Tmalan's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/219537/comments http://seekingalpha.com/article/87263/comments?source=feed#comment-215704 215704 Pseudonym

Even if oil reaches to $100, you will not see cheap gas any time soon if ever again. Refineries have been eating a lot of the oil price on their side and the lower oil price will just bring their cost back in line. $3 + gas is probably here for a while. So, I do not see a mass return of gas guzzling SUV driving.

However, if oil reaches back down around $75 and STAY there, you may see gas drop to below the $3 mark.]]> Sun, 27 Jul 2008 12:34:22 -0400 Pseudonym

Even if oil reaches to $100, you will not see cheap gas any time soon if ever again. Refineries have been eating a lot of the oil price on their side and the lower oil price will just bring their cost back in line. $3 + gas is probably here for a while. So, I do not see a mass return of gas guzzling SUV driving.

However, if oil reaches back down around $75 and STAY there, you may see gas drop to below the $3 mark.]]> http://seekingalpha.com/article/87187/comments?source=feed#comment-215482 215482
So, it can be argued that oil is trying to find a "true value" in the marketplace. This would be a price that did not transfer a large amount into inflation and created demand destruction without it being so drastic.

There are many handicaps with oil finding it's true value since countries like China subsidies and how slow companies are to increase prices due to raw inventory costs. So anytime you have a quick run up in oil price, the true effect is buffered and slowed. It would be better if the price of oil gradually increased over time so as to be able to better see the effect of the price increase.

Also, inventories of oil thinning out would be an effect of over value. You would not keep the normal amount of inventory of anything if you felt the price was to high and would come down fairly quickly. This would be like filling your gas tank up full and then the next day the price at the pump drops 5 or 10 cents. I do not know about you, but since oil has been dropping back, I have only been putting about 5 gallons at a time in my tank instead of filling it up.]]> Sun, 27 Jul 2008 09:18:43 -0400
So, it can be argued that oil is trying to find a "true value" in the marketplace. This would be a price that did not transfer a large amount into inflation and created demand destruction without it being so drastic.

There are many handicaps with oil finding it's true value since countries like China subsidies and how slow companies are to increase prices due to raw inventory costs. So anytime you have a quick run up in oil price, the true effect is buffered and slowed. It would be better if the price of oil gradually increased over time so as to be able to better see the effect of the price increase.

Also, inventories of oil thinning out would be an effect of over value. You would not keep the normal amount of inventory of anything if you felt the price was to high and would come down fairly quickly. This would be like filling your gas tank up full and then the next day the price at the pump drops 5 or 10 cents. I do not know about you, but since oil has been dropping back, I have only been putting about 5 gallons at a time in my tank instead of filling it up.]]> http://seekingalpha.com/article/85553/comments?source=feed#comment-208176 208176 Thu, 17 Jul 2008 19:26:43 -0400 http://seekingalpha.com/article/85039/comments?source=feed#comment-206518 206518
That is, since oil effects the cost and inflation of almost all products and services, the real cash value decreases on returns since the dollar value declines. I mean, I can not pay my house payment or go out and pay for my hdtv with oil(at least not yet). So, money has to have some real value against oil and other commodities and can not sustain a continued loss against them.

So basically, piling investment money into commodities that are the bases for an economy creates no real capital and can only be a temporary profit.

These investment firms either know this and will pull out at some point, or they are stupid as hell.

Also, if you think that changing currencies to the Euro would make a difference, It might for a while. But, any economy that uses oil and other commodities will eventually lose true value up against continued price increases on the commodities.]]> Tue, 15 Jul 2008 21:56:49 -0400
That is, since oil effects the cost and inflation of almost all products and services, the real cash value decreases on returns since the dollar value declines. I mean, I can not pay my house payment or go out and pay for my hdtv with oil(at least not yet). So, money has to have some real value against oil and other commodities and can not sustain a continued loss against them.

So basically, piling investment money into commodities that are the bases for an economy creates no real capital and can only be a temporary profit.

These investment firms either know this and will pull out at some point, or they are stupid as hell.

Also, if you think that changing currencies to the Euro would make a difference, It might for a while. But, any economy that uses oil and other commodities will eventually lose true value up against continued price increases on the commodities.]]> http://seekingalpha.com/article/84739/comments?source=feed#comment-204578 204578
That is exactly the problem. Demand data can be measured very accurately, however actual real supply can be ambiguous.
The supply chain has to many hands in the pot making the data inaccurate and left to opinion.

"if there is at some point more speculation on the short side then this can push the spot price down."

As soon as this starts to happen, a fresh new round of BS propaganda comes from the Middle East to bait investors back. There is no doubt in my mind that the Axis of Oil are cashing in on the over valued price and will do everything they can to keep that extra money coming in.]]> Sun, 13 Jul 2008 16:33:47 -0400
That is exactly the problem. Demand data can be measured very accurately, however actual real supply can be ambiguous.
The supply chain has to many hands in the pot making the data inaccurate and left to opinion.

"if there is at some point more speculation on the short side then this can push the spot price down."

