SeekingTruth

The Slippery Truth About Oil Price

The Saudi's have done a self serving brilliant job in keeping oil in their preferred price range of $75 to $80. Now that's power baby!

We in America are still too distracted with our own home grown and practiced ideology and political fights to make any where near enough progress with a non existent energy policy, and we desperately need an energy policy.
That means that our future is basically in their (OPEC) hands , and not our own , except to the extent that we can make things even worse than they are if we fail to act which is well past due.

If we take the "conservative" position of not fixing anything if it ain't broke (even though it is surely about to break), and wait until it fully breaks like our bridges , dams , and dikes, and financial system, it will be far too late to avoid the massive privation and suffering that is quickly becoming baked into our national cake, and we shall surely be forced to eat our own cooking.

Better that we plan , prepare, initiate, and implement an energy policy even if it earns the scorned term of "liberal progressives" by the right wing.
If we fail to do this , the price we pay (and are paying) wil be 100's of times greater than more intelligent action would cost.
If you don't believe me , just ask TVA and Lehman Bros.

Stephen Schork: More Upside in Oil

Well, sorta,

OPEC would settle for $50 oil any day, yes, but they prefer the upper end of their sweet spot range of 60 to 80 dollars a barrel ($75 to $80 target), and that is exactly what they are getting.

(We don't have to be oil "experts" to know this).

Revival of the Petrodollar Recycling Machine

EUARTE: I have no doubt that you are correct, which means that the envoys are "double dippers" , being bought off by both sides of the trade.

The Saudi Royal Family are the true rulers of the world. Frontline proved this to my satisfaction.

Revival of the Petrodollar Recycling Machine

Another clue as to why we have no energy policy (even after 35+ years to develop one), and probably why we will never get one when this is added to a lot of other things.
We the people continue to be dragged behind the pickup truck driven by the powers that be that find it all too easy to siphon off their large "management fees" and stealth money laundering advantages.
If anyone has any suggestions, please speak up, because things are getting really depressing.

Oil's Up and Down Ride

My assessment is that we are at the upper end of the $50 to $80 price range that the Big Guns (Saudi's & domestic oil powers) would like to keep oil for as long as possible.
Naturally they would prefer the upper part of the range, and that is exactly what they have got.

This means to me that oil will be very slippery (up and down) between 65 and 80 dollars, and only greater than expected economic weakness will drive it down into the lower part of the range, and only an irrefutable Depression will drive it down to the recent lows or lower.
In other words, if one is waitng to buy on dips, $65 would make a good first nibble point, and $50 would be excellent.
There is always the danger that excessive speculative demand could drive the price up to who knows where short term , but the producer comfort zone is $50 to $80 bbl., and their forces will be applied to keep it there, with $75 being their current preferred price.
How do I know this? : The Saudi oil minister and T. Boone Pickens told us so in Feb. 2009 - check it out.

The Energy Markets According to Stupak

Brad, what instrument typically generates the interest payments, and how "secure" are they?
There are so many more arcane variables here than meets the eye, that many real world examples would have to be illustrated for the layman to grasp this all in depth. But you have given a good definition for those already familiar with the nuances of these techniques.
I believe that at certain times, under certain conditions , speculation can have a tremendous and disruptive effect on the markets, i.e. certain people get filthy rich very quickly and others are sent to the poor house for reasons that have little to do with the consumption element of demand (or legitimate hedging or investment either), and some rational rules for better keeping orderly markets are wise, and necessary.
Stupak is making an effort to determine what these rules should be, and with the help of some honest experts, maybe he can accomplish something. He has my best wishes for this daunting task.

How Institutions Manipulate the Price of Oil

I found the article on GS astonishing, even though I was generally aware of most of it.
Yes, in too many respects we live in a gangster state, and the fate of the typical citizen is up for grabs. So, where do we go from here? Not encouraging to say the least.

How Institutions Manipulate the Price of Oil

The conventional academics will not like your comments and data relating to speculation in the oil markets, but I do!! Mainly because I think they come closest to representing the truth.

Excellent work, and thanks for your fine efforts.

