Marcus Aurelius

OPEC: Too Little, Too Late

Ishortyou, you represent only you. I am not buying a car because we have the two we need, I buy used, and grew up in a household that runs the wheels off of their cars. When the wheels fall of one of our cars we will buy another gasoline powered vehicle, unless the alternative is both practical and affordable. Right now, alternatives are neither.

I believe the oil rally of summer '08 was a tech/speculative rally. The situation was like a spring with a lot of tension, when it lets go it recoils and does not stop until it is way past its natural point of equilibrium.

Where are we in relation to the equilibrium point? Well US oil stocks are high in relation to the five year average and dropped only by a little bit in the last week or so and we have Thunder Horse ramping up to be in full production within two years. However, we do have the economic downturn going on. My wife's nephew is a sailor and tells us six of his company's ships are docked - not enough material coming from China to the US.

Right now we are still above equilibrium, but when economies starting recovering watch out.

OPEC to Cut Production at Friday Meeting, but Will Prices React?

OPEC is a cartel and they collude, how are we going to stop that?

Anyway, I think oil is getting close to finding a bottom, some analysts think with or without OPEC cutbacks, oil is overshooting its bottom right now and $70.00/barrel is about equilibrium. However, with the all the FUD about the future & the global economy, I expect to see demand die off and bring down oil prices.

The last time gasoline was at or under $1.00/gallon was when the Southeast Asian currency meltdown was underway.

Events in Russia Could Push U.S. Toward a Clearer Energy Policy

AlexS,

If you want something resembling numbers go & read John Ryden at www.examiner.com/x-325...

He wrote an article here some months ago on Oshkosh Truck's new electric drive truck and the ultra-capacitor technology the trucks have. He analyzed the energy plans of both candidates with numbers and finds they are long on promise but short on delivery.

Oil Price Targets

I have taken to reading INO.com & the Trader's Blog, these guys are technical investors and rely on trends. They are not going to be the first ones to pick up on a market move.

In fact, back in June or so Adam said his methodology was telling him to short oil and the very next day shorts were wrong and in a big way. He then came on and freely admitted he was wrong about oil's move, and went onto to note no system is foolproof. I think a fair amount of the people out there are technical investors.

After all, "the trend is your friend" is not some piece of wise insight, its common knowledge.

Oil Price Targets

Valueinvester,

Cam Hui in this column is looking smart: seekingalpha.com/artic...

In the article he speculates oil will hit $100/barrel before it hits $150. At the time oil was setting records at $147.00/barrle.

Even the Gas Crisis Needs a Culprit

redbaron, Nice sentiment but it runs smack into its own wall of the real world. Two people can look at the same facts and figures and come up with different actions to solve the problem, then we have to decide which course to take, how do we do that through politics.

High energy prices are a problem and we have differing views on how to deal with them. The Democrats I think want to say "leave 'em high in order to spur conservation & innovation in alternative energy" but they know that will not sit very well with the public, so they find a convenient scapegoat, as we see that is strong medicine that is going to rough up the patient before the patient gets well. The Republicans (disclosure this is my side) want to ease the immediate pain of high energy this will lead to ease short term pain, but seem to have an overconfidence in our ability to quickly solve the problem which the Democrats seem to have as well.

Can Saudi Arabia Push Down the Price of Oil?

The Italian plan is little more than a dog chasing its tail. It will not be long before consumers will be right back where they were.

This also goes for proposals for gas tax holidays and the like.

What Can the Saudis Do to Bring Down Oil Prices?

There are a number of reasons the Saudis may want to bring oil prices down. They need to eat and drink too, high energy costs are making it more expensive to do that.

Also, they want to avoid demand destruction. Right now energy prices have us here in the States doing more than just talking about getting off of oil (e.g. GM's minimizing its production of light/consumer trucks). If by some miracle we come up with a different & practical source of energy (e.g. If LS9's diesel excreting microbe pans out on a large scale) then Saudi is sitting on a worthless product. What then are they going to do to earn what they need?

If they pump it out too fast the future has nothing, hold onto to much of it the future may still have nothing but goo.

Economics of Oil Futures Trading, Part II

You don't get consumers to use less gas by raising prices, you get consumers to consume less by putting out PSAs to tell them to stop consuming! I think the Energy Squirrel character is especially compelling!