As soon as this starts to happen, a fresh new round of BS propaganda comes from the Middle East to bait investors back. There is no doubt in my mind that the Axis of Oil are cashing in on the over valued price and will do everything they can to keep that extra money coming in.]]> http://seekingalpha.com/article/84617/comments?source=feed#comment-203366 203366
The Axis of oil have the ability to control supply. As demand continues to drop, they can enviably produce less to keep inventory tight. How would anyone know the difference in taking less out of an oil field in order to control what is taken out vs the oil field going towards the end of the fields capacity? Who oversees this? Are they allowed to go into countries like Iran and do oil field checks?

There is too much uncertainty in the market and it is being driven by fear not facts. Yes, I do agree that demand has increased and will continue to increase provided the price comes back down to earth. However, the supply side is the uncertain variable with what seems like unlimited opinions on the subject.

This is why opening up the SPR and increasing the dollar with a rate increase will diffuse the fear and bring back stability to the market. I also agree that this should preclude opening up more offshore/Alaskan drilling for future supply streams.

The combination of these elements would remove the fear, remove incentives for propaganda, and remove the index long calendar investor who no longer would see the potential for profit.

Normal speculators then could come back into the picture and perform their normal futures trading to hedge on normal trade price fluctuations. ]]> Fri, 11 Jul 2008 18:22:59 -0400
The Axis of oil have the ability to control supply. As demand continues to drop, they can enviably produce less to keep inventory tight. How would anyone know the difference in taking less out of an oil field in order to control what is taken out vs the oil field going towards the end of the fields capacity? Who oversees this? Are they allowed to go into countries like Iran and do oil field checks?

There is too much uncertainty in the market and it is being driven by fear not facts. Yes, I do agree that demand has increased and will continue to increase provided the price comes back down to earth. However, the supply side is the uncertain variable with what seems like unlimited opinions on the subject.

This is why opening up the SPR and increasing the dollar with a rate increase will diffuse the fear and bring back stability to the market. I also agree that this should preclude opening up more offshore/Alaskan drilling for future supply streams.

The combination of these elements would remove the fear, remove incentives for propaganda, and remove the index long calendar investor who no longer would see the potential for profit.

Normal speculators then could come back into the picture and perform their normal futures trading to hedge on normal trade price fluctuations. ]]> http://seekingalpha.com/article/84617/comments?source=feed#comment-203351 203351
Can you explain this a little better? I do not understand how they can trade against Iran directly in an Oil futures market. From what I understand, producers (which I believe would be OPEC here) do not lose any money on futures. They break even when the future expires when in contango or selling on spot market when in backwardation. Either way it is a net sum in the difference in price.

They would however, make profit from the delivery price vs the cost of producing, storing, and/or shipping the oil when that difference is positive for them. Am I mistaken?]]> Fri, 11 Jul 2008 17:37:23 -0400
Can you explain this a little better? I do not understand how they can trade against Iran directly in an Oil futures market. From what I understand, producers (which I believe would be OPEC here) do not lose any money on futures. They break even when the future expires when in contango or selling on spot market when in backwardation. Either way it is a net sum in the difference in price.

They would however, make profit from the delivery price vs the cost of producing, storing, and/or shipping the oil when that difference is positive for them. Am I mistaken?]]> http://seekingalpha.com/article/83429/comments?source=feed#comment-197298 197298
I guess your saying that being on the verge a bear market has nothing to do with it. Kind of like saying a man is sinking when the ship he is in is what is sinking.]]> Wed, 02 Jul 2008 12:20:06 -0400
I guess your saying that being on the verge a bear market has nothing to do with it. Kind of like saying a man is sinking when the ship he is in is what is sinking.]]> http://seekingalpha.com/article/83546/comments?source=feed#comment-197168 197168 Wed, 02 Jul 2008 10:19:05 -0400 http://seekingalpha.com/article/83468/comments?source=feed#comment-197138 197138 Wed, 02 Jul 2008 09:59:39 -0400 http://seekingalpha.com/article/83104/comments?source=feed#comment-195613 195613
The thing that concerns me is how much control oil producers seem to have right now. Please tell me if I am incorrect in deriving my conclusion, but it seems to me if you have so many future contracts bought ahead of time, you have a fairly accurate picture of how much you need to produce to meet those contracts. Then adding the fact you can get real time physical demand information allows you to control the supply. This allows the producer to have tighter inventories thus fueling the "tight supply" psychology. I think that there is evidence of this when Libya made their announcement that they may cut production. Why would they do that if there is such a high demand? Retaliation or not, you would not do this if you were making major $$ on what you are producing. Seems more logical to suck money from America if the demand was there. The only conclusion is to keep inventories from building so that they can keep prices from falling.]]> Mon, 30 Jun 2008 00:01:44 -0400
The thing that concerns me is how much control oil producers seem to have right now. Please tell me if I am incorrect in deriving my conclusion, but it seems to me if you have so many future contracts bought ahead of time, you have a fairly accurate picture of how much you need to produce to meet those contracts. Then adding the fact you can get real time physical demand information allows you to control the supply. This allows the producer to have tighter inventories thus fueling the "tight supply" psychology. I think that there is evidence of this when Libya made their announcement that they may cut production. Why would they do that if there is such a high demand? Retaliation or not, you would not do this if you were making major $$ on what you are producing. Seems more logical to suck money from America if the demand was there. The only conclusion is to keep inventories from building so that they can keep prices from falling.]]>