ValueInvestor

Oil: Supply and Demand? Hardly!

boby,

They don't take delivery. They sell their positions before the last trading day.

koolsool,

Check out any oil sands companies annual report and you'll see that costs aren't as high as they make you beleive. Costs are closer to $50/barrel to extract, not $70 or $90 like some people state.

Have We Reached Peak Oil?

The problem I have with peak oil is that its based on conventional oil production which means nothing IMO. The only thing that should be talked about is total world production. How can people completely disregard unconventional production? It counts for a couple million barrels a day and growing.

I'm not saying it necessarily makes up for the slower production from conventional oil, but disregarding it paints a darker picture than reality.

U.S. Oil Imports at Risk

What do you think refineries are for?

On Jun 11 08:59 AM john s. gordon wrote:

> the venezuelan crude is pretty crappy stuff anyway (sulfur + resid).

U.S. Oil Imports at Risk

A jump of 28,000 bbl/day to Cuba is insignificant when the US imports close to 10 million bbl/day. The big concern would be China. If Venezuela moved all exports to China instead of the US then there would be a problem.

Saudi Arabia has just started production from its giant Khurais oilfield of 1.5 million bbl/day. Saudi Arabia's spare capacity currently stands at approx 4.5 million bbl/day, last seen in 1998-2000 when prices hit the floor. This is more than enough to make up for any shortfalls by Venezuela, Mexico, etc.

We're in a world of "money talks" so if the price is high enough, Saudi Arabia would have no problem turning the tap on and selling as much as possible to the US.

Checking in on Oil's Fundamentals

Cetin, this is from the Russian Economic Development Ministry for 2009. This is booming? Get some actual facts before you spit out more BS.

" Andrei Klepach, a deputy minister, said Russian GDP fell 9.5 percent in the first quarter, and will fall 8.7 percent to 10 percent in the second quarter. He said that the GDP decline in March also equaled 9.5 percent, the RIA Novosti news agency reported. "

"The International Monetary Fund forecast on Wednesday that the decline in the Russian economy in 2009 will increase by 5.3 percentage points to 6 percent, and Russia will see GDP growth of 0.5 percent in 2010, 0.8 percentage points lower than the previous January forecast."


On May 15 10:22 AM Cetin Hakimoglu wrote:

> But the economies of China, India, South America, and Russia are
> still booming.
>
> ----------------------...
> If the economy continues to show signs of weakness, such as the recent
> employment situation reports and retail sales figures, that days
> to cover number is sure to rise. Keep in mind the weakness isn’t
> just here in the U.S.; Europe’s economies are also struggling

Peak Oil as a Function of Earth's Volume

Not likely. While we find new ways to produce these commodities, we also find new ways to search for them. I'm sure there are several elephants we haven't found yet. Heck, Brazil found a few giants offshore in the last 2 years also.


On Apr 28 01:43 PM Chris Uhlir wrote:
> So that was the last big reserve we will ever find!?

Peak Oil as a Function of Earth's Volume

Cetin, open your eyes. Your living in some kind of fantasy world.

Shale isn't in production in a meaningful way yet, nuclear power plants take years to build, and ethanol is a proven joke. There's no way you could produce enough ethanol to offset the gasoline consumption without using the entire USA's corn crop which would mean disaster for food and livestock producers.

So in the 5-10 years it takes to produce all your nuclear plants there could very well be an energy shock.

Besides, how did we get into the last energy debacle? Why didn't your nuclear, ethanol and shale help us out then?

Bespoke's Commodity Snapshot (4/23/09)

These charts mean nothing.

