when they come bombing down in the near future.
Rebeldog
Oil Bubble? Nope
E.g., there is a "New World Order" in oil. We should be following Jimmy Carter's advice from the late `70s. The world is running out of oil and other resources. There is a population explosion! Peak oil has come and gone.
All I can say is, these children must not have been alive in the 1970s when these shams were first run on us. And the poor soul who thinks we ought not go against Goldman Sachs' advice must be a mere pup and ought to go back and test their tout record before he makes another investment. These people are out for themselves—not the everyday investor. To them we're simply suckers waiting to be fleeced.
There is enough oil to run the world just as we're running it for another 150 years, and there's enough coal to run it for twice that long.
China and India are using only a small amount more today than they were five years ago. Granted, China is buying a lot of hard metals, but they'll over supply themselves before long, and prices will crash.
The jack up in commodities (especially in oil) began when the Bush Administration started beating the war drums to attack Iraq. Next came the take over of Congress by Devilrats who lied and ran to the right of their Republicrat opponents. Oil and gas prices have since more than doubled. (See here for how Senator Chuck Schumer and Congressman Rahm Emanuel ran the 2006 mid-term election campaign for the Devilrats and had their candidates lie their way into office by running to the right of Republicans: www.anncoulter.com/)
Since the above two events took place, oil and all other hard commodities have become the main vein of the Momentum Investing crowd. Wherever there's an ounce of money, there they show up and their cohorts on the "business" shows begin pumping those sectors—repeating over and over their false and phony reasons why oil can't go down and commodities will never sink. At first, you can go in behind the momentum players and make some money, but they always overplay their hand, because they're super greedy and they know the public will buy into their cons.
Don't fall for it at this late stage! The Goldman Sachs call for $200 per barrel oil is indeed the clarion call for experienced investors that the oil boom is nearing its end.
Jim Cramer—who now has a show called Mad Money—at the time of the dotbomb explosion was on FOX, where he pumped tech stocks right up to the first bust out day: March 10, 2000. He has moved away—slightly—from his pump and dump past, but he's a good example of how the financial media promote high-priced, high-debt-to-equity stocks to the public.
These momentum players and their cronies in the media can keep markets irrational much longer than anytime in the past—much longer than most of us usually think—and that's what we have today. But when they pull out, prices crash much, much faster than they rise.
Indeed, when they finally move to other sectors, all of a sudden the world will be flush with oil and all hard commodities. It's happened before and it's going to happen again. They don't vary their gameplan too much, because the public keeps going for it over and over.
People listening to this we’re-running-out-of-o... nonsense and this “peak oil” has passed blather will get murdered, just as those who listened to the dotbomb promoters who got on TV and pumped companies that had no money and no earnings and no business plan got killed. I figure about sometime mid-summer or perhaps even sooner we'll see the energy play bust out—soon thereafter will come the commodity dive.
Those of you falling for this trite better move your money elsewhere unless you want to end up like the millions who thought the Internet and anything connected with it was the end all to making money. Invest in sectors that these con artists are not in, and you'll be better off.
And pour a full bottle of salt down with every bite you take from the financial media. Promise yourself that under no circumstances will you buy anything that these promoters mention—you’ll thank yourself later on if you do that.
Rebeldog
See here for the latest US Geological Survey on the huge oil reserves in the Bakken: energyandcapital.com/s...?...
See also "What Energy Crisis?" by Daniel Yergin
See this excellent work on where oil and coal actually come from: "The Deep Hot Biosphere: The Myth of Fossil Fuels," by Dr. Thomas Gold
See coal reserves here: xist.org/charts/en_coa... (The best estimates I can find about coal is that the US alone has enough in-ground to last at least three-hundred years burning at the rate we’re burning it today. Lasting even longer will be no problem because we’re inventing more efficient ways to use coal every year. Once a very dirty source of energy, we’re now burning it cleaner than ever. With technological discoveries taking place nearly every day, the trend for carrying us into more efficient and even cleaner coal usage will continue—barring government intervention.
But that’s the problem. Natural gas and nuclear power concerns have the money and the lobbying power at this point. On top of that, leftist “environmentalists” have blackened coal as an energy source in the world’s eyes. So instead of turning toward our greatest natural energy resource, we’re moving away from it.
Could nation-building also add to the reason we’re not using our coal and buying energy from other countries? Jimmy Carterites certainly love buying from poor nations to build them up and that in turn sneakily transfers America's wealth abroad. The American people hate foreign aid, and high oil prices are a perfect way for the nation-building politicians to covertly send money to the Third World. Rebeldog)