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JREwing
146 Comments
Is Oil Bubbling Over?
Dude just get lost! You are nothing but a bum!
Second to the session:
Are you for real??
'it increases the quantity demanded... but not demand.'
That is an increase in demand. When things, people need, are cheaper, they buy more of it.
Go back to economics 101.
CNBC: Sue Herrera Tells It Like It Is
Is Oil Bubbling Over?
Any decrease in price would be met by an increase in demand an therefore offset.
I am shocked by the number of people who seem to be unable to understand the principle of 'supply and demand'.
Record High Crude: Free Markets Meet the Cartel
What has changed in the last month? It is coming increasingly clear that the economy is not falling off a cliff. (thanks to your interventionist friends in the FED, who opened the Money-SPR) And we may even look at a second half recovery.
Compare the Baltic Dry Index with oil.
This 'New Great Game' is the oldest game of geopolitics. Resources are the very reason geopolitics exist, from the Roman Empire over the British Empire and to this very day. What is new about them? May be this game gets tougher, the tighter the supply and demand picture is. But it is not new and speculative money has nothing to do with it.
You are right: We (here in Europe, too) are sending a fortune overseas every day for oil. But please explain to me, how exactly is that problem solved by artificially pushing down prices? IT MAKES IT WORSE, BECAUSE CONSUMERS DO NOT CHANGE THEIR HABITS! When here in Germany a couple of years ago the taxes on energy where hiked enormously (they call it eco-tax) people complained badly. But it had the effect, that more than 50% of all newly built cars are diesel, which are a lot more effective than gasoline driven vehicles.
How do you want to get out of that trap, which you accurately describe, when you want to push down prices and thereby take away every motivation to use oil more effective?? You don't make any sense?
Record High Crude: Free Markets Meet the Cartel
Record High Crude: Free Markets Meet the Cartel
This guy is ridiculous. How can you believe that they have 4 million barrels spare capacity. You have got to be joking.
And by the way. You contradict yourself.
If you really think, the Saudis have 4 million barrels spare capacity. How do you think they are gonna react, when you 'intervene' with the release of oil from the SPR. Let us assume for the moment that you succeed and prices come down. Hmm.. what are the Saudis gonna do?
They are really gonna cut back production and by doing that, they drive the price back up.
YOU JUST DON'T UNDERSTAND ECONOMICS 101! SUPPLY AND DEMAND!
AS SOON AS YOU PROVIDE SUPPLY, THAT NORMALLY WOULD NOT BE IN THE MARKET, SOMEONE ELSE IS GONNA CUT BACK. EITHER OPEC, BECAUSE THEY DON'T LIKE OTHERS MESSING AROUND WITH THEM OR BY LOWER E&P FROM PRIVATE OIL COMPANIES. OR CONSUMPTION WILL GO UP, BECAUSE THE PRICE IS LOWER.
SUPPLY AND DEMAND! YOU GOTTA LOOK THAT UP!
Record High Crude: Free Markets Meet the Cartel
I know that the oil market isn't free. It is people like who are responsible for that.
Every government in the world should leave the energy market alone!
Record High Crude: Free Markets Meet the Cartel
Who gives you the right to do a well timed intervention.
And again: The traders know, that you have to fill the SPR up again, after you released oil into the market. They're gonna whip you and the whole damn thing will have done more harm than good, like any government intervention. Take the FX market. How many times in history did central banks intervene? With each time it had less effect. Once their gun was empty the traders had them by the balls.
When you release oil into the market to keep prices low, oil companies will stop their E&P. When you are an oil baron and every time you get a decent price for your product, you get burnt by the government, you stop investing. Period.
The government thought they could control prices once before, in the 70s.
Now that worked well, didn't it. People had so much time to get to know one another while they stood in line at the gas station. Wasn't that great.
The oil business is one of the riskiest businesses out there. You pay 100 of millions to the government for your tracks and you don't know exactly how much oil is down there and what kind of oil and your daily output. Your exploration costs could exceed your estimates and what not. It is almost like russian roulette.