Coming Inflation Is Good for Commodities

I aree 100% with what you said. It reminds me of a quote that couldn't be more true these days where opinion blog after opinion blog run rampant:

"Trust facts, not opinions"


On Apr 22 01:44 AM IronMeteor wrote:

> Guesses and hunches are no subsitute for good research.
>
> If Oil supply is decreasing faster than demand, then why is Oil inventory
> at a 19 yr high. That's not a guess, that a fact.
>
> Why is it so hard to bring supply back online. I understand its not
> a light switch, but I have worked at many energy facilities, it wasn't
> that hard to restart. Maybe a few weeks, certainly not years. But
> why let facts stand in the way of hyberpole. It sounds so much better
> if you make make it sound like it takes decades to restart a rig.
>
> Also, is demand so binary that once recovery comes, we all start
> driving long trips and using a ton of nat gas within weeks. I thought
> this recovery would be slow and take time.
>
> Now here is a genius statement - If the stimulus is successful in
> reviving the U.S. economy, the additional money in the system combined
> with rising consumer optimism will set the stage for an inflationary
> spike
>
> Hey, why not predict Gold will hit $5M tomorrow if the Russians invade
> the US.
>
> Investing is about odds, not guesses. I am not betting on any US
> recovery anytime soon, certainly not the one that the perma bulls
> on Wall St see.
>
> Commodities will climb a wall of worry, but slowly. I bet copper
> hits $3 and nobody even realizes it. Might take 2-5 yrs, but it will
> occur slowly. Thats how real bull markets work, not these ramps to
> the moon. Those are bubbles that deflate. I want an Oil rally that
> climbs $1/month for 5 yrs, not some zoom to the moon that will just
> end in another crash and depression.
>
>
>

Oil Is Years Away from a Meaningful Recovery

Where do people come up with this stuff? The US imports 10 million barrels a DAY. Offshore drilling wouldn't increase domestic production by even 2 million bbl's per day, so where are the other 8 going to come from smartguy?


On Mar 25 10:42 AM Rkveith wrote:

> Lets just ignore Obec. They are worthless. If our country would
> do offshore drilling we won't need to deal with them and our gas
> prices would be low. Our government could control all gas companies
> in the US. Travel by auto would increase. If not cease all driving
> and stay near your home.

Weekly Outlook: Commodities May Be the Last Refuge

I agree with the long/short strategy. Any fund or portfolio thats long only or short only is destined to perform badly in a bull or bear market based on their stance. The long and short option is the only way to take advantage of either type of market.


On Mar 18 04:03 AM Andy Abraham wrote:

> Regardless of inflation or deflation trend followers made money..
> this is really the point...to be a Trend follower...not just say
> a segment of the market will be were the profits will be... Many
> people lost a tremendous amount of money on long only commodity index
> funds... and to the contrary...many investors & CTAs made a tremendous
> amount of money...trendfollowing... no opinion..long short...regardless...
> this is the way to think..

Weekly Outlook: Commodities May Be the Last Refuge

My world is any exchange traded futures or option. OTC items like coal, uranium, steel, etc aren't available so I stay away from them. Basically anything on the Chicago, NY and LME exchanges are fair game.


On Mar 17 11:01 AM fran wrote:

> it depends upon the definition/extent of your world of commodities.
> eg. rogers RICI? fewer commodities than RICI? include coal, uranium,
> steel, moly, rare earths?
>
> first understand the commodities universe before dabbling or investing.
> then decide what form you wish buy--stocks, actual metal, futures,
> etc. it's a big world out there.

Weekly Outlook: Commodities May Be the Last Refuge

I gotta laugh at whoever put a negative for my above comment. Here's a tip:

When ever anything, and I mean anything, trades at an all-time extreme, whether on the upside or downside it won't last for long. Economic forces will always revert it to its mean, so go long aluminum and you'll be happy. It might not happen immediately, but it will happen.

Weekly Outlook: Commodities May Be the Last Refuge

To the author:

You should have a look at aluminum. Its trading near its all-time inflation adjusted low. There isn't a miner in the world making money at these prices. There's no doubt it'll be higher a year from now. Long dated call options should pay off handsomely.

A Brief Look at Commodities: Oil, Copper

You should also be looking at aluminum. Its at all all-time inflation adjusted low. You don't need technical or fundamental indicators to tell you its a no brainer. It doesn't get any easier than that.