Checking in on Oil's Fundamentals

Dr. Leeb has presented the rational argument for moderating oil prices.
Question is: Do we have to wait thru the driving/touring season for that to happen?
In general , tourism is down due to swine flu threats, and weak economy, so less than cutomary support there, so maybe not.
Agree that many oil stocks got ahead of themselves in the short term based on the big picture.

Yeah, Still More Oil, But...

Nice summary and usefull data.

Seasonalities and technicals pushing prices up.
Inventories still a restraining factor, but less so with each passing week.
Gasoline moving to over 2 dollars a gallon will get people 's attention , but will not force the gas hogs off the road like 4+ dollar gas did.
Looks like we are stuck in the $50's range for quite a while. Even so some of the major's look overbought to me and Apache,DVN, etc. have outdone themselves in the short term.

There's Plenty of Oil, For Now

Well done.

Cacophony in the Oil Market

In my prior comment to this article, I was not referring to purely oil "SERVICE " companies like RIG and NOV, although I can see looking back how this may have been misinterpreted relative to what I intended. They very well could be great buys , not only now but most probably for the intermediate future.
I was referrring to large flagship Oil "Producing" companies over the "next quarter or two", like XOM , which has a reported PEG of 2.0, and APA which has a PEG of 1.71, and OXY = 1.61. I also indicated "etc" which meant that there is always much more to consider .
I was also careful to point out parenthetically that for this one metric, (NOT ALL ) the oil producers had high PEG's , and even so this one metric was only used as an example, nothing more.

But , in any case , thanks for the encouragement to get closer to reality, it is something I constantly strive to do, however imperfectly.

Cacophony in the Oil Market

In answer to your last question:

Not really. We are in a Depression and unemployment levels have just not caught up to the facts yet, but they will. The stimulus package will let us down "less hard", and that's good, but it will not solve our fundamental ingrained problems.

More factories, malls, will shut down, fewer long range driving miles, throw in a little conservation etc., reducing oil demand for at least two quarters and perhaps much longer.

Short of massive supply disruptions due to hostile acts, and resulting panic buying, demand will also be under downward pressure for first half of 2009, perhaps longer "if" OPEC cheats too much on their supply cuts ( a true wild card).

Falling Spot Oil prices,and Oil Co. stock prices are reflecting and discounting this quite accurately as I see it (finally, for a change).
A broad stock market rally would buoy up oil stock prices to a degree, and for awhile, but would also make them more vulnerable to sharp corrections later if oil demand does not also support.

"Most" (not all) Oil stocks are overpriced at these and lower oil
prices (PEG, etc.). But as always, this is a fickle market , so never any guarantees, but that appears to be the way to bet (cautiously)for the next quarter or two at least, as I see things.

Other views welcome, it's a fascinating market.

Back to the Future for U.S. Oil Refiners

The key phrase in Adam Smith's theory to me is :

" Low prices will be charged in order to undercut competitors".

Well, maybe yes, maybe no , sometimes yes , sometimes no.
This statement and claim is much more complicated than it first appears.
If the subject industry is in oligopololy or in cartel , this is far less inclined to be true, and even if they are not, collusion thru "smoke signals" and other types of price collusion can often take place.

In an ideal world, Adam might have a chance , and perhaps be relied upon, --- does anyone think we living in an "ideal" world?

Preserving Wealth During the Global Banking Crisis

Well John Lounsbury, you are indeed a fair and reasonable man and I admire and respect your astute opinions, and they are legion!
It often happens, however , that step one does NOT lead to step two.
Thus, this time , we must do BOTH , more or less, at the SAME TIME! (Is "swift" justice only another American myth?)
If we don't enact swift and effective action, and these criminals slip thru our fingers yet again, then their progeny shall return against us to create chaos and mayhem yet again in even greater scale and calamity in the future.
Why?, because their predecessors, yet again, got away with it , and that always emboldens the crooks that follow.
Memories are too short , and ongoing distractions too many to wait around for Step 2 to take it's course on a "business as usual basis".
Does History bear me out ?, or do you think I am a victim of an overactive imagination?