If the government keeps prices low, they just won't play that game anymore, and speculators are the least of your problems.
Record High Crude: Free Markets Meet the Cartel
They declared an end to the oil rally, I don't know 120 times?
Record High Crude: Free Markets Meet the Cartel
You mean the CNBC guys who ask every day: What is the 'real' price of oil?
Is this financial television or the communist party network.
The real price for WTI is the latest tick for the front month at the NYMEX.
Of course distillates went up the last five weeks. The summer is coming. You only need heating oil for a warm shower. But during the summer, refiners produce mostly gasoline and THEN have to scramble to produce enough heating oil for the winter.
I know, that airlines are one step away from being broke. Nevertheless, they never transported more passengers than 2007. They may be in ruinous competition, but the do a lot business.
There is nothing wrong with being a US citizen.
So let's say, oil sells off to 110$ and you open up the SPR and oil goes down to a 100$. Now that's a very strong often tested support. You have fill the SPR up again, don't you. Traders know that too.
It just wouldn't work.
So you want to drive away speculators. What's next? You're gonna ban short selling, because speculators push down a stock you hold.
What is it with Anti-Free-Market- Guys? As soon as things do not play out the way you thought, you want to change the rules, because you don't like them anymore.
Keeping oil artificially cheap will worsen an already dangerous situation.
Oil has a right to be expensive. It is the greatest natural resource in history. Without it, we are back in the dark ages. And it gets harder and harder to find.
When I listen to oil bears like you, one would think the world is running out of tank farms.
Do you really think, that oil companies around the world spent billions and billions of dollars on new exploration and production and on the enhancement of existing assets, if the supply and demand picture wasn't justifying those huge investments.(Check the revenues of oil service companies and drillers. Where do you think that money comes from?)
If the price of oil would be high just for the fun of it, oil companies would just take the money and don't invest anything. That is obviously not so.
Even if you succeed in cutting the speculation out of the market, the oil companies wouldn't sell for less, or they simply cut back their E&P and prices in the future are going to be that much higher, because the demand that wasn't destroyed by your artificially low prices cannot be justified anymore.
Oil companies need that oil price, or production declines.
Record High Crude: Free Markets Meet the Cartel
There is no one oil. WTI may be up, but Saudi Arabia cut there prices by 2.50$.
The 'Good Stuff' is in short supply.
Record High Crude: Free Markets Meet the Cartel
2. Heating oil demand in the US may be down. But that's in the US. Ever heard that US refiners export heating oil/diesel to Europe, because demand here is high.(more than half of the new cars bought in Germany are diesel)
Ever heard, that China's heating oil/diesel imports are up sixfold?
Yes, gasoline stocks are up. That's why the crack spread is a mess and refiners have terrible earnings.
Airlines in the US have never transported more passengers than in 2007. They just don't make any money.
3. I did not say I do not believe in technicals, did I. I simply don't understand your problem with trading your technicals. Technicals are a fact, and I trade based on them.
4. Nobody forces the US to ship a fortune overseas. When Brazil and countries in Westafrica can find oil in their OCS so can the US. The government just has to open up those areas for drilling.
5. I am not an oil bug. The moment i am convinced that the oil boom is over, I will sell all my RIG, NE, SLB, HAL, OXY, APA, APC, PBR,....
But until that moment I will profit from the very thing YOU are upset about.
And again: The market discounts future events! Remember the last couple of weeks of last year. There were nine or ten big draws in row. That was
frightening. Looks to me, it's gonna get close again.
Another thing: the world is bigger than the US. Looks like the World economy is doing really, really well. The Baltic Dry is up again today.
No offense: But may be You are a little too US centric.
Record High Crude: Free Markets Meet the Cartel
Record High Crude: Free Markets Meet the Cartel
First of all, Sir:
The EIA inventory report was NOT bearish! When you look at the rise in crude supplies, one would think you are right. But you're not!
