JREwing

Who's Really to Blame for Rising Oil?

You do have a point.

Toward a U.S. Energy Policy

Hear, hear!

Who's Really to Blame for Rising Oil?

richjoy, it is a joy to read your comments.

Who's Really to Blame for Rising Oil?

e2800's last words: 'Why did those chinamen have to get the same standard of living, we have...?'

Who's Really to Blame for Rising Oil?

Well, at least a bit of improvement over your last article.

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.

U.S. Recovery Could Push Oil Much Higher

dilton_dalton a little market 101.

The market anticipates higher demand and tighter supply. That's why oil prices are rising. When would you like oil prices to go up? When there is one day of supply left?? When you check out the supply data on the EIA website, you can see that there are around 16 million barrels less supply then last year at this time, overall. In Cushing Oklahoma, which is crucial for the price of WTI, supplies declined by a third compared to last year.

See for yourself here:
tonto.eia.doe.gov/oog/...

Other sorts of crude are not as expensive. These are sour sorts(Iran, Saudi Arabia, Venezuela), which more difficult to refine. They have less pricing power.

check this link:
www.bloomberg.com/apps...

Simple fact is: Oil is harder to find, particularly the good stuff.

If it makes you feel any better. It's not just oil.

Take copper for example: Like with oil, it takes years for new capacity to come online. And the good mines are mostly depleted. When you operate a mine with lower grades, you have to extract more material for the same amount of copper. So it costs more. If the market doesn't pay it, it wont be mined. It's as simple as that.

All in all, I think oil is cheap. Think about it: It is the lifeblood of western civilization. With out it we are back in the 1870s. You can't even bring people to a hospital without it. You can't get food on your table. For every calorie of food we spent 10 calories of oil equivalent. You can't take a warm shower.

I think 300 $ would not be outrageous.

Options Trader: Thursday Thumping (for Exxon)

I stick to RIG, SLB , HAL, OXY, APA, APC. Exxon is to big handle small projects and there are no more big projects, at least not for privately held companies. Short the majors, long smaller outfits and deepwater guys.