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JREwing
146 Comments
Drivers Are Feeling the Pinch
Who's Really to Blame for Rising Oil?
Drivers Are Feeling the Pinch
An Energy Policy That Makes Sense, Revisited
Second:The two Peak oil and anti Peak oil warriors (just kidding) up there.
Brian Pursley: You can't pump the same barrel twice. Once a resorvoir has hit its peak, it has hit its peak. Sorry man, that's how it is. To paint a picture: It's like takin' a leak. The emptier your bladder gets, the less pressure (you know daily production).
Fitz: While it is difficult to produce UDW subs-salt reservoirs, it obviously not impossible. There are producing wells and I doubt that oil companies would spend a fortune on UDW projects, if there was no chance in hell for success. 20 years from now no one would have dreamed of developing such fields.
Everything works out as it should: High prices constrain demand growth and enable oil companies to develop new reserves.
The End of OPEC
This is what must have been going on in Hitlers bunker close to the end.
The Sowjets are on top of the bunker, but we still talk about 'Endsieg'. CRAZY!
Folks just can't believe, that times change. 'Because it cannot be, what we don't want to happen!'
The rules of Evolution apply to everyone, not just flora and fauna but people and societies, too.
YOU EITHER ADAPT TO A CHANGING ENVIRONMENT OR YOU GO UNDER!
While we may not die, like an animal in the wilds, we will get a lot poorer, if we don't adapt.
It is fascinating. People, most of all in the business world, try to be so dynamic, they run around with their blackberries beeping and what not, but when it comes to oil they are completely baffled. It's like getting a baby from milk to solid food.
I don't understand, what's so complicated?
If the price of fuel goes up, people demand cars with better fuel economy.
It is already happening. Who would have thought, that Daimler could sell 2500 Smart Cars (here in Germany we call them ELEPHANT-ROLLER SKATES) a month in the US?
The market works. People will stop driving V8s with 25 year old engine technology and drive 6 cylinder turbo diesels instead. It took these oil prices for BMW to invent a device, that automatically stops your engine when you come to a standstill at a red light or in a traffic jam and automatically restarts the engine once you touch the gas pedal, which saves a significant amount of fuel.
The market works. The higher fuel prices get - and they will get higher
(Someone has yet to tell me one logical reason, why the per capita oil consumption in countries like China or India will be a fraction of that in the OECD countries until the end of time)- the more efficient the use of it will become.
Their per capita oil consumption will go up. Ours will come down.
The End of OPEC
I think OPEC pretty much got annihilated with Ronald Reagan taking power. He sent his CIA Boss 'Wild Bill' to Saudi Arabia, who suggested to the Sauds, that it would be cool if they flood the world with oil in order to make Russian crude worth less. In exchange he promised, that the US would stand behind the House of Saud until Kingdom come, no pun intended. That little deal won the cold war by bankrupting the Sowjets, and demonstrated to the communists of the world, that money has more firepower than all russian tanks together.
That may have won the Cold War, but it pissed off the rest of OPEC. So they didn't give a damn about their quotas and produced as much as they could, because let's face it: Most OPEC members are ruled by horrible people who need every dime of oil revenue in order to stay in power. They are so badly in need of money, that they even neglect the infrastructure, that brings them the revenue; just take a look at Iran or Venezuela.
That's why all the way through the 80s and 90s oil was cheaper than dirt. Come on, Diet Coke is more expensive than oil. And I'm not sure which of the two tastes worse.
artificially low prices over a long period of time + underinvestment in oil infrastructure + additional demand from the emerging world = NORMAL PRICES
Drivers Are Feeling the Pinch
Can Investors Still Rely on a Stock's P/E Ratio?
But I don't think one can compare the P/E of "stuff" stocks to their historical averages, because never in history did we have economic growth in virtually all parts of the world. To be more precise. Up until now the only economies worth considering were the OECD countries. Last time I checked they didn't have half the population of CHINA, INDIA and BRAZIL and their neighboring countries.
Looks to me that 'stuff' stocks are going to raise their average E quite a bit.
The Infantilization of Markets
I never understood, why the market pounded so much money into the EURO. We obviously live in a time, where the real money is made by commodity producers. Looking at the EURO chart, you would think the EURO-zone is the biggest exporter of oil and other commodities on the planet. Instead, it doesn't even have a positive trade balance.
Drivers Are Feeling the Pinch
Lower prices mean more demand. More demand means higher prices.
Who's Really to Blame for Rising Oil?
First, considering, that the only thing you read for at least two years, is: Oil is a bubble - there is no reason for oil to be that high- blablabla..
so, considering this makes it almost impossible for oil to be a bubble.
Dude, I am not that old, but come on..
'Somalia is the latest to join the growing list of African countries where rising food prices have led to violence.'
Are you serious, man? I can't remember a time, where there was no violence in Somalia.
The reason for the rice shortage in Asia is that there are price controls in place. Come on, when you are a rice farmer, you not gonna sell your product for the set price. You want to sell it for the maximum. When you don't get the maximum, you sit on it. Field work is pretty exhausting, those guys really deserve a decent price for their product.
Another great example, why governments should not interfere in the economy.
Or like Jim Rogers put it in a German newspaper interview: How many of your college buddies are farmers? None huh? That's because being a farmer sucked for the last 30 or 40 years.
Just as almost every raw-material and energy business sucked for the last 25 to 30 years. Looks like they are gonna be great for the next 25 or 30 years.
About this oil inventory data last week. It was not bearish, it was BULLISH.
Even if most folks don't get it.
I will try to explain again, because it is Sunday and I am bored.
1. Inventories may have been up, but they are still lower than last year.
2. Imports where up compared to last week.
3.(important part) Refinery utilization was a very low 85%
Hmmmm. The simpler minds among us may think: Why the hell goes oil up when inventories are up and refineries don't work as much?
Here it comes: Refiners know that driving season is coming (and yes: this year again people will drive across the country and visit folks and stuff), so they try to get there refineries in good shape. That's why refinery utilization is down now. But imports are up. Why is that? No it's not for fun. Refiners order that oil, because they know they need that during driving season.
And on top of that: Distillates inventories are really low and demand around the world is very strong. Seems more and more vehicles around the world a diesel powered. The Goldman guy explained that pretty good last week: Gasoline is not the most important factor anymore. (Yes things change.)
About your oil company jealousy.
First, when you are convinced that the oil majors are practically printing money. Why don't get a piece of that action by investing in them?
Second, did you even look at their earnings? If you did, you would know, that their downstream business (the one that ends at the pump) sucks and the consumer doesn't pay as much for gas as the oil companies would like. Their input costs (oil) rose faster than the price of gas.
So consumers are raging mad. Here is what consumers really should do, because cutting back on stuff like you are suggesting sucks:
Invest in the companies, who profit the most from high prices for all the stuff you mentioned.
I am thinkin' about a BHP, RTP, RIO, ADM , POT, MOS, OXY, APA, APC, RIG, NE, SLB, HAL,...........
Lots of money to be made.
A Look at Earnings from Transocean and Devon
Commodities: Bubble or Not?
All those above, who call this a bubble based on the supply and demand of the last few weeks, have no idea whatsoever of how the oil markets works, how refineries work. Why and when they do their maintenance. And why they buy oil now, while they are doin' maintenance. Because fellas, when driving season is underway 125$ will be bargain.
Since markets discount future events, it is not surprising that oil goes up.
What is surprising is the extent of the move. May be they take 10 bucks of the price next week, who knows.
But the general trend is justified.
To all who complain about the price of oil. You all do still fill up your cars and heat your homes do you. So, it can't be too expensive.
And: The world is bigger than the United States. As in the Goldman&Sachs piece: gasoline is no longer the dominating factor in oil.
Commodities: Bubble or Not?
Record High Crude: Free Markets Meet the Cartel
Ah. This sure is a touching story. One that I will remember for years to come.
And by telling me that story, you proved me right.
Question: Is there any law in the United States of America, that forbids you to invest in the capital markets.
I will give you the answer myself: No, there is not. There are even government programs, designed to help plain folks to do that very thing.
You correctly state, that the United States of America was created by the American Revolution and you give the correct reasons for that revolution.
The heroes of the American Revolution will be remembered for centuries to come. But you know what. You wouldn't have been one of them, because they took their live in their own hands by basically giving the King the finger.
You would have needed a BIG GOVERNMENT to do that. People like you want to create the very thing the founding fathers sought to prevent.
A disconnected government in a distant capital, that intrudes in all aspects of living, in order for you to be treated justly. If thats not socialist, than you need to look that up i dictionary.
If you would spent a little less time on your self pity, a little less time on watching stupid car races or American idol, and a little more time on gathering information on where to invest, you might actually be able to achieve something for yourself and your kids, without depending on some government.
But you will not do that, because you rather blame Bush or Dick Cheney or Obama and Clinton or McCain in the future. It is always others who have to do stuff for you, because you think your duty is done by going to work and take care of your children.
On the other hand: I really don't care if there are price controls on gasoline
in the United States. Since you import 60% of your crude, you will have to settle for the 40% you produce yourself, because others around the world are willing to pay market price and they don't care if you feel treated unjustly.
You are a funny guy and remarkably shortsighted.