Refinery utilization is pretty damn low at 85% (Maintenance season before the driving season). Crude imports on the other hand are up. So, now we have to do a little thinkin'. Why would somebody fill up a tanker, send the big guy around the Horn of Africa, unload the stuff in a port in the US and put the stuff in holding tanks, all of which costs a fortune, by the way. (Just take a look at the tanker rates, just in case you don't believe me.) Let me think.. hmmm why would anybody do a silly thing like that??. Uhh yea! Somebody ordered it. Who might have ordered it?
Refineries, yesssssssssss! Refineries order that stuff, because they know driving season is coming. They are gonna need that stuff all the way through the summer.
And guess what, distillate supplies are pretty damn low, too. And distillates give the direction these days. As soon as driving season comes to an end, refineries will have to scramble to make heating oil and diesel.
And now the surprise: The market anticipates all of the above. Men! How about that? A market discounts future events! Now I've seen it all.
Second: The emerging market thing. You got that right. No demand destruction goin' on there. These guys act like a stock-buy-back-program for the oil market.
Third: The price discovery thing.
Why shouldn't a retail investor go long oil? Huh? Why shouldn't a retail investor hedge his very own price risk????? That is perfectly alright. In fact, these are the people who do NOT have to cry out loud for government intervention. Ahh men! I can hardly write that: government intervention. That hurts!
I don't how it is in the US, but here in Germany i can go short oil all the live long day, if I were insane, I mean.
Fourth: The Margin Requirement thing. I'm down with that.
Fifth: Black Box Trading. Why not? I wish I had one!
Sixth: Technical Levels: Fuel for Manipulation?
Where did you go to school, Sir? Every time you buy or sell something you MANIPULATE the market. The only question is: Is the manipulation within the law or not?
If that report really were bearish, it would have sold off massively.
Seventh: Case for Intervention
Sure, US consumers will suffer. In the short run. In the long run, they will buy more efficient cars, companies will buy more efficient trucks, airlines will buy more efficient planes and so on.
That is called progress and it only comes with necessity, not with, oh here it comes again, government intervention. My guess is: In five years the US economy will be stronger than ever, provided we don't get a communist in the White House.
By 'most powerful cartel' I assume you mean OPEC. You couldn't be more wrong. You could try, but you would not be successful. OPEC is absolutely and utterly powerless. When the world was drowning in oil, every member pumped over their quotas. Now they can't produce their quotas, and believe me at these price levels, THEY WANT TO!
Eighth: The SPR.
Holy cow, Sir. You don't mess with the SPR! Never ever! Get that out of your interventionist head, Sir! Because: Once a maniac like Ahmadineshad, or one of a lot of maniacs in charge out there, goes 'Charles Manson', YOU WANT THAT SPR FULL UP!!
'Cause when those 8 million barrels stop shippin' through the Straits of Hormuz, 122 $ oil will look like a goddamn stimulus package.
Ninth: How to Intervene.
You don't!
The only thing the US government should do, is to persuade CHINA, INDIA, BRASIL and a couple of other countries to STOP SUBSIDIZE THEIR PETROLEUM PRODUCTS!
But, all powerful like the market is, sooner or later they will have to stop, because they simply won't be able to afford to subsidize that stuff.
The Oil price wouldn't be a problem, if every government of the world would simply stay out of it. It is that poetry socialist interventionist stuff that messes up markets.
And once again, I extend my invitation, please post articles like this one on Moveon.org. Readers here want to profit from things like the price of oil. DO-GOOD-STUFF belongs somewhere else.
Yours sincerely,
CrossingtheT
Goldman Sachs: Gasoline Not Driving Oil Price
One should never sell the US too short. (Since I am not american i can say that without any patriotic feelings.)
As the author says: We are in a global competition for resources. This competition will not just be decided by economic issues, but also by military power.
That's why the EUR/USD trade was a joke and I am happy to see that bubble deflating. In my opinion it should be the other way around.
There is not one European nation able or willing to secure their trade routes. Their silly diplomatic talk may draw applause by the wimps of the world, but it means nothing - poetry socialists may like